India - Third five year plan (Vol. 2 of 9) : The Development of India's Human Resources

RESTRICTED Annex I to Report No. AS-80a This report was prepared for use within the Bank. It may not be published nor may it be quoted as representing the Bank's views. The Bank accepts no responsibility for the accuracy or completeness of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INDIA'S THIRD FIVE-YEAR PLAN REPORT OF BANK MISSION TO INDIA Annex I THE DEVELOPMENT OF INDIA'S HUMAN RESOURCES August 10, 1960 Department of Operations South Asia and Middle East CURRENCY EQUIVALENTS 1 Indian Rupee = U. S. $0. 21 1 U.S. Dollar = Rs. 4. 762 Rs. 1 billion = $210 million 100 Naye Paise = One Rupee ANNEX I. THE DEVELOPIENT OF INDIA'S HUD¶AN RESOURCES TABLE OF CONTENTS Page Numbers General 1 Population 1 General Education 2 Higher Education 3 Language 4 Technical Education 5 Training Facilities 7 Health 8 Mobilization of Unemployed and Underemployed labor 9 LIST OF TABLES 1. Enrollment of Pupils 3 2. Demand and Supply of Technicians 6 3. Number of Institutions, Admissions and Output in Engineering and Technology 6 - 1 - ANNEX I. THE DEVELDZNT OF INdIAtS HUM1-1 RESOJ1CES General 1. As has frequently been pointed out, India, while poor in some respects, is rich in human resources. These resources, like any others, need to be developed if they are to contribute effectively to economic growth. The general and continuing objective must be an increase, on a very broad front, in the productivity of human endeavor. "Effective and speedy means", says the Third rlan outline, "should be devised to raise the level of pro- ductivity for the natiDn as a whole," This objective may sometimes be ob- scured by short-run problems and by difficulties of adjustment. It may also be lost from sight if too much attention is paid to the achievement of non- economic objectives. 2. There are a number of kinds of governmental activities, supplemented in some cases by substantial private prograr, not ordinarily considered part of an economic plan or of economic policy, which the mission, nevertheless, feels deserve mention in this report because of their bearing on the quality of human resources likely to be available to India in the future. The mission had neither the tite nor the competence to make a general survey of all activities of government in this sector and certainly not of all aspects of Indian society. It did have occasion, however, to discuss certain problems with res'onsible ministers and officials. 1he mission was impressed, on the one hand, by certain signs of significant progress and, on the other, by the limitations on India's capacity to carry out her economic plans arising from several wealnesses in the mobilization and use of manpouer. Sone of these matters are discussed in thiE Annex. Population 3. We have referred in the main rcport to the fact that both official and unofficaal estimates nf Indian population gro.ith have been revised upward in the course of the Second Five Year Plan. The present estimates are as follows: 1951 1956 1961 1966 1971 1976 (millions) 362 391 431 480 528 568 It is perhaps 7,rth noting that the difference between the old and the new estimates, as of 1966, involves a population approximately the size of that of the whole of Italy. -2 -- 4. Such a population growth would leave the age distribution of the Indian population, at the end of the ThirdPlan, considerably altered. There inuld be a decline in the proportion of the population in the age groups normally employed in agriculture and industry and, of course, an increase in the proportion of children and older people. N4evertheless, the labor force would be expected to increase in absolute terms even by 1965, and. by 1976 it might increase by as much as 60 million persons, of whom the Indian Government estimates mre than two-thirds Tould have to be absorbed outside of agriculture. As a matter of fact, the rate of growth of urban population is now believed to be more than three times that of the non-urban population, and more than twice the rate of 2.1 per cent per annum estimated for total population. From the point of view of investment, employment, social services, and other economic magnitudes, this is perhaps the most striking feature of the population situation. Not only is Indiats population growing by numbers so large that their implications are difficult to grasp, it is growing in a manner and in places that will present vast and difficult new problems to all levels of government. It is not possible to imagine hou such population develop- ments could be coped with by any conceivable multiplication of the village economy based on traditional crafts, even if associated with sizeable improvements in the productivity of agriculture. 