Tuesday, February 15, 2011

SKC Report Review 2: SKC lies on how BIG and IMPORTANT public employment is for Telangana!

Here is a study by Subhash C. Reddy, Ph.D. on what the SKC report said on public employment   and how the violation of the related safeguards affected Telangana.

The Srikrishna Committee exhibited extreme lack of comprehension of important Economic and Labor Concepts and Issues such as Local Economy, Labor Force, Employment and unemployment Rates, and Organized (Formal) and Un-Organized (Informal) Sectors of Economy. SKC also bared its ignorance of the significance of Organized Sector Employment with relation to the employment of people in professional, technical, college educated, and skilled trades. The Committee also has exhibited its total lack of appreciation of the size and the role of Unorganized Sector in employment. They have amply displayed their ignorance in the skills of statistical data calculations and interpretation.

But, the most important thing to realize is that as a consequence of these academic and scientific deficiencies the SKC has totally misrepresented the facts and figures and worse, didn’t even know that employment or unemployment rates are not calculated on the basis of Total Population of the Community but on the basis of Active Labor Force of the community. Also, the employment or unemployment of skilled and highly educated labor is separate and different from the unskilled labor force and, therefore, should not be mixed up.

SKC also didn’t seem to know who constitute the Labor Force and who doesn’t. By now national and international standards, Labor Force comprises working age population. For India that would be persons above 15 years of age and below 59 (Indian Retirement age is 58 years) years of age, excluding those who are in Armed Services, and persons incarcerated (jailed).

Please allow me to present to you all, some samples of nonsensical and absurd statements, assertions, and inferences SKC made in their Report:

1. “…Is public employment a big issue statistically ? The entire population of public employees in Andhra Pradesh in 2006 was about 1.7% of the total population in 2001 and about 3.6%of the working population in 2001.…The point is that, public employment constitutes a very small percentage of the working population of the state and an even smaller percentage of the total population.”

SKC further reported: “per the figures of Census 2001, the population of Andhra Pradesh was 762 lacs, out of which the working population was 348.65 lacs. The Employees Census, held in 2006, put the figure of total employees under the state government (or in public employment) at around 12.9 lacs.

Do the exalted members of SKC, who happen to be IAS, Vice-Chancellor, Chief
Economist, and a Professor of Delhi University, understand that Public
Employment includes not only state government employees but also employees
working for Public Sector Industries, Panchayats or Mandals, Municipalities, and
quasi-government organizations. There are almost 1200 Mandals (approx) and
more than 16 Municipal Corporations whose employees are not included in the
state government employee census. In fact, state government employees
constitute only half or less than half of ALL Public Employees. In other words,
we can double the number of the total state employees to get the full Public
Employment population. Then how could SKC equate state government
employees to total public employee number? Either SKC didn’t care for accurate
data or they had already made up their mind about their conclusions on the

What was the objective of calculating the proportion of public employees to the
total population of the state? Does it convey any inference or relationship in
economic terms? Is that how employment statistic calculated by Economists and
Social Scientists? Then SKC makes a most baffling conclusion: “The point is
that, public employment constitutes a very small percentage of the working
population of the state and an even smaller percentage of the total population.”
Perhaps you could make the same conclusion by comparing the number of
government doctors to the total population of the state. I am sure, the percentage
figure will even be more diminutive (tiny). But what am I conveying? That I can
calculate a most basic statistical measure – the percentage? I am impressed at the
mathematical prowess of SKC members but what then? And what exactly are
they asserting by asking “Is public employment a big issue statistically? ” What
do they mean by “big issue” and by “statistically”? Oh, I get it. If it is not a big
issue statistically then it is not an issue at all. But, what does “big” mean in
statistical terms? Or what number is BIG? Well, they could also ask the same
question about the number of farmers who committed in proportion to the total
population of the state. Even if 2 lac farmers committed suicide Is It a Big Issue
Statistically? After all, it calculates to 0.28% (2 lacs/722 lacs). If 1.37%, stupidly 
calculated on the basis of total population, is NOT Big the 10% is big? According to 
SKC, this 1.37% is equal to 12.9 Lacs. For the Public employment to reach 10% of 
the population then the number of total government employees will have to reach 94 
Lacs. Even then will SKC consider it as big statistically?

