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The Financial Express

India's jobs crisis exasperates its youth

| Updated: January 27, 2022 20:18:12


Srijan Upadhyay and Sagar Sharma from the eastern state of Bihar listen to Lovepreet, an immigration counsellor of Blue Line consultants, at his office in Rajpura town in the northern state of Punjab, India, January 21, 2022. Picture taken January 21, 2022. REUTERS/Krishna N. Das Srijan Upadhyay and Sagar Sharma from the eastern state of Bihar listen to Lovepreet, an immigration counsellor of Blue Line consultants, at his office in Rajpura town in the northern state of Punjab, India, January 21, 2022. Picture taken January 21, 2022. REUTERS/Krishna N. Das

Srijan Upadhyay supplied fried snacks to small eateries and roadside stalls in the poor eastern Indian state of Bihar before COVID-19 lockdowns forced most of his customers to close down, many without paying what they owed him.

With his business crippled, the 31-year-old IT undergraduate this month travelled to Rajpura town in Punjab state to meet with consultants who promised him a work visa for Canada. He brought along his neighbour who also wants a Canadian visa because his commerce degree has not helped him get a job.

"There are not enough jobs for us here, and whenever government vacancies come up, we hear of cheating, leaking of test papers," Upadhyay said, waiting in the lounge of Blue Line consultants. "I am sure we will get a job in Canada, whatever it is initially."

India's unemployment is estimated to have exceeded the global rate in five of the last six years, data from Mumbai-based the Centre for Monitoring Indian Economy (CMIE) and International Labour Organization show, due to an economic slowdown that was exacerbated by the pandemic, reports Reuters. 

Having peaked at 23.5 per cent in April 2020, India's joblessness rate dropped to 7.9 per cent last month, according to CMIE.

The rate in Canada fell to a multi-month-low of 5.9 per cent in December, while the OECD group of mostly rich countries reported a sixth straight month of decline in October, with countries including the United States suffering labour shortages as economic activity picks up.

What's worse for India, its economic growth is producing fewer jobs than it used to, and as disheartened jobseekers instead take menial roles or look to move overseas, the country's already low rate of workforce participation - those aged 15 and above in work or looking for it - is falling.

"The situation is worse than what the unemployment rate shows," CMIE Managing Director Mahesh Vyas told Reuters. "The unemployment rate only measures the proportion who do not find jobs of those who are actively seeking jobs. The problem is the proportion seeking jobs itself is shrinking."

VOCAL FOR LOCAL

Critics say such hopelessness among India's youth is one of the biggest failures of Prime Minister Narendra Modi, who first came to power in 2014 with his as yet unfulfilled promise of creating millions of jobs.

It also risks India wasting its demographic advantage of having more than two-thirds of its 1.35 billion people of working age. 

The ministries of labour and finance did not respond to requests for comment. The labour ministry's career website had more than 13 million active jobseekers as of last month, with only 220,000 vacancies.

The ministry told parliament in December that "employment generation coupled with improving employability is the priority of the government", highlighting its focus on small businesses.

Modi's rivals are now trying to tap into the crisis ahead of elections in five states, including Punjab and most populous Uttar Pradesh, in February and March.

"Because of a lack of employment opportunities here, every kid looks at Canada. Parents hope to somehow send their kids to Canada," Delhi Chief Minister Arvind Kejriwal, whose Aam Admi Party is a front-runner in Punjab elections, told a recent public function there.

"I assure you, within five years they will start returning because we will create so many opportunities for them here."

He did not explain, but party workers said their policies would attract job-creating businesses.

Punjab's neighbour Haryana, home to local offices of many global IT companies and an automobiles hub, has already ordered that most jobs there be reserved for locals. A political party in Punjab has promised something similar if voted to power.

"To an extent, if a particular sector is doing well, then some arrangements can be made to ensure that local youth get opportunities," said Amit Basole, head of the Centre for Sustainable Employment in Azim Premji University in Bengaluru.

"But if overall job creation is weak, then such policies do not solve the underlying problem. And they may also make things worse by reducing investment."

CMIE's Vyas said India needs more investment in labour-intensive industries and should bring more women into the labour force, like Bangladesh has done through its garments factories.

"NO ONE DELIVERS"

Between 2018 and 2021, India suffered its longest period of slowdown since 1991, with unemployment averaging 7.2 per cent, CMIE data shows. Global unemployment averaged around 5.7 per cent in that period.

The jobs shortage is particularly problematic for a country like India where annually 12 million people reach employment age. The economy has not grown fast enough to absorb so many people, economists say.

Also, the increase in workforce for every percent rise in gross domestic product has shrunk: the economy will have to grow at 10 per cent to raise employment by 1 per cent, said Basole of Azim Premji University.

In the 1970s and 1980s, when GDP growth was 3 per cent to 4 per cent, employment grew around 2 per cent, Basole has found.

Back in Punjab, Blue Line counsellor Lovepreet said business was booming, with his agency handling some 40 clients a day.

"I have been doing this for four years," said the 27-year-old, who gave only one name. "I am off to Canada myself, this year or next year. Politicians keep promising us government jobs, but no one delivers."

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