- It’s not rocket science to witness why there is so much clamoring for government jobs, reservations, and quotas emanating from a diverse group of people. No wonder, several religious leaders – duly backed by the political leaders/parties – unabashedly raise their voices whilst seeking quotas and reservations for their respective religions. This is despite the Supreme Court capping the reservations at 50%. Even then, few states have gone ahead and breached the upper limit just to keep the people in good humour. So what are the reasons for the unemployment ratio steadily heading northwards despite the governments in power making every effort to fill in the vacancies? Let’s delve into comprehending what’s bogging the employment scenario.
PC: Prosenjit Datta
- Prima facie, it appears the Indian economy is not undergoing duress vis-à-vis other nations in comparison, including some of the most advanced ones. However, the unemployment scenario is driving the youth to desperately seek opportunities where very limited avenues exist. The opposition parties are attempting to raise the pitch by cornering the Union Government on this front on every platform available. To address the issue, the Union Government recently kicked off a drive to recruit one million people with 75,000 being inducted in the first batch. Will this be enough? No way. Will such initiatives offer hope? This initiative is a stark reminder of India’s employment challenge as government jobs are inadequate to fulfill demand.
- The Centre for Monitoring Indian Economy’s jobs data for the May-August period underlines the scale of the challenge. People in the 20-29 age group make up 84% of the unemployed actively seeking jobs. Even the 25-29 age bracket, relatively old in the context of the Indian job, has an unemployment rate of 12.3%. The primary reason for the jobs crisis is that manufacturing growth has been led by capital-intensive firms. Consequently, the ratio of employment growth to output growth for the economy has steadily declined since 1991. It was 0.38 in the 1991-2000 period and by 2010-18, it had fallen to 0.11. India’s experience is at odds with what Bangladesh and Vietnam managed over the same period.
PC: Business Journal Daily
- Note that in the 2010-18 phase, Bangladesh and Vietnam had an employment elasticity of 0.32 and 0.38 respectively. Unless manufacturing can absorb a far larger number of youth trying to get out of barely productive farm work, India will not escape the jobs crisis. Manufacturing’s share in employment has fluctuated around 12% in the last three decades, even though it’s the best phase of economic growth India experienced. Policy attention needs to focus on removing barriers to sectors such as textiles that have the potential to absorb a lot more young, especially women, coming off farms. Both the Union and state governments need to enhance the quality of their association with industries to enable the quick skilling of young job seekers. Hopefully, necessary action backed by foolproof strategies will be forthcoming sooner than later.