The largest employers in Hyderabad are the Andhra Pradesh Government and the
Government of India with 113,098 and 85,155 employees respectively. SKC 
reported 12.9 Lacs state government employees as the total public employment. 
But that is only half of public employment. So, the total public employment 
would be 25.8 Lacs (12.9 lac state govt employees plus 12.9 lac employees of 
Mandals, municipalities, public sector industries). SKC didn’t even mention this.

Let me shed some light on the subject of Economics, Demography, and Social Sciences of which SKC attempts, failingly, to make use of. In India and the state of AP or any other state, the total employment of the labor force (working population) is provided by two sectors of the Economy. One is Organized (Formal) Sector and the other is Un-Organized (Informal) sector. The Un-Organized sector is ten times larger than the Organized sector in terms of total number of people employed. Let me offer definitions or explanation for these two sectors.

Organized Sector: “The National Accounts Statistics (NAS) uses the
classification of `organised' and `unorganised' sectors in presenting national
income data and what is indicated as `unorganised' in NAS is not the same as
`uninc' or non-company forms of organisations."

Generally, all enterprises which are either registered or come under the purview
of any one of the acts like the Indian Factories Act 1948, Mines and Minerals
(Regulation and Development) Act, 1957, the Company Law, the Central/State
Sales Tax Acts, the Shops and Establishment Acts of the State governments, are
defined as part of the organised sector. Also included are all government
companies, departmental enterprises and public sector corporations. "Similarly,
forestry, irrigation works, plantations, recognised educational institutions, and
hospitals which are registered as non-profit making bodies are also classified as
organised sector.

Un-Organized Sector: “All unincorporated enterprises and household industries
which are not regulated by any acts of the above mentioned type and which do not
maintain any annual reports presenting the profit and the loss and balance sheets
are classified as unorganized sector." This includes agricultural farms, domestic
labor and such.

I shall show why and how these two sectors have an important bearing on this
subject of Public Employment for Telangana people. But, first consider the
statements and assertions of SKC in this context. I quote:
“During the last two decades (1990-2010), as the Indian economy has undergone
structural changes, a great many areas of employment opportunities in the
private sector have opened up, pushing public employment, both in numbers as
well as in importance into the background. In an era when the state is
withdrawing from many areas, accompanied by increasing privatization or publicprivate
partnerships, employment under the state can no longer be viewed as a
panacea for unemployment.”

Now, here are the real truths and facts and figures which will disprove SKC’s
above assertions and expose their ignorance of the subject matter and their
arrogance in making such categorical statements which are utterly false and

“The organized sector in India consists of 293.77 thousand industrial
establishments. Out of these, 172.34 thousand are public sector enterprises while
121.43 thousand are in private sector. Since 2004, an increase of 1.4% has been
recorded in the number of establishments in the organized sector. As on the 31st
March, 2005 the total employment in the organized sector was estimated to be
264.58 lakh while in 2004, it was 264.43 lakh…The public sector employs about
180.7 lakh persons while the private sector employs 84.52 lakh persons.”…. the
employment in public sector decreased by 1 percent while private sector increased
by 2.5 percent.” 

And the chart below shows that the quasi-government and local governing bodies
together employ slightly more employees than the state governments. Altogether,
the total public employment is twice as much as the employment provided by the
State government alone. State government employment decreased by only 1
percent in Andhra Pradesh. 

According to the results of the National Sample Survey (NSS) conducted in 1999-
2000, total work force as on 1.1.2000 was of the order of 406 million for all of
India. About 7 % of the total work force is employed in the formal or organized
sector (all public sector establishments and all non-agricultural establishments
in private sector with 10 or more workers) while remaining 93% work in the
informal or unorganized sector. As per that survey, there were 44.35 million
enterprises and 79.71 million workers employed thereof in the non-agricultural
informal sector of the economy. Among these 25.01 million enterprises employing
39.74 million workers were in rural areas whereas 19.34 million enterprises with
39.97 million workers in the urban area. Among the workers engaged in the
informal sector, 70.21 million are full time and 9.5 million part times. Percentage
of female workers to the total workers is 20.2 percent. These percentages could be
logically applied to Andhra Pradesh state employment scenario.
Source: http://www.industrialrelations.naukrihub.com/organised-andunorganised-

Let me summarize:

1. Organized Sector ONLY provides ALL the professional, technical,
administrative, office clerical and skilled jobs that require secondary
and tertiary (high school, college and professional education). These
are the jobs that pay highest wages.