5. These considerations lend support to the Indian Government's view that a radical transformation of the econoidic basis of Indian society, along the general lines contemplated by the 6econd and.ThirdFive Year Plans, is more than just a desirable development pattern. It is certainly possible, and the mission has somewhat reluctantly cone to the conclusion that it is probable, that the kind, of development envisaged in the 1lans is the only sensible way to approach the problem of dealing with the population growth faced. by India. General Education 6. From Rs. 1.5 billion during the First Plan the total outlay on education will have risen to approximately Rs. 2.2 billion during the Second Plan. Provisional figures for the Third Plan period are given as Rs. 5 billion of which Rs. 3.7 billion will be for general education and. Rs. 1.2 billion for technical education. The mission has no basis for expressing an opinion as to the adequacy of these financial pro- visions. The Ministry of Education, however, seems to believe that toward.the end of the Third.Plan period, it and the State administra- tions could usefully employ iire than the Plan figures would allow. If this should prove to be the case the mission believes that a serious effort should. be made to provide additional resources. 7. One thing that clearly becomes recre important to India as her economy increases in complexity is the spread of general education. Apart from other obvious reasons for this, it is now generally agreed by population experts that if concerted measures to reduce birth rates can ever have any significant effect on the rate of growth of popula- tion, they can only do so to the extent that the cormmnity becomes literate. The Indian Government is fully aware of the imortance of general education. The mission considers that the results obtained in spreading irimary education throughout the country have already been impressive. The essential facts are set forth in table 1. Table 1. Enrollment of Pupils Year Eurollment (in hundreds of thousands) Percentages Enrolled 6 -1 11 - 14 14 - 17 6-11 11-14 14-17 age- group age-group age-group age- group age-group M= 1950/51 192 31 12 43.1 12.9 5.4 1955/56 252 43 20 51.0 16.3 8.1 1960/61 (estimated) 330 51 30 60.0 22.6 12.0 1965/66 (targets) 504 100 44 80.0 30.0 15.0 8. In the year 1950/51, 43 per cent of children in the age group from 6 to 11 years were enrolled in classes 1 to 5. In the current year, 1960/61, the corresponding porcentage is 60. It is hoped to raise this figure above 80 per cent by 1965. Bearing in mind the population increase, now about 2 per cent per year, this is a considerable achievement. r-s can be seen in the table, correspondin- efforts are being made in the higher age groups. The percentage of children in the 11 to 14 and the 14 to 17 age ;roups now in school is markedly lower than average in Hadhya cradesh, Rajasthan, Uttar iradesh, Jamma and Kashmir, Bihar and Orissa. This is mainly because of the great difference in the proportion of girls attend- ing school in these states. The practice of educating girls will spread only slowly, and even by the end of the Third Plan it is expected that the 80 per cent of the 6 to 11 age group expected to be in school will consist of nearly 100 per cent of the boys in that group but only about u0 per cent of the girls. The size of the task of administration, teaching, construction, and not least, discipline, facing the Indian school system is suggested by the fact that over 50 million pupils are expected to be attending primary school in 1965. Higher Education 9. There is now a general awareness in India that the pattern of higher education is poorly adapted to the requirements of the country. Too many clerks and lawyers and too few engineers and scientists are turned out. There is underway a serious effort to correct this imbalance and there is a clear recognition in most educated circles that mere growth in the number of university -raduates is not evidence of the kind of progress India needs. On the other hand, the pressure on the individual, and on the family, to obtain a degree of any kind remains tremendous because the degree continues to be regarded widely in Indian society as a passport to socially acceptable occupations. The well-knoin existence of -4- masses of educated uncmployed has not seriously altered this situation. The educated unemoloyed man always has a chance; the uneducated unemployed has none - so the reasoning goes. There is some evidence, however, that the standards of what are socially acceptable occupations are slowly changing in some of the more rapidly industrializing sections of the country. 10. The fact is that most Indian aniversities are badly overcrowded and need considerable investment in housing, teaching facilities and staff even to keep up with the current rate of growth of the student bodies. By the end of the Second Plan there will be 41 universities and about 1,050 colleges. There are nearly 900,000 students at the university level in 1960/61, an increase of nearly 50 per cent on the 1955/56 figure. The number of science students will, however, have increased only from 209,000 to 270,000 during this period. The financial provision for university education during the Second Plan was Rs. 0.44 billion and during the Third Plan it is expected that Rs. 0.75 billion will be provided. 