Unemployment in India: The Problem Behind the Problem
Last week, the two non-governmental members of the National Statistic Commission of India resigned from their positions after the BJP led government allegedly has not published a report on jobs in the country for over a month. While allegations of suppression of this report have already started, this piece will instead investigate the broader state of employment in India.
Over the past four years, India’s unemployment rate has steadily crept up. It was 3.41 per cent in 2014 when Prime Minister Modi took office and the most recent reports for 2016-17 show it at 3.52 per cent. Estimates suggest that India needs to create 13.5 million jobs to be on power with other countries with similar per capita income.
A recent report from the Centre for Monitoring the Indian Economy said that 11 million jobs were lost in 2018. This is concerning particularly for a young population like India where the average age of the country will be 29 by the year 2020 and 64 per cent of its population are working age. With more than a billion people living in India, it is essential for the economy and social infrastructure to not have high levels of unemployment. A high unemployed population is also a potential law and order concern. Hendrik Urdal finds a country with a high “youth bulge” makes them strife-prone.
Age-old wisdom suggests that higher growth creates more jobs. A recent report by the Azim Premji Univeristy in Bangalore found that in the recent past, increase in GDP growth has created slower economic growth. While India still maintains a healthy annual GDP growth of more than 7 percent, this may not be enough to take care of the employment problem in the country. It is also interesting to see who the unemployed are. The same report finds that this unemployment is disproportionately felt by women, the educated and those in the lower castes.
Another piece of conventional wisdom is that the more educated you are, the more employable you are. This again is not necessarily true in India where studies have shown wide gaps between education and employability. For example, a 2018 study showed that only 52 per cent of fresh MBA graduates were employable.
India heads to the polls in less than 100 days. The electorate is estimated to be 850 million people out of which 300 million will be first time voters in 2019 or in 2014, the previous election. Could this young population facing employment challenges be the deciding factor in this election? We will soon see.
Image Credit: CC by Unemployment in India/ Flickr