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How to avert a demographic disaster

  • IAS NEXT, Lucknow
  • 21, Jan 2022
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By dramatically expanding basic public services, the government can create the jobs that India’s youth desperately need

What is the state of unemployment in India?

  • Unemployment rate has risen from about 15.66% in 2016-17 to 28.26% in 2020-21
  • India’s joblessness rate hit a four-month high of 7.9% in December 2021,
  • Urban unemployment rised to 9.3%
  • Getting a degree is no guarantee for a job — 9/55 million degree holders were unemployed in 2019.
  • Demand for informal jobs – India’s poor have reacted as they always did by continuing to till the field and working as labour at construction sites.
  • The demand for jobs under the National Employment Guarantee Scheme has gone up.
  • The same person (educated to an MBA or PhD) would be applying for the role of a peon, while preparing for a judge’s exam.
  • Labour force participation rate – Many have simply stopped searching for jobs. Labour force participation rate has dropped to 40-42 per cent from 47.26 per cent in August 2016
  • The case with Uttar Pradesh – The labour force has risen from 149.5 million to 170.7 million in the past 5 years
  • The percentage of those employed (as a share of the working-age population) has actually fallen, from 38.5% to 32.8%.

Where are the short comings?

  • Our policymakers have failed on job creation
  • India needs to create 90 million non-farm jobs between 2023 and 2030, to ensure our demographic surplus is absorbed.
  • We try with short-term fixes, hoping the newest trends will solve this problem.
  • India muddles with the hope that manufacturing jobs will shift from China.

Can start ups solve the issue?

  • Only a decade ago, policymakers expected India to be the world’s back office, with our people being gainfully employed.
  • Now, we hope that the new-age start-ups, can achieve this.
  • As of July 2021, there were more than 53,000 recognised start-ups in India, which had created about 5.7 lakh jobs
  • Meanwhile, the old tap of public sector jobs has gone dry — there were 11.3 lakh employees in Central Public Sector Enterprises as of March 2017. By 2019, this had dipped down to 10.3 lakh.

What needs to be done?

  • Foster on the creation of public assets and invest in human capital.
  • Expanding public services – The initial step would be to dramatically expanding basic public services.
  • Before the pandemic there were over 2.5 million vacancies for health worker, teachers and anganwadi worker .
  • Now there is a clear need to expand capacity in healthcare by 2,90,000-4,20,000 health workers.
  • We need to regularise contractual and seasonal workers in these sectors. Doing this would create over 5.2 million jobs.
  • Creating public assets & Skill Enhancement – We need to skill up the existing labour force, particularly in urban India.
  • A national urban employment guarantee scheme, with a focus on creating public assets, would help improve skill sets, provide certification and give income support.
  • Such a scheme could cover 20 million urban casual workers for 100 days, at a wage rate of Rs 300 per day, with an overall cost of Rs 1 lakh crore annually.
  • The state of Indian cities continues to be poor. Significant expansion of public works scheme could help.
  • Foster Green Jobs – Foster jobs traditionally under the remit of public services (water conservation, waste management).
  • Jobs could be generated in the renewables sector, waste management and urban farming.
  • National conversation on urban unemployment – We need roundtable meetings for government officials, MPs and MLAs to hear the needs of youth.