11. Various Troposals have been made, and some are being implemented, designed to improve the quality of university education. This is a matter that is actively debated publicly and privately throughout India. The University Grants Commission is playing an increasingly important role as the initiator and the coordinator of educational programs, The chairman of that Commission was also the chairman of a special comrfttee appointed by the Minister of Education to examine the proposal to intro- duce some months of cocmpulsory national service for young men and young women, prior to their matriculation. The committee endorsed this idea and has suggested proposals and procedures for its implementation. The service would consist essentially of work, under direction, in some aspect of the comunitv development program, with stress on manual labor and education in the purposes and processes of the nation's development efforts. The idea would be to ,nke a year's national service a prerequisite for entry into a university in the hope that some knowledge of manual labor would give the educated youth more respect for, and understanding of, the problems and aspirations of the great mass of the laboring population. This scheme would also act as a kind of screening process to reduce the number of unsuitable students entering the universities. Language 12. The fact that language problems comnlicate the Indian educational task at all levels has been alluded to in the main report. The mission is aware that this problem is not likely to be dealt with on the basis of economic considerations. We feel bound to point out, however, that it does have very substantial economic consequences. 13. The country is entering a period in which ease of communication at all levels and in all fields of activity will be very much more im- portant than in the past. As the economy becomes more complex, a very much larger proportion of the population needs a means of accurate and rapid commanication. The kind of lingua franca that may enable people of different tonmes to conduct simple commercial operations or cooperate in a military endeavor will not suffice at all for the transmission of techni- cal ideas and comPlicated instructions in a modern industrial community. The dilemma of the pilot of an aircraft circling over a base manned by technicians with whom he cannot communicate may be fanciful, but situations not entirely dissimilar to this could well arise in Indian plants, Government departments, and business organizations of the future. They would arise more frequently today but for the fact that there is a common language among a small proportion of the population engaged in government, business administration and the professions. This language is English. 14. Now each state is introducing its own language as a medium of instruction in the universities and in some cases as the language of govern- ment. It is only reasonable to expect that every state will wish to make its om langiage an official language at an early date. In addition, of course, the national policy is that English should ultimately be replaced by Hindi as the official language of the Indian Union. Under these cir- cumstances it does not seem likely that English can remain the language of effective communication for the organized or "modern" section of Indian society unless fairly strenuous measures are taken to ensure that it is widely and effectively taught. But it is by no means clear that any of the Indian languages provide a practicable alternative, either in terms of general acceptance or in terms of providing the vocabulary required to conduct daily affairs in industry and public administration. The mission felt that there was a tendency in the higher ranks of public administration to assume that English would be available indefinitely as an efficient means of communication but that the foundation for this assumption was not being laid. The mission was told in several localities that the standards of teaching and performance in English were deteriorating. Technical Education 15. Great stress is laid in the Third Plan on the need for expanded technical education. The Planning Commission has made a number of detail- ed studies of the probable requirerents of the country for different categories of engineers, scientists and technicians of various kinds, assuming industrial and agricultural development takes place more or less as planned. These studies have yielded "demand" figures against which the targets for the out-turn of graduates and diploma holders have been set. Summary results of these comparisons are given in Table 2 - 6 - Table 2. Demand and Supply of Technicians Second Plan Third Plan Fourth Plan Category 1956-61 1961-66 1966-71 Demand Supply Demand Supply Demand Supply 1. Graduates 28,000 26,000 45,000 51,000 75,000 75,000 2. Diploma Holders 54,000 32,000 80,000 76,000 120,000 117,500 The estimates of "supply" have been worked out with reference to the training facilities already available. There is to be increasing emphasis on mechanical, electrical and chemical engineering, and on specialist training