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Is unemployment becoming a never-ending battle in India

Oct 12, 2023
Core Spirit member since Aug 24, 2023
Reading time 6 min.

As general elections approach, unemployment begins to dominate political debates. In such a situation, it becomes important for Indian leaders to strengthen employment in both rural and urban India with effective policies and strategies. On the contrary, every political party is trying to capitalize on the issue of unemployment. When they come to power, they not only fail to fulfill their promises but also try to suppress the public revolt. In fact they try to digress from the issue.

Their short-term political gains and populism sometimes outweigh long-term economic and employment strategies. In fact, electoral considerations distract their attention and resources from addressing unemployment. Which is having a direct impact on the continuously increasing unemployment rate in India.
As of September 2018, according to the Indian government, India had 31 million jobless people. However, the numbers are widely disputed. People, especially youth, are still looking for jobs that are nowhere in sight. They are in poor circumstances and are losing hope of a bright future. Today vocationally educated youth aged between 18 to 25 do not find any jobs upon passing out and unemployment is estimated around 40%.

The National Statistical Office (NSO) reported that India's unemployment rate stood at 6.9% in 2019-2020, which is higher than the global average of 5.4%. Additionally, the youth unemployment rate in India is even higher, at around 17%.

According to the Centre for Monitoring Indian Economy (CMIE), India's unemployment rate was nearly 8% in December 2021 and more than 7% in 2020 and for most of 2021. It further increased to 7.45% in February 2023, up from 7.14% in January 2023, leading to a total of 33 million unemployed individuals compared to 31.5 million in January; And for July, the overall unemployment rate in India is 7.95 percent as of July 2023.

Neither urban areas nor rural areas are untouched by the crisis. While rural unemployment nearly doubled between 2013-14 and 2017-18, urban unemployment increased by about 50 per cent in the same period. India’s government continues to fail its jobless population in new ways. It is unfortunate that several youths commit suicide due to unemployment or become victims of mental illness.

According to the recent report of the National Crime Bureau (NCRB), in 2020 (during the first wave of Covid-19), a total of 3,548 people committed suicide due to unemployment compared to 2,851 in 2019 and 2,800 in 2018. In 2021, it was more than 7% of people.

There are a large number of highly educated youth in rural and small towns of North India who are unable to find secure paying jobs. These youth are extremely important economically, socially and politically. It would be no exaggeration to say that the activities of the educated unemployed and underemployed youth in provincial India will shape the future of the country to a great extent in the next twenty years. Despite being one of the fastest-growing economies globally, India's job crisis is more serious than it seems.

Is unemployment on the rise during the present government in India?

India's complex population and changing job market has indeed made unemployment a major concern for both politicians and the general public. But it is also true that the present government is continuously failing to deal with a jobless population.

According to a report published in The Hindu- Unemployment rate has increased during the tenure of Modi government. When Modi ji took power in 2014, the unemployment rate was 5.4%. According to data from the Center for Monitoring Indian Economy (CMIE), it had increased to 8.72% by January 2016. Then over the next few years, the unemployment rate dropped to 3.3% (July 2017). But, the unemployment rate hit a 45-year high – 6.1% – in 2017–18, the last official source. And it has almost doubled since then, according to the CMIE household survey, a widely used proxy for labor market data.
By the beginning of 2021, more than 25 million people had lost their jobs. BJP government has also created far short of the 20 million jobs the economy needs every year. Additionally, there have been no nationwide plans to account for the significant gap between labor supply (which is abundant) and labor demand (which is notably lower).

But we cannot ignore the fact that Covid-19 has also affected jobs and the status of employment generation; Also the accuracy and comparability of unemployment figures during the tenure of the present government.

As for the vacancies in government and PSUs, there are indeed a number of vacancies that exist. However, the exact number of vacancies can vary and is dependent on the specific time period and the recruitment policies of the respective organizations.

Low emphasis on Skills and undeveloped educational system

Caste System

Seasonality of Agricultural Occupations (Agriculture offers employment for a large segment of the population, but only for several months out of the year).

Loss of Small-Scale and Cottage Industries due to Industrial development.

Low Rates of Saving and Investment

Ineffective Economic Planning - these are also reasons why India is still grappling with unemployment.

Can India ever defeat unemployment?,

It is right that no government can alone create jobs either in the government sector or in the private sector. Therefore to achieve the goal the government needs to be more strategic in order to address the issues of unemployment. It must adopt a proactive approach to creating jobs and managing structural transformations in the labour market, including the transition to a low carbon economy, through the development of sound industrial policies. They must ensure strong public investment, undertake public job creation, and provide incentives, direction and coordination for the development of domestic industries.
To combat the situation, along with the government some of the factors and stakeholders can jointly create job opportunities, for example:

Indian labour market, level of economic activity, structure of the economy, demand and supply of labour, skills and education of the workforce, availability of credit and investment, policies and regulations of the government, and external environment.

To create job opportunities private companies and businesses can invest capital, innovate, and expand their operations, leading to the creation of new job opportunities. As well as our education system can equip individuals with the necessary skills and knowledge for employment.

Additionally, global economic trends, trade policies, and technological advancements can influence job markets. Factors such as globalization, automation, and outsourcing can have both positive and negative effects on employment, for which proactive approaches from the government, businesses, and individuals are needed. Macroeconomic factors such as economic growth, inflation, and investment climate significantly impact job creation.

Entrepreneurship can also provide individuals with an opportunity to create their own jobs and become financially independent. Government can encourage entrepreneurship by providing access to credit, promoting business incubators, and providing training and mentorship programs for entrepreneurs.

It is important for the government to take immediate action to address this issue and provide support to those who are struggling to find employment. This can be done by implementing effective policies and strategies that focus on job creation, skill development, and entrepreneurship. Additionally, it is important to ensure that the benefits of economic growth are distributed equitably across all sections of society. By doing so, India can move towards a more inclusive and sustainable future.

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