June 29: The government is preparing to allocate billions of rupees to generate thousands of employment in the fiscal year 2021/22.

At a time when the people’s livelihood has been severely affected by Covid-19 pandemic and people are having a difficult time to meet their daily needs, the government has prepared an action plan to allocate funds of billion rupees to the controversial Prime Minister Employment Program, Youth and Small Enterprise Self-Employment Fund and PM Agriculture Modernization Project.

The Ministry of Labour, Employment and Social Security (MoLESS) informed that an action plan has already been prepared to implement these programs from July 16. The government is spending Rs 12 billion for the PM Employment Fund with an aim to generate 200,000 employments in the upcoming fiscal year. However, the previous experience shows ineffectiveness of the program which has drawn widespread criticism. The budget has to be spent in the construction of roads, building, river management, irrigation, planting trees in the local levels but funds are being allocated in the areas beyond this. 

The government is spending Rs 7.98 billion in the PM Agriculture Modernization Project to attract youth in agriculture, generate employment at the local level and prevent youth from migrating to foreign countries. 

The government aims to bring 71 zones into operation related to agriculture, fishery and livestock to generate employment opportunities. It aims to deploy students studying agriculture programs as interns in project areas to provide technical assistance to farmers and employ graduate students for a year on a contract basis. This program which is currently in operation has not been able to stop youth from migrating abroad. 

To increase employment, the government has introduced a program to provide loans to startups at subsidized rates. To motivate young entrepreneurs to begin startup businesses, the government is providing loans up to Rs 2.5 million at one percent interest rate. 

The government has also announced to provide services like registration, renewal and other services of startup business free of cost through a one door system, facilitate in policy level to attract foreign investment in startup businesses and a challenge fund of one billion rupees will be set up.

However, the modality of its implementation is not clear since the beginning. The program was included in the budgets of the  current and previous fiscal years as well to encourage startup culture but was not implemented. 

In order to develop skilled manpower in accordance with the needs of the domestic industries, the government is also conducting workplace based training by providing a subsidy equal to three months minimum wage to the trainee workers in manufacturing and service industries. 

The government aims to provide soft loans of up to Rs 2.5 million  at five percent interest rate to students by keeping their academic certificates as collateral. This program has been in operation for many years but has not been implemented.

The government, which has scrapped the Poverty Alleviation Fund, is also creating employment through the Youth and Small Enterprises Self-Employment Fund. It has adopted a policy to make 12,000 youths self-employed by next year by providing loan facility along with technical and vocational skills.

To develop the skills of young people entering the labor market, workers returning from foreign employment and those who have lost their jobs at home, the government is investing Rs 400 million in handicraft, plumbing, electrical repair, electronics, cookery, artisan, carpentry, tailoring, beauticians, haircutting, vehicle and mobile maintenance skills. 

Expert Dr Ganesh Gurung says that the implementation part of all these programs remain uncertain due to lack of coordination. He said that the government should not delay the implementation of such programs by making a clear action plan. However, Deepak Kafle, Joint Secretary of the MoLESS said such a situation would not arise as an action plan is being formulated and implemented for the effective implementation of these programs.

No study on impact of second wave of corona

The government has introduced various employment programs but lacks reliable data on the impact of COVID-19 on the labor market. Joint Secretary Deepak Kafle admitted that the ministry is yet to conduct a study on this issue.

Last year, the National Planning Commission (NPC) had prepared a report after conducting a partial study in this regard. NPC had found that the first wave of COVID itself had led to a sharp rise in poverty. This study was also of preliminary nature and NPC has also not conducted a full-fledged study. Pushpa Raj Kandel, Vice Chairman of the NPC informed that a study to assess the impact of COVID in the labor market will begin from the end of this month.

The central bank had also conducted a study on this issue and found the hotel and tourism sectors had been worst affected by the first wave of COVID-19 pandemic.