2. Un-Organized Sector provides all the agricultural, non-agriculture, and
domestic labor jobs that don’t require even primary education (upto 8th
standard). These are the jobs that pay lowest wages.

3. Employees of the State government comprise only HALF of the total
Public Employment. And Public Employment is still THE MAJOR
EMPLOYMENT SOURCE providing TWICE as much employment as
the PRIVATE SECTOR. Public Sector provided 181 Lac jobs while
Private Sector provided only 85 Lac jobs (2005).

4. Therefore, Public Employment is VERY VERY BIG Statistically.
Public Employment is THE PANACEA for professionals, people with
secondary (high school diploma) and tertiary education (college).

5. SKC did not collect the required statistical data but made seriously
incorrect or false statements. It is Patently Untrue and Absurd what
SKC said: (IT IS A LIE! )

Thus, it is proven with supporting data, facts, and figures that all the assertions
made by SKC are false, untrue, and actually LIES. Yes, SKC LIED!
Not only Public Employment is the single largest source of employment but also
THE source of providing well paid, privilege laden, secure, authoritative, and key
positions of power to the people. Public Employment is IMPORTANT not only
because it provides huge number of well paid jobs but also because it is twice as
large as the Private Sector in terms of employment.

Key Role of Public Employees:
And Public Employment is even more Important to a community because:

1) Government employees play a major role in planning, formulating, and
implementing Public Policies, Educational, Economic and Developmental Issues,
and Facilitating Citizens interactions with government agencies. These public
employees include IAS cadre, IPS cadre, IFS cadre, high level administrators like
Secretaries to the government, District Collectors, Joint Collectors, Mandal level
executives, Magistrates, Tax Officers, etc.

2) When MOST government employees belong to only one region then it is obvious 
which region benefits and loses out. Just about everyone knows that the Cabinet 
Ministers are totally dependent on the civil servants to provide all the facts and 
figures and the Truths. That is, the ministers, greatly, are deaf, blind, and dumb 
without the input of their civil servants.

3) The civil servants (govt employees) are the Eyes, Ears, and Throat of the Ministers. This includes the Law and Order wing of the government which basically imposes the will of the government on the people instead of the will of the people on the government.

No wonder, people of one region (read Telangana) are always oppressed and shut out from participating the democratic processes of self governing.

Let me use an analogy here. Let us say there is a public function being organized
to dole out free lunch, free drinks, free clothes, and free shoes. A committee is
appointed by the organizers (govt). The members of the committee decide who is
informed about the free dole out function, who is invited and what is doled out and
how much and to whom. And all or most of these members belong to only ONE
locality, or ONE Community. Guess who will be the beneficiaries? Is it hard that
the Locality or the Community that benefits MOST is the one to which these
members belong?

In other words, the system is rigged to deny citizens of one region and dole out
most benefits to people of the other region. And that's what has happened and
that's what Telangana is Complaining! The way our 54 year old legitimate,
democratic, and just struggle has been totally sidelined and misrepresented
because of this lopsided control of the state's entire machinery in one region
(Andhra) is the Issue. Thus it obviously functions as an Exploiting Colonial
Power just as the British Colonial Power did.

