India on track to miss the demographic dividend

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It would not be an exaggeration to say that India is in the midst of a jobs crisis that requires the attention of policies, the attention of the people and the efforts of the government. India as an economy and the Indian as an individual both need and benefit from more people with the opportunity to work. However, India is in the midst of a horrendous jobs mess at best and a crisis at worst. An insight into the depth of the situation can be given by looking at some startling data that has been derived from various research platforms.

Employability – According to the India Skills report, graduate students would be less employable in 2021 than in 2020. This survey does not include students who graduated or missed graduation due to a lack of access or opportunities.

Unavailability of jobs – According to a report from FirstNaukri, nearly two-thirds of freshmen graduating this year are currently unemployed as hires on campus have plummeted.

Debt & Desperate – 37 pc of swiggy delivery men are said to be students with different aspirations. It partly explains the deficit that students carry on themselves to complete their diploma. A survey shows that 65% of students graduate with student debt and need a job in finance.

Recently, 11,000 unemployed young people flocked to Gwalior from various states for fifteen job offers for peon, driver and caretakers. Applicants included engineers, postgraduates, MBAs, and even aspiring civilian judges.

Worrisome macroeconomic indicators

According to the recent report released by the Indian Economic Monitoring Center, India’s unemployment rate climbed to 8% in December 2021, with urban India registering 7.28% unemployment and rural India s ‘rising to 7%. Further classifying the Labor Participation Rate (DWR), that is, the percentage of the population that is actively working or looking for work, India stands at 40.38% DWT. The urban active population represents 37.8% and the rural population 41.7%. Of the total employed labor force, 81% are employed in the formal sector while 6.5% are in the informal sector and 0.8% in the household sector.

The pandemic played a role in the above numbers, but the lack of concrete plans for job creation and education development remained endemic even before the pandemic.

Losing on the demographic dividend

According to data from the Population Foundation of India, 62% of the population is between 15 and 59 years old. India’s median age was 28, 29, meaning an average Indian would only be 29, compared to 37 in China and 48 in Japan.

The large proportion of the working-age population with one of the youngest working populations in the world is being touted and hailed as a demographic dividend that would propel a wave of growth and improved lifestyles. With this demographic dividend, India has enormous potential for economic growth.

Yet more than 88% of workers are employed in the informal sector, most of which are in the agricultural sector, which employs around 49% of the total workforce. The lack of skills, jobs, opportunities and employability of job seekers means that the opportunity called Demographic Dividend is quickly slipping out of India’s hands.

Rising costs and low wages add to misery

Labor income or its wage level is determined by productivity, and both the technology used and the skill level of workers determine labor productivity. According to World Bank Labor Force Reports, primary education in India was 49.22% in 2019.

Studies show that labor absorption is slow in India and can take more than five years to have an impact. Currently, India’s net national income per capita at current prices is Rs 145,679 in 2020-2021. However, annual inflation in India climbed to 4.91% in November 2021. Food inflation jumped to 1.87%, with oils and fats recording the largest price increase at 29.67 %. The cost of housing accelerated to 3.66% but slowed for fuel and lighting by 1%, from 14.35% in October to 13.35% in November. Slight deflation was observed in transport and communications from 10.9% to 10.02% and from 7.57% to 7.33% in the health sector.

What could be the way forward

A radical and massive lobbying campaign for job creators is the need of the hour. A combination of monetary or available government services or fiscal incentives must be adopted on a scale that has never happened before.

  • The culture of startups must be integrated at all levels of the city to provide solutions to problems and thus employ people. In Tier 2 and Tier 3 cities, startups still lack access to technologies and liberal registration and shutdown procedures. Regulations continue to deter many ideas from turning into businesses and jobs. The start-up cost should also be minimized or eliminated.
  • The government could support startups with infrastructure such as coworking spaces that they can use temporarily at no cost. The government can better provide certain services for a minimum period to allow the growth of startups, which will further increase the chances of being invested both domestically and abroad.
  • With NGOs reaching places and people where many government departments cannot, it is crucial to nurture and encourage them. Financial support from the government, the population and abroad must be liberal for NGOs in order to enable essential changes on the ground and to employ a vital number of socially inclined and concerned people.
  • The purpose of the regulations is to get things done the right way. However, India has a long history of red tape that has repelled domestic and international investors. The relaxation of regulations can naturally allow the citizens and ideas concerned to become job creators.

We would like to hear your opinion on how we can improve job creation at the individual, collective and political levels; your opinions, ideas and suggestions are greatly appreciated; please share in the comments or write to editor@thelogicalindian.com.

Also Read: Startups Offer Jobs to Around 6.5 Lakh in India: DPIIT Secretary

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