Jobless Growth is Worrisome

India’s unemployment rate has been witnessing an upward spiral since the start of the year. The data released by the Centre for Monitoring Indian Economy (CMIE) shows this to have climbed to a high of 8.11% in April 2023 from 7.8% in March 2023.

It was 7.14% in January 2023. It has ranged between 6.4% and 8.3%, averaging at 7.6%. The 8.3% in April represents the zenith of the spectrum, being the highest in two years.

And the rise has been seen in both rural and urban sectors among the 20-24 year youth. While several economic indicators have shown positive growth in the post-Covid era since January 2022, the downswing in employment situation does not bode well for the health of the economy as a full recovery is predicated on rise in numbers of those engaged in work and consequent rise in purchasing power.

Former Congress President Rahul Gandhi flagged the issue in public on Sunday when he alluded to the loss of over two lakh jobs in the Public Sector Units (PSUs) alone between 2014 and 2022.

According to him, jobs in PSUs declined from 16.9 lakh to 14.6 lakh during the period. He juxtaposed the elimination of these jobs with the ruling dispensation’s promise of providing two crore jobs annually.

The bleak scenario must be viewed in the backdrop of several initiatives such as ‘Make in India’, Atamnirbhar Bharat launched by the Modi Government at its advent at the Centre in 2014 together with the introduction of National Employment Policy.

Though the Covid-19 pandemic admittedly caused a massive setback to the economy, the unemployment situation has refused to improve in sync with several other indicators and leads to the question if the nation is staring at the jobless growth.

Studies point out that only 40% of the labour force that is capable of working is actually working. Though few major economies have been growing on par with India’s, the grim reality of rising unemployment smudges the larger picture.

Unemployment is an ever-ticking time bomb as was witnessed in the middle of last year following the launch of the new recruitment policy for armed forces. Just as rising jobs stimulate economic growth, vanishing jobs could trigger explosion of social anger.

The agitation and violent protest by youth in Hindi heartland states following announcement of 4-year job under the Agnipath scheme was just a manifestation of the boiling rage among youth. The youth felt cheated as the scheme offered merely a 4-year tenure after a long wait.

Skewed development of India’s educational progress too is pointed out to be a factor behind the massive joblessness. India currently produces 1.6 million engineers annually, thanks to the mushrooming engineering colleges. Ironically, the nation produces lesser number of skilled labourers required by the industry.

Moreover, surveys point out that more than half the engineering graduates are worthless due to lack of the skills desired by the industry. The challenge faced on employment front is formidable. The government announced plans last year to hire a million people by the end of 2023 to fill vacancies in government jobs.

But it may prove to be a drop in the bucket. The McKinsey Global institute had estimated 90 new non-farm jobs would be needed by 2030.

The gap is yawning and requires answers that are not forthcoming.