Two piece of information regarding the employment condition in
the country came to my notice yesterday. The first piece was encouraging. The
latest data released by the Employees State Insurance Corporation says "A
whopping 19.6 lakh new employees were added to the payroll of Indian companies
in November 2019. This is the second highest monthly addition of new employees
in the formal sector after 19.86 lacs addition in July 2019.
The second piece of information was rather disturbing. As per
the latest release of the Centre for Monitoring Indian Economy (CMIE), the
employment rate in the country rose to 7.5% during September - December 2019
period. Reportedly, this is the highest rate of unemployment in 45 years. The
unemployment has recorded consistent increase since 2017 (post demonetization).
As per the CMIE data release:
(a) The unemployment
in the urban areas is at 9%, much higher than the rural areas and the national
average.
This could be due to two factors: (i) lower economic activity in
the industrial sector; and (ii) high incidence of disguised employment and
under employment in the rural areas.
(b) The unemployment
rate in the urban youth, especially educated one, is very high. While
youngsters in the age group of 20-24 years reported an unemployment rate of
37%, graduates among them reported a much higher unemployment rate of over 60%.
The average unemployment rate for graduates during 2019 was 63.4%. This trend
is alarming but correlates well with the multiple waves of urban youth unrest
in the country during past few years.
This trend may be interpreted in the following three ways:
(i) Not enough
quality jobs are being created in the formal sector. Most of the new jobs that
are being created are low paying and do not require technical or professional
skills.
(ii) The quality of
education is deteriorating faster. More and more grduates passing out of
colleges are actually unemployable.
(iii) The economic
growth is becoming much less employment intensive due to higher use of
technology.
In whichever way we interpret the data, the fact can no longer
be denied that unemployment of youth is perhaps the most serious socio-economic
challenge India faces presently; and it needs to be addressed before the things
become unmanageable.
In my view, urgency of the problem must be understood from the
following three dimensions.
1. A large part of
the fabled India story is built upon the "demographic dividend".
Unless the youth of the country could be employed productively, this dividend
could not be exploited. In two decades, India shall begin to grow old. Unless
we exploit this demographic divided today and create enough wealth for the
future, it will be very tough for Indian economy to sustain even marginal rate
of growth in 2040s and 2050s.
2. Being the home of
the largest number of youth population in the world, it is fiduciary responsibility
of India to nurture, protect and grow this invaluable resource as a trustee of
humanity.
3. Persistent
unemployment of youth could potentially push our youth towards crime and drugs
and turn our nation into a land of uber chaos, much worse than what we have
seen in many Latin American countries.
No comments:
Post a Comment