Methodology I used:
I have obtained Labor Force Statistics from Nationmaster.com website which
supplied data for India and applied to A.P. state.
We have already learnt from authoritative sources of data that Ninety-three
percent of Indians are employed by the Un-Organized Sector of which nonagricultural
labor is 27%, and agricultural labor is 61%. Organized Sector
employs only 7% of the Labor Force. Let us use a round figure of 10% for
Organized Sector and 90% for Un-Organized Sector.
The data from authoritative sources: Source of Labor Statistics:

Source of Demographics Data:
http://en.wikipedia.org/wiki/Demographics_of_India (not the cooked up data
SKC presents) shows that only 9.5% of the Labor Force possesses Secondary
education (high school diploma only) and just 4% of the Labor Force possesses
Tertiary education (college education).
force with primary education > %of total 35 %
force with secondary education > %of total 9.5 %
force with tertiary education > %of total 4 %
Data on population demographics of India (closely related to AP) is as below:
0-14 years: 31.1% (male 190,075,426/female 172,799,553) (2009 est)
15-64 years: 63.6% (male 381,446,079/female 359,802,209) (2009 est)
65-over: 5.3% (male 29,364,920/female 32,591,030) (2009 est)

Also, the same source informs us that more than 50%of India’s population is
below the age of 25 and more than 65%hovers below the age of 35. (let us
take it as equal to 50% instead of "more" than 50%).

Just on this basis alone, 10% of 348 lacs Labor Force, reported by SKC, is ONLY
34.8 lacs. Therefore, the total Labor Force for Public Employment is 34.8 Lacs.
Public Employment in AP is 25.8 lacs (doube the 12.9 lac state government
employees). Then, Percent Public Employment in AP is number of public
employees / Labor Force for Public Employment = (25.8 x 100) / 34.8 = 74.1%.
The remaining portion of this Labor Force (34.8 – 25.8) of 9 Lacs would be
employed by the Private Sector. These numbers closely match the proportions 
of public and private sector employment as reported by earlier for India.

Thus, Public Employment is 74.1% based on the Labor Force for Public
Employment and NOT 1.7 or 3.6% as SKC presented dishonestly. We,
Telanganites, are ONLY complaining about Organized Sector’s Jobs and majorly
about Public Sector’s jobs. Thus, SKC deliberately misdirected the issue and
misrepresented the facts.

Let me present to you the same calculations based on SKC’s data of 348 lac Total
Labor Force that is employed by both Organized and Un-Organized Sectors.
The data from authoritative sources already cited earlier (not the cooked up data
SKC presents) shows that only 9.5% of the Labor Force possesses Secondary
education (high school diploma only) and just 4% of the Labor Force possesses
Tertiary education (college education). Almost all government jobs require at
least Secondary education and a portion of those jobs require College education.
Therefore, we should only consider that part of Labor Force which possesses the
required qualifications of Secondary and tertiary education. And that would be
9.5% +4% = 13.5% of the Labor Force that should be considered in the analysis.
Then, 13.5% of 348 lacs = 47 lacs is the total Labor Force eligible for government

So, Total Public Employment (12.9 lacs state govt employees plus 12.9 lac
employees of panchayat, municipal and public sector corporations) = 25.8 Lacs.
Even by this calculation the total population of Public Employees of 25.8 Lacs is
55% of the Labor Force (47 Lacs). SKC cooked up the numbers 1.7% or 3.6%
like a magician pulls out rabbits from his hat – from nowhere just imaginary!
If Private Sector employs half of all public employees (12.9 lacs) then the total
number of employees employed by the Organized Sector will be 25.8 + 12.9 =
38.7 Lacs.

Therefore, government employment (jobs) becomes a substantial factor for the
Labor Force of Andhra Pradesh and of Telangana. Thus, 8.3 Lacs of the Labor
Force with Secondary and tertiary Education is unemployed which is closer to the
figures reported for India (actually lower). Let us look at how equitable hiring for 
Public Employment in Telangana would have affected the Employment (or) 
Unemployment situation as applied to the Telangana people who have Secondary 
and Tertiary Education. We already have the data we used in previous calculations.

Of the total of 25.8 Lac public sector jobs, Telangana should get 40% (based on
population) and that would be 25.8 x 40/100 = 10.3 Lac public sector jobs. Half
of this, 5.2 Lacs, would be Private Sector Jobs making a total of 15.8 Lac jobs in
the Organized Sector.

This would mean Telangana will be fully employed and then some more if done
equitably and fairly. But it did not happen. That is why Telangana is fighting for
separate State so its people can receive their due share of employment.

My previous SKC Report Reviews:
SKC Report Review 1: Recommendations at Variation with Analysis

1 comment:

TelanganaSadinchdamu said...
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