in the fields of mining and metallurgy. A general picture of the growth of technical education in India is given in Table 3. Table 3. Number of Institutions, Annual Admissions and Output of Degree Holders and Diploma Holders in Engineering and Technology 1947 1955 1956 1957 1958 1959 Degree Courses (a) Number of Institutions 38 65 70 74 83 87 (b) Annual Admissions 2,940 5,888 6,612 8,760 11,086 11,277 (c) Output 1,270 4,017 4,337 4,223 4,571 4,478 Diploma Courses (a) Number of Institutions 53 114 109 129 157 166 (b) Annual Admissions 3,670 10,484 10,318 15,000 19,932 20,667 (c) output 1,440 4,499 4,103 5,084 6,021 7,241 16. The expenditures of the central government on technical education have risen from Rs. 60 million in 1956/57 to Rs. 109 million in 1960/61 and it is estimated that the state governments have spent an additional Rs. 300 million on technical education during the Second Plan. As indicated above, -7- the outlay for technical education for the Third Plan is tentatively set at Rs. 1.2 billion. It is proposed to raise the annual intake of degree candidates from 13,100 in 1961 to 19,000 in 1966. At the same time, the annual intake of candidates for diplomas, who take a shorter and less difficult course, should rise from about 24,000 at the end of the Second Plan to about 39,000 at the end of the Third Plan. It is calculated that these rates of admissions will lead to an out-turn of appropriately qualified persons sufficient, taking one year with another, to meet the demand as it develops, although there will be surpluses and shortages of particular types of engineers and technicians at various times, even if both the industrial and educational plans turn out to be substantially correct. One problem that must be energetically tackled, however, is the high rate of "wastage" in Indian educational institutions, particularly in technical institutions - the large numbers who start and do not finish the course. It should also be borne in mind in considering these figures that the supply to industry of young engineers in adequate numbers does not meet the problem of finding experienced technical personnel in the next few years to operate the new heavy industries. 17. The only part of the program for higher technical education that seems to the mission to be likely to prove seriously inadequate is the provision made for graduate agricultural specialists. Reliance is being placed on the 39 agricultural training institutions expected to be operating by 1961 to cope with the requirements for agricultural specialists during the Third Plan. These institutions will have an annual out-turn of only a little over 2,200 graduates. Neither the number of the institutions nor the number of the graduates seems adequate to the requirements of a country as large as India which is counting so heavily on agricultural development as a basis for its economic growth. The mission was disturbed also to learn at some of the agricultural institutes which it visited that very few graduates ever put their knowledge to use on the land. This is true despite the fact that it has repeatedly been demonstrated that with small capital (which most young men who can afford to go to agricultural colleges can obtain from family sources) a farmer, using up-to-date methods, can make substantial profits on small land holdings near the growing urban markets of India. The returns that have been demonstrated are far in excess of what a young man could expect to earn in the civil service or as an employee in commerce. Training Facilities 18. In addition to the program for education of the higher ranks of technicians and engineers there is a rapid growth of training facilities for all kinds of craftsmen and medium and low grade technicians. The number of training centers in this general group has nearly tripled since 1956 and it is expected to go on increasing rapidly during the Third Plan. The mission was favorably impressed in a number of places with the enthusiasm with which this work is being advanced, with the quality of the trainees, and with the favorable comments of plant managers and senior engineers on the quality of the young men being turned out by many of these training centers. The total numbers of people covered are as yet small considering the size of the Indian population but there is wide recognition of the need to move rapidly ahead in increasing training facilities of all kinds, and in both government and private industry, there seems to be the necessary support at the top. 19. There is a good deal less recognition so far of the need for rapid increase in training facilities in the general field of business and public administration. There are only seven institutions at present giving courses in business administration and management. Seniority in the public service and seniority and family connections in private industry are still the dominant considerations in promotion of admini- strative and management personnel. While this attitude prevails it is difficult to persuade either companies or individuals of the importance of investment in training for administrative work. Some impact has, however, been made by several studies by foreign experts of Indian labor relations and public administration, and it is probable that more attention will be paid to this kind of training during the next few years. 