India which takes pride in being the fastest-growing major economy cannot afford to ignore youth unemployment
Published Date – 28 March 2024, 09:02 PM
India which takes pride in being the fastest-growing major economy cannot afford to ignore youth unemployment
Hyderabad: India is a nation of great paradoxes. The co-existence of contrasting narratives often results in multiple interpretations of the state of affairs. On the one hand, the celebratory tone of the official line peddles a feel-good sentiment about the state of the economy, making bombastic projections for the future, while on the other, the stark realities of growing unemployment and inequalities present a gloomy picture.
While it may be comforting to note that the global brokerage firm Morgan Stanley has revised India’s GDP growth forecast for the financial year 2024-25 to 6.8%, up from the previous estimate of 6.5%, the latest figures on unemployment are depressing.
According to the India Employment Report 2024, published jointly by the International Labour Organisation and the Institute of Human Development, the proportion of jobless youth with at least secondary education touched 65.7% in 2022, a massive increase from 35.2% in 2000.
The findings have cast a shadow on India’s capacity to reap the demographic dividend; young people constituted nearly 27% of the nation’s population in 2021. More alarmingly, the labour force participation rate, the worker-population ratio — the number of employed people per thousand citizens — and the unemployment rate witnessed a long-term deterioration between 2000 and 2018. The world’s most populous nation, which is also the fastest-growing major economy, cannot afford to ignore youth unemployment. The government and the industry need to work in close coordination to rein in joblessness. As former Reserve Bank of India Governor and economist Raghuram Rajan said, India needs to urgently fix the structural problems affecting its economy.
It would be naïve to believe the hype being generated around strong economic growth because signals from the ground tell a different story. The biggest challenge before the government is how to improve the education and skills of the workforce. Without fixing that, the country will struggle to reap the benefits of its young population. With high drop-out rates, poor quality of education and growing joblessness, it would be foolish to talk about India becoming a developed economy by 2047. There is a need to first make the workforce more employable and then create enough jobs. The lack of human capital must be a source of worry for policymakers as literacy rates in India remain below other Asian peers like Vietnam.
The female labour force participation rate (LFPR) in India remains among the world’s lowest. It declined by 14.4 percentage points between 2000 and 2019. Policymakers must focus attention on formulating schemes that can spur skill development and employment generation. The robust growth in manufacturing, services and construction sectors should guide stakeholders to optimally use the skills of India’s educated youth. The private sector too should pitch in because it is incorrect to think that government intervention alone can solve every social or economic problem.
