‘Rising unemployment in India needs steps on war footing’

On eve of International Youth Day, calls for more steps by government as several reports indicate high unemployment rates

NEW DELHI (AA) – On the eve of International Youth Day, which is observed Thursday globally, experts and policy commentators in India have called for more steps by the government to create employment opportunities.

According to a 2011 census, people aged 15-24 comprise one-fifth or 19% of India’s total population. Multiple reports, however, indicate that the number of unemployed youth in the South Asian country is rising.

The Centre for Monitoring Indian Economy, a think tank, said India’s labor participation rate in May was 40%, with 15 million jobs lost in the month.

“May 2021 is also the fourth consecutive month of a fall in employment. The cumulative fall in employment since January 2021 is 25.3 million. Employment in January 2021 was 400.7 million. This has dropped to 375.5 million,” said the report published in June.

Similarly, The Financial Express, a leading business daily, recently reported that according to the International Labour Organization’s database, India’s unemployment rate rose to 7.11% in 2020 – highest in at least three decades.

“High rates of unemployment are dangerous. If you have so many unemployed people, it means they are neither saving nor consuming. This has a direct impact on economic growth and the country’s economic potential,” Rajrishi Singhal, a policy consultant who has also worked at country’s top financial newspapers, told Anadolu Agency.

He said that while the youth are employed by the informal sector, where cash flows are unpredictable and erratic, no one can plan investments and other initiatives.

“It also impacts the level of consumption, on the future of the country. When these people are past their working age, they will have little money saved as a formal pension, forcing the government to provide social safety nets … the burden on the government will be enormous,” he said.

Ritu Dewan, vice president of the Indian Society of Labour Economics, said the situation has further worsened due to COVID-19.

“Unemployment was there even before the pandemic, but now the situation has turned from bad to worse,” Dewan, who is also a former director of the Department of Economics at University of Mumbai, told Anadolu Agency.

She said that several reports of late have pointed out that unemployment among both men and women is very high in the country, and “we need to take steps urgently.”

The government has acknowledged that virus lockdowns have affected economies across the globe, including that of India.

Earlier this month, Prime Minister Narendra Modi asked industry representatives to look at ways to increase exports, a move that could help boost employment.

Creating opportunities

According to Singhal, the government needs to work on creating employment opportunities “on a war footing.”

“Among the many alternatives available, it needs to first fix the demand side, which has been adversely affected by the pandemic. That needs to be supplemented with accelerated infrastructure investment,” he said.

Dewan agreed, saying the government needs to take steps at a policy level.

“The priority and policy should be to give a basic income to everyone and give support to unemployed youth. The situation is serious. The government has to be more active because it hasn’t done anything significant,” she said.

The lack of opportunities also adds to the worries of young people after higher education.

“There are not many options available in the government sector. I struggled for months before I completed my studies in 2014,” said Aaditya Chauhan, a Delhi resident.

“When you have less options available in the market, you have to accept jobs with low salaries. The government needs to be more serious for the youth, we are the future.”


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