Joblessness Crisis In India! What’s The Way Ahead?

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The government has ordered the recruitment of 10 lakh people over the next 18 months as part of a massive job push. According to reports, the prime minister emphasized that all government actions in public and private sectors should be centered on employment. Experts and opposition parties have frequently raised the concern that the economy isn’t creating enough jobs to meet the high youth unemployment rate; due to which joblessness crisis is rising in India.

Young graduates are discouraged from seeking employment since they would rather try their luck with comfortable, salary-guaranteed government posts based on merits. Others blame Indian indifference. Additionally, the problem is exacerbated by the general lack of sophistication in language, communication, and appearance. Increasing demand for alternative credentials has substantially helped close the skills gap and make it possible for people to acquire in-demand talents.

A virus that can destroy India | Unemployment crisis in India explained | Abhi and Niyu

Data At Glance

This time, the tendency of progressive structural change is not normal. Earlier, it was seen that the percentage of the population engaged in agriculture went a relative decline over time in the activities. However, between 2019 and 2020 in India, 232 million more people were employed in agriculture than there were 200 million. The earnings in rural areas decreased as a result. According to a CMIE (Centre for Monitoring Indian Economy) compared to about 11 % in a 2017 report that analyzed the data between January & April 2022, the level of unemployment among graduates was 17.8 %. 

In 2021, the number of unemployed graduates was 19.3 % as compared to 14.9 % in 2019 and 15.1 % in 2020. Primarily due to the patchy southwest monsoon in June’s first fortnight, rural India was the worst hit. This led to reduced demand for and participation in the labor force. Overall unemployment in the quarter ended June of 2021-22 also surged from the previous quarter’s 9.3 % to 12.6 %. India’s unemployment rate went up to 7.91 percent in December 2021 from 6.3 percent in 2018-2019. It went 4.7 % in 2017-18.

Government jobs, which were 19.5 million in 1996-97, were about 17 million in 2016. There has been a decline of 89 % in direct recruitment in central government ministries and departments in 2015 as compared to 2013. According to India Skills Report (ISR), less than half of the Indian graduates are employable. In 2021, as many as 45.9 percent of graduates will be employable; recent data shows that there is a decline from 46.21 percent in 2020 and 47.38 percent in 2010 which creates rising in the joblessness crisis.

The unorganized sector employs 83% of the labor force in India. Whereas the organized sector only employs 17% of the workforce. In the economy, there is 92.4 percent of “informal” workers do not have written contracts, paid time off, or other benefits. Additionally, the organized sectors employ 9.8% of their workforce informally, illustrating the extent of outsourcing.

Solutions For The Informal Sectors

Numerous obstacles hamper the unorganized industry. The majority of businesses are small, employing minimal capital. Small-scale production, inferior/unbranded product quality, and a focus on regional raw material sourcing and product marketing are all characteristics of their operations. Their high death rate demonstrates their susceptibility to economic downturns and other market uncertainty. They have very limited access to affordable, dependable, and long-term loan sources. Another problem is the absence of formal identification and acknowledgment of the sector’s existence and contribution.

Why are the people dropping out of the workforce in such large numbers? Western media would have thought that “The Great Resignation” was mostly to blame. This widespread migration of workers occurs for a number of reasons, including discontent with the pay scale, fatigue, and the thriving startup culture with a high attrition rate. These aren’t the only causes, though.

The dramatic disparity between one’s higher education level and the kind of professions that individuals obtain, sometimes after a great deal of hardship, is a problem, notably in India. The phenomenal expansion of domestic companies over the past few years has fueled the emergence of independent contractors. Additionally, it is to blame for the exponential growth of the influencer market.

In spite of the increased demand for domestically produced goods and services that Atmanirbhar Bharat promises, the informal sector will soon be subject to fierce global competition. The products and services created in the unorganized sector must meet international standards and be priced competitively. It is a herculean challenge to balance the units in the informal sector. It seems like a precarious survival with their inefficient role. They have to make themselves internationally competitive in Atmanirbhar Bharat. The first presumption in absorbing these extras needs the correct prediction of labor availability. This would help to at least keep the people who are now employed.

However, we also need to watch out for the catch-22 spiral. To keep the present workforce employed, we must gradually take market share away from competitors. Diversification (both horizontal and vertical) must be promoted in order to provide high-quality jobs. Products must be the final products of completely indigenous and integrated manufacturing and supply chains. Manufacturers should design it in India in order to qualify as part of vertical diversification. Expanding into other goods and markets is known as horizontal diversification, which cleverly aligns with India’s comparative advantage of surplus labor.

Industry experts advocate the adoption of a few straightforward strategies to effectuate easy and enduring change as PM Modi organizes the government’s job recruitment. Focusing on labor-intensive technologies to advance economic progress, emphasizing vocational education more than lofty academic learning at a higher level, removing obstacles to the growth of the self-employed, and actively taking steps to control the population growth rate are some feasible steps. This would further accommodate an enormous number of Indian youth. Most importantly, Govt should make sure that information about jobs and job seekers is readily available to the public.

The informal sector must embrace three tectonic shifts with respect to internal transformation, strategic positioning, and labor-market dynamics.

India requires a fresh approach to deal with the phenomenon of rising unemployment. This necessitates a leading role for the manufacturing sector. The “MAKE IN INDIA” project is a significant development that will increase manufacturing. Decentralizing industrial operations is required to provide employment for individuals in every location. The demand for jobs in metropolitan regions will be lessened as a result of the development of rural areas, which will assist in reducing rural residents’ migration to urban areas. Complementary programs like Skill India, Startup India, etc., can improve the generation of skills and jobs.

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