Jobless, Desperate & With Debt: India On Course To Miss Out On Demographic Dividend

It wouldn't be an exaggeration to say India is in the middle of an employment crisis that needs policy focus, people's attention, government efforts. India as an economy & Indian as an individual both needs and benefits from more people having the opportunity to work. However, India is in the middle of an appalling employment mess at best and crisis at worst. A glimpse into the depth of the situation can be taken by looking at some startling data derived from various research platforms.

Employability - According to the India Skills report, graduating students would be less employable in 2021 than 2020. This survey does not include students who completed graduation or who have missed out on graduation due to lack of access or opportunity.

Unavailability of jobs - According to a report by FirstNaukri, almost two-thirds of the freshers graduating this year are jobless at the moment as campus hirings have nose-dived.

Debt & Desperate - 37 pc of delivery boys at swiggy are reported to be students with different aspirations. It partly explains the deficit that students bear on themselves to complete their graduation. One survey points out that 65% of students graduate with student debt and need a finance job.

Recently, 11,000 young unemployed men flocked to Gwalior from various states for fifteen job openings for peon, driver and watchmen. Applicants included engineers, postgraduates, MBAs and even civil judge aspirants.

Worrying Macroeconomic Indicators

According to the recent report released by the Centre For Monitoring Indian Economy, India unemployment rate crept up to 8% as of December 2021, with Urban India recoding 7.28% unemployment and rural India standing at 7%. Further classifying the Labour Participation Rate (LPR), i.e. the percentage of the population either working or actively looking for work, India stands at 40.38% LPR. The urban workforce accounts for 37.8%, and Rural stands at 41.7%. Out of the total employed workforce, 81% is employed in the formal sector while 6.5% is in the informal sector and 0.8% is in the household sector.

Pandemic did play a role in the above numbers, but lack of concrete job creation and educational development plans remained endemic even before the pandemic.

Losing Out On Demographic Dividend

According to the Population Foundation of India's data, 62% of the population is between 15-59 years of age. India's median age was 28, 29, which means that an average Indian would be 29 years only compared to 37 in China and 48 in Japan.

The large proportion of the population in the working-age group and having one of the youngest working populations in the world is touted and was hailed as a demographic dividend that would propel a wave of growth and improvement in lifestyle. With this demographic dividend, India has massive potential for economic growth.

Yet more than 88% of workers are employed in the informal sector, most of whom are in the agriculture sector, which engages around 49% of the total workforce. The lack of skills, jobs, opportunities and employability of job seekers means the opportunity called Demographic Dividend is quickly slipping away from the hands of India.

Increasing Costs & Low Wage Is Adding To The Misery

The income of labour or its wage level is determined by productivity, and both the technology used and the skill level of workers determines labour productivity. According to the World Bank Labour Force reports, primary education in India was reported to be 49.22% in 2019.

Studies show that workforce absorption is slow in India and can take more than five years to impact. Currently, India's per capita net national income at current prices is Rs 145,679 in 2020-21. However, the annual inflation in India soared up to 4.91% in November 2021. Food inflation jumped to 1.87%, with oils and fats recording the most considerable price increase to 29.67%. House cost accelerated to 3.66% but slowed for fuel and light by 1% from 14.35% in October to 13.35% in November. There was slight deflation witnessed in transport and communication from 10.9% to 10.02% and 7.57% to 7.33% in the Health sector.

What Could Be The Way Forward

Radical & Massive incentive campaign for job creators is the need of the hour. A combination of both monetary or availing government service or tax incentives needs to be taken up on a scale that has never happened before.

• Startup culture to be made part of every tier of the city to provide solutions to problems and thereby employ people. In tier 2 and 3 cities, startups still lack access to technologies and liberal registration and closure procedures. Regulations continue to deter many ideas to fructify into firms and jobs. The cost of starting up also needs to be minimised or nullified.
• The government could support startups with infrastructure like co-working spaces that they can use temporarily for no charge. The government can best provide certain services for a minimum period to enable the growth of startups, which will further increase the chances of getting invested both domestically and from abroad.
• NGO's reach places and people where many government services cannot so, the need to nurture and encourage them is crucial. Monetary support from the government, people and abroad should be liberal for NGOs to enable essential changes on the ground and employ a vital number of socially inclined and concerned people.
• Regulations are meant to enable things to happen in the right way. However, India has a long history of red tape that has repulsed investors domestic and international alike. Easing regulations can naturally enable concerned citizens and ideas to become job creators.

We would like to hear from you on how we can improve the creation of jobs from individual, collective and policy levels; your opinions, ideas and suggestions are highly valued; kindly share in the comments or write to editor@thelogicalindian.com.

Also Read: Startups Yield Employment To Around 6.5 Lakh People In India: DPIIT Secretary