20. The mission feels that while these developments are in the right direction, more attention might usefully be paid to simpler but more extensive kinds of training that would have a quick return in the form of increases in efficiency of management of small and medium-sized enterprises. Programs of adult education are already being carried out in some Indian cities with good results. An example of the kind of training that we have in mind would be training in elementary accounting for small entrepreneurs and craftsmen. Health 21. It is noted in the main . report that the total amount that India plans to invest in social services is only Rs. 1.30 billion per year, which is less than 1 per cent of national output and which is considerably below the allocations made for comparable investrents in most other countries. There is, however, a substantial increase under the Third Plan in the amount to be spent on health programs. 22. Six general fields have been chosen for particular emphasis during the Third Plan. They are: (a) the improvement of environmental hygiene, especially rural and urban water supply, (b) control of communicable diseases, (c) the provision of adequate institutional facilities to serve as a base for organizing health services, (d) provision of facilities for the training of medical and health personnel, (e) family planning, and (f) public health services, including maternal and child welfare, health education and nutrition. - 9 - 23. A provisional allocation of Rs. 2.93 billion has been made in the Plan for outlays on these six health programs, but of course in this field, more than in most others, the exact amounts involved will have to be determined after consultation with the state authorities. The mission has no particular comment on this program, except that we are inclined to believe that before the end of the Third Plan period the problems of the larger urban areas, notably Calcutta, are likely to demand more attention and more financial outlay than contemplated. The special problem of Calcutta has been referred to in the main report. It is perhaps also worth mentioning that even if the entire health program should be carried out, Indian standards of sanitation, availability of medical care, housing, and other health and welfare services would still be pitifully low. By the end of the Third Plan there would still be one doctor for every 6,000 people, even if the doctors were spread evenly throughout the country which of course they are not, being concentrated in the urban areas. 24. The health of the people is, of course, directly related to their capacity to develop into efficient workers and employees. It is perhaps not generally understood that there is a good deal more content to this statement in India--or indeed in most tropical agrarian countries of Asia--than would meet the eye of anyone unfamilar with industrial conditions on the spot. A great deal of modern machinery is built to be operated by men or women of North America, Europe or Northern Asia. The peoples of India, particularly in the East and South, are much smaller and lighter beings. The management of one modern factory in Madras found that the average weight of its Indian employees was about 94 pounds compared to an average weight of about 135 pounds for the employees of a very similar plant belonging to the same company in England. Despite automation and all that it implies, there are still many operations throughout industry, transport and the services where the smaller size and weight impose a real handicap, either necessitating the utilization of two or three workers instead of the one that would be sufficient in other countries, or resulting in a loss of efficiency where, as is often the case, only one man or woman can do the operation. Improvement in the general health and strength of the industrial worker is, therefore, even more directly related to the growth of productivity throughout industry than would be implied by the usual generalizations on this topic. Experience seems to indicate that when the Indian worker is properly fed and healthy such disadvantages as rerain on this score can be met to a considerable extent by redesigning or modifying machinery to adapt it better to the size and weight of the operators. lvbbilization of Unemployed and Underemployed Labor 25. Foreign critics of Indian development plans have almost invariably a great deal to say about the desirability of mobilizing underemployed or unemployed labor, particularly in the villages, for the purpose of improving amenities, constructing public works and engaging in other tasks that seem to require little finance and practically - 10 - no foreign exchange. Indian official and unofficial visitors to China have lately been returning with interesting and persuasive reports about the success the Chinese have had in dealing on a massive scale with similar problems in that country. These reports receive publicity in India and often give rise to more severe domestic criticisms of Indian planning than any foreigner would be likely to voice. Indeed the problem involved in all this discussion is obvious; but it is not simple. 