Employment exchanges spend Rs 20 crore to fill 902 vacancies

Indian Expres, May 3, 2006

A recent report on employment exchanges in Delhi shows that in the

last five years only 902 candidates out of the 5 lakh who registered

were given jobs through the exchanges. The report, on the State of

Governance in Delhi by the Centre for Civil Society, reveals that

these 902 placements were made at a cost of Rs 20 crore. In other

words, each placement cost the government a whopping Rs 2.3 lakh.

These were made by the 20 employment exchanges in Delhi where

approximately 250 government staff work. In 2000 they made 123

placements, in 2001 only 48 placements were made, in 2002 the number

rose to 138. After a spike in 2003 to 426, placements fell to 167 in

2004. On average, for every staff member barely one placement was made

every year.

However, it is not the staff at the employment exchanges who are to

blame. In an era where both the private sector and government

enterprises manage their own recruitment work, there is little that

comes the way of employment exchanges. The exchanges are not meant to

cater to the private sector. Initially their main activity was to make

placements with public sector undertakings. Today the Staff Selection

Commission, the Railways Recruitment Board, the Banking Service

Commission and other recruiting agencies do the job for PSUs. It is

not surprising that only stray cases of lower level jobs come the way

of employment exchanges.

A lot of time and effort is spent registering with these

exchanges. Over the last five years, from 2000 to 2004, when these 902

placements were made, the number of people who registered with these

20 exchanges was an amazing 5,39,734. To register with an employment

exchange in Delhi it is required that one has been a resident of Delhi

for at least a period of three years. Proof of residence in the form

of ration cards issued at least a year before, or inclusion of name in

the electoral list has to be provided. In addition, a certificate of

educational qualifications from an institution in Delhi has to be


This problem is not restricted to Delhi. According to the Annual

Report of the Ministry of Labour, 2005-06, the Directorate of

Employment runs 947 employment exchanges in the country with a total

staff strength of 2527. The data on placements made by all exchanges

is not easily available, but what is available, is similar to what is

reported for Delhi. For example, statistics from the Vishakhapatnam

District Employment Exchange show that in 2001 while the live

registrations of the candidates for technical and unskilled jobs was

82,871, the number of vacancies was 246 and placements were only

67. In the clerical category, while the live register showed 1,51,933

candidates, the number of vacancies notified during 2001 were 112 and

placements were 50.

While the government is talking about redefining the role of the

employment exchange to find more work for the staff and

computerisation for better information flow and modern methods, there

is actually a need to question the very need for the government running

employment exchanges when both the private sector and various

recruitment agencies of the public sector appear to be doing a much

better job. The impact of employment exchanges does not justify the

expenditure on them. It is a blessing that the money budgeted for the

Directorate of Employment does not get spent. In the Ninth Five Year

Plan the Delhi government was able to spend only Rs 2 crore out of the

Rs 3.5 crore available.

Looking ahead, at the very least, the Delhi Government can cancel the

construction of a new Employment Exchange building at Daryaganj

expected to cost Rs 265 lakh. It can also stop going ahead on spending

Rs 250 lakh to build a computerised system to help registration. The

first best policy would be to shut down all employment exchanges. If

Delhi was to spend an additional Rs 4 crore on building infrastructure

every year, it would be able to create more than the 200 jobs a year

that the spending on employment exchanges does.

The lesson to be learnt from the Delhi story is that it is time to

wind up the Directorate of Employment. The Directorate of Employment

probably had a legitimate role when it was set up at the end of the

Second World War, in July 1945, with the objective of resettling

soldiers returning from war. But today other than providing employment

for its own staff, its impact is negligible. The Rs 3666 crore

allocated to the Directorate of Employment in the Tenth Plan was

serious wasteful expenditure. Instead of restructuring and reloacting

employment exchanges, the Eleventh Plan should aim at shutting them

down and relocating the 2527 government staff working in them.


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