The Hindu : Tamil Nadu News : Improve employability of labour force, says Rangarajan

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Saturday, Jul 01, 2006

Tamil Nadu

Tamil Nadu

Improve employability of labour force, says Rangarajan

Special Correspondent

"Augmenting skill endowment is key to improving its productivity"

A LIGHTER MOMENT: C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, having a word with K.S. Narayanan, Vice-Chairman, National Centre for Industrial Harmony, at the G. Ramanujam Memorial Lecture in Chennai on Friday. — Photo: M. Vedhan

CHENNAI: Industry associations and governments at various levels should attend to the "all-important task" of expanding and improving skill endowment of the country's labour force, C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, said here on Friday.

"We need to improve the `employability' of our labour force by matching the supply with the demand for skills," Dr. Rangarajan said, delivering a lecture in memory of the trade union leader G. Ramanujam at a function organised here by the National Centre for Industrial Harmony (NCIH).

Pointing out that augmenting the skill endowment of the labour force was fundamental to improving its productivity, he said: "as the economy grows and diversifies, we will need people with varied skills. In fact, we need more technicians than engineers, more para-medical staff than doctors. Our educational system is yet to come to grips with these problems. Even at school level, vocational training has lost much of its focus. Even in the burgeoning IT [information technology] industry, which is the flagship of our emerging knowledge economy, some analysts feel that we may run into a supply constraint with respect to higher quality professionals."

Dr. Rangarajan, who gave a talk on employment and growth, said accelerating growth rate, providing special emphasis on relatively more labour-intensive sectors and inducing a faster growth of such sectors, skill development of the labour force, and flexibility in labour laws formed part of employment strategy.

He said "flexibility does not mean a policy of hire and fire at will. Business units have to function under legitimate restrictions. However, the most important characteristic of flexibility is the ability to fix the wage rate depending upon the supply and demand situation in the labour market."

He called for the transfer of labour, to the extent possible, from the unorganised sector to the organised. "This would give the workers a better deal in terms of wages. This is possible only if the rigidities in the labour market are relaxed and wage determination begins to reflect the resource endowment in our country."

The pursuit of sector-specific policies, aimed at the growth of labour-intensive sectors, should be managed in such a way that there was no compromise with efficiency, Dr. Rangarajan added.

G. Kalan, labour leader, received from the economist the first copy of a publication containing the text of four lectures.

K. S. Narayanan, vice-chairman of the NCIH, said Ramanujam belonged to the vanishing breed of trade union leaders rooted in the spirit of independence and passion of freedom and conviction.

He determined to evolve a progressive and healthy code for the future development of industrial relations in the country.

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