26. The Planning Commission does not need to be persuaded of the importance of making more effective use of rural manpower in India. The Outline of the Third Plan calls for a five-pronged attack along the following lines: (a) Works projects to be included in State and local plans that involve the use of unskilled and semi-skilled labor. (b) Works undertaken by the community or by beneficiaries in accordance with established obligations. (c) Purely local works using contributed labor with some assistance from government. (d) Schemes to build up remunerative assets for villages, such as tanks, fuel supplies, or soil conservation. (e) "Supplementary works programs" for areas where there is a high incidence of unemployment, to be organized and financed mainly by the States. 27. Behind each of these headings lies a considerable amount of analysis and experimentation with different approaches in different parts of the country. In fact, progress along all these lines is visible in varying degrees in many parts of India today. With the exception of item (a), which is really not a separate feature of the Plan, and item (e), however, these approaches share one drawback so serious as to lead the mission to fear that they can make only very slow progress toward a solution to the problem. This is that they each involve a substantial amount of organizing talent and determination to follow through at the village level. These qualities are already in desperately short supply. The drive to produce more food and the community development program, to mention only two broad sectors of activity, depend heavily on the same sources for the same qualities--in concrete terms, on the same people for leadership in the same villages. In the absence of some kind of sustained nationwide enthusiasm for rapid and substantial transformation of the traditional patterns of village life, which does not appear to be in the offing, we can see only slow progress toward really massive employment of underemployed and unemployed rural labor through these means. 28. The fifth item in the outline of the program seems to repre- sent a tentative move toward quite a different approach and one which we believe to be more promising under Indian conditions. This is suggested rather than elaborated in the Plan Outline. It would economize organizational ability by placing far more responsibility in the hands of the professional administrators of the States and, by implication, also the central government. It would rely not on voluntary labor or willingness to carry out legal or customary obligations (the very definition of which is hideously involved in most Indian villages) but on pecuniary incentives. People would be hired at "village rates," say one rupee per day, or slightly less, and the work would be directed towards the kinds of public works and amenities that every Indian village so badly needs. Instead of trying to solve rural underemployment and unemployment by methods appropriate to different political systems or different social cultural and, indeed, physical climates, the incentive that all Indian experience suggests would work in a flash--the offer of a job with pay-would be employed. 29. We have already pointed out in the m.iain report that this approach also has financial and monetary implications. To some extent--the exact extent cannot be determined in advance-the people receiving these incomes would put forth an entirely new claim on the annual output of goods and services of the country which would precede - or exceed - the additional output likely to result from their work. To the extent that this occured it should be recognized by appropriate fiscal measures designed to curtail consumntion elsewhere to make the goods available. The financial effect should not be exaggerated. Employment of two million people at a rupee per day for two hundred days per year, which would represent a good beginning in the light of the administrative and technical problems involved, would mean a maximum of only Rs. 200 million in new incomes. And some, at least, of whatever these individuals formerly consumed as indigent or underemployed members of families would become available for meeting the new monetary demand, or for consumption elsewhere in the system. There is no reason why the amount of equipment or "capital" required for this method of attacking the problem should be any greater than under any of the other methods. If the fiscal implica- tions are squarely faced,and the monetary effects closely watched,the mission believes this approach to the problem of under-utilized manpower alongside India's tremendous needs for amenities and public capital of all kinds offors the opportunity for a substantial step forward.