India’s Youth Unemployment Data Shows Exponential Growth

Unemployment has become a major problem in India. And in the past decade, it has seen a sharp increase. This is something that all of us can see around us. A few weeks back, around 35,000 posts for Indian Railways attracted 1.25 crore applications. This alone shows the desperation among youth for employment.

The above graph shows unemployment in India among the age group 15-24. One can see how the graph started going up sharply from 2008, the year of the global financial crisis. But, India initially managed to avert the crisis from affecting our economy, and we continued to grow despite the negative effects on the world economy. As Puja Mehra writes in The Lost Decade 2008-18: How India’s Growth Story Devolved into Growth without a Story,

“The government and the RBI had successfully and safely steered India out of the most severe world crisis since the Great Depression of 1930… The RBI, under Governor D Subbarao, had worked in tandem with the finance ministry, first under P. Chidambaram and then under Manmohan Singh.”

After the 2008 terror attack, the then PM Manmohan Singh had to put his best man in the Home Ministry, and hence took the finance ministry to himself from P. Chidambaram. On 24th January 2009, Singh had to go through coronary bypass surgery, and Sonia Gandhi put her man, Pranab Mukherjee, in the finance ministry and he remained in the office even after Singh came back. His policies were excessively expansionary, keeping in mind the 2009 general elections, which paved the way for the economic disaster that followed.

As Mehra goes on to write,

“As it turns out, destiny had a hand too in the grave mistake the UPA made by bringing Mukherjee into the finance ministry ahead of Singh’s bypass… [I]t has become increasingly clear that Congress and the economy had paid a heavy price for it. Before Mukherjee’s appointment as finance minister, india was on the verge of being christened a miracle economy. By the time Mukherjee exited, large fiscal deficit and a high net international debt position had made the country vulnerable to global financial shocks and terms-of-trade shocks.”

The economic disaster brought with it rising unemployment. All this led to anti-incumbency in the 2014 general elections. The changed government sought to make things right once again. But, things were no different. Over the last 8 years, the Narendra Modi government has not only failed to revive the economy, but also put it in shambles.

An important indicator that could tell the situation of unemployment in the nation is the demand for work under MGNREGA. Modi, when in opposition was a critic of the scheme. After he was elected, he said in the parliament while mocking the opposition,

“My political instincts tell me that MGNREGA should not be discontinued because it is a living memorial to your failure. After so many years in power, all you were able to deliver is for a poor man to dig ditches a few days a month.”

He wanted to tell the nation that he would create jobs which would lead to the slow death of MGNREGA. Money allocated to the scheme in 2014-15 budget was Rs 32,000 crore; in 2015-16, Rs 37,000 crore; in 2016-17, Rs 48,000 crore; in 2017-18, Rs 55,000 crore; in 2018-19, Rs 61,000 crore, in 2019-20, Rs 71,000 crore; in 2020-21, Rs 111,000 crore; in 2022-23 (Budget estimate), Rs 73,000 crore. The “failure” of the UPA became the last resort for the government to boost some demand in the pandemic struck economy. Pre-pandemic too, demand for MGNREGA continuously increased each year.

The promise of creating jobs by making India a manufacturing hub was untrue as well. UPA’s National Manufacturing Policy later renamed Make in India by Modi, had an aim of achieving a 25% share of the manufacturing industry in the GDP, instead, it dropped from 16% in 2014 to 13% in 2021.

The worst part is about to come.

The working-age population is the total number of people in the age bracket of 15-60. This also includes students who are studying and housewives, who can’t be termed as ‘unemployed’. Therefore, Labour Force is a part of the working-age population that comprises people who are either employed or are willing to work i.e unemployed. People are categorized as unemployed based on criteria. Centre for Monitoring Indian Economy (CMIE) specifies the following criteria for classifying a person as unemployed,

“ s/he should be unemployed on the date of the survey, should be actively looking for a job in the 100 hundred days (approximately three months) preceding the date of the survey and should be willing to take up the job if a job is found.”

Source – World Bank

The above graph shows something amazing. The working-age population of India rose from 84.9 crores in 2014 to 92.8 crore (approx figures) in 2020, while the Labour Force dropped (emphasis added) from 46.4 crores to 45.7 crores in 2020. Thus many people have even stopped looking for any job and pushed themselves out of the labour force. Now that they are out of the labour force, they are no longer termed as unemployed.

The drop has certainly not been gradual, and the labour force decreased largely in 2020, the pandemic year. But, the labour force as a proportion of the working-age population has been decreasing for many years now.

Source – World Bank

Hence, the conclusion can be made that a lot more people are unemployed than what the unemployment rate shows. Here too, the fall in LFPR has been more in women than men, and women are the ones bearing the brunt of India’s unemployment crisis. As Vivek Kaul writes,

“One possible explanation lies in the fact that the number of jobs available haven’t grown at the pace that could accommodate the new individuals, both men and women, entering the workforce. Hence, in a patriarchal society, men in deciding positions, have offered jobs to other men, forcing women who have searched and not found jobs to stop actively looking for a job and drop out of the labour force altogether.”

To conclude, the governments can ignore the problem or deny it like MP Tejasvi Surya, but that wouldn’t change the reality. Numbers are the reality, and those can’t change without effort. As for you, my dear readers, election results are going to be declared tomorrow, hope for change in governance (or government for that matter).

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