Employment Generation Program of Andhra Pradesh

Its been around four months approximately since we have started work as PMRDF's. Have been thinking of blogging for the past few months, but never got to doing it. Better late than never, here comes my first post.

In this blog entry I am planning to talk about the employment generation program of the state of Andhra Pradesh. Just to give a bit of background, We PMRDF's in Andhra pradesh have a mandate of evaluating one government scheme every month. so last month we fellows chose " Rajiv Yuva Kiranalu" which is the employment generation program of AP. This scheme was conceived to build job specific skills among unemployed youth and place them in appropriate jobs. It has set a target of providing employment for 15 lakh youth. This is to be acheived on a mission mode. 

The scheme is implemented in a  public private partnerhip model. Government signs MOU with training partners who are responsible for the training and placement of the candidates and are in turn paid by the govt. for these services. But the innovation here is in the design of the payment system. The training partners are paid in stages. First 25 % when the batch starts, second 40 % when placements are done, the next 25 % if the candidate stays on in the job for 3 months and the last 10 % if the candidate stays on in the job for an year. So there is an incentive for the training partner not only to provide a job but also provide such a job which can retain the candidates in the job. 

Now as a part of my study I looked at candidates who got trained and placed majorly in the tribal areas of ITDA Rampachodavaram( which has around 7 blocks) which is where I am working. The official stats from the website state that from ITDA Rampachodavaram around 852 were trained of which 682 candidates were placed. Allmost all of these jobs are in urban areas. Hyderabad alone accounts for around 50 % percent of these 682 jobs. So, I took a certain sample( around 50 candidates) of candidates and tried to find out the present staus of their job. 

When I met with these candidates I realized that the drop out rate of these candidates was around 80 %. So, basically candidates even after getting a job offer were not continuing in their jobs.  Next step was to find out why they were dropping out. Some of the main reasons for the candidates dropping out were less salary, food & accomodation issues in the urban areas, not wanting to stay away from home, further studies, too much work,marriage etc... Of the above reasons low salary was the major of all. offcial stats show that around 75 % of the candidates earn less than Rs.6000. In some cases this salary has a food and accomodation component which further reduces the in hand salary that the candidate receives. Also if you look at the payments made to the training partners, many of the training partners do not even claim the last 35 % ( it was 25 % last year) which is paid if they retain the candidates. That means there are running their operations with 65 or 75 % of money they are supposed to receive. So they will have to reduce their costs to break even which will impact the quality of training. 

Why are so many candidates dropping out? First of all majority of people always prefer to work some where near their home. They will only leave to work in distant areas away from their homes only if they think they are able to earn considerably more than they can near their home town's. In the present case of the above scheme most of the jobs are low paying jobs and this coupled with the high costs in urban areas where these jobs are located does not leave the candidates with any savings. Even when they take up the job, they have to compromise a lot on their food and accomodation to be able to save some money. Some others come back to continue their futher education and in case of girls, marriage is another big reason for drop out.

So what should be done? of course the ideal scenario is when we can creare rural employment so that the candidates can stay near their homes and work. Also since rural areas have low costs of living, even low salaries might result in savings. But the problem here is our rural economies are not so vibrant to create many job opportunities unlike urban economies. So, urban employment still holds the key to create employment in huge numbers. For a job in urban environment to be sustainable the salaries have to increase. One of the recommendations we made was to change the payment system to incentivize the training partners to get candidates better paying jobs. So in the present 4 step payment process, 40 % is paid in the second stage when placements are done. We can increase this amount to say 60 % if the salary is above say Rs.7500 and say 70 % if the salary is above say Rs.9000 etc... So we are saying there will be variable pay in the second stage based on how high the salary is. This should act as an incentive for the training partner to provide better paying jobs. Also at the same time continuing efforts should be made to promote rural employment. We should also try to look at those urban jobs that can be shifted to rural areas like rural BPO's, rural tourism etc...

My idea of writing this blog is to share my work with other fellows working in other districts and at the same with everybody interested in development. I also think this way it will act as a platform for discussions. So please go ahead and post your comments and criticism's on the above.

PS: Not proof read, so pardon me for any mistakes.