India's unemployment crisis: 1.3 million youth need jobs every month, eight million a year, says World Bank report

By Chaitanya Mallapur

Mumbai: More than eight million jobs are required every year for India to keep its employment rate constant, as its working-age population (above 15 years) is increasing by 1.3 million every month, a new study has found.

India's employment rate has been declining due to women leaving the job market, according to a World Bank report, 'Jobless Growth?', published on 15 April, 2018.

While the male employment rate in India between 2005 and 2015 declined “very little”, the female employment rate declined by nearly five percent per year, data show.

India’s employment rate was 52 percent in 2015, below Nepal (81 percent), Maldives (66 percent), Bhutan (65 percent) and Bangladesh (60 percent) but above Pakistan (51 percent), Sri Lanka (49 percent) and Afghanistan (48 percent).

TABLE 1

The working-age population, aged 15 and above, across South Asia is expected to increase between eight percent and 41 percent by 2025.

“To reap the benefits of ‘demographic dividend’, sufficient new jobs need to be created,” the report said.

Jobs crisis. Representational image. Reuters

Representational image. Reuters

South Asia re-emerged as the world’s fastest-growing economy with growth of 6.3 percent in the last quarter of 2017 and 7.2 percent in the first quarter of 2018. The region’s growth is attributed to India’s economic resurgence, post the slow down due to demonetisation and implementation of goods and services tax to 7.3 percent in 2018 (based on forecast). About 80 percent of South Asia’s gross domestic product is generated in India, the report said.

Growth, however, is not the only factor to achieve higher employment rates enjoyed by other developing nations, particularly among women, the report argued.

“More than 1.8 million young people will reach working age every month in South Asia through 2025, and the good news is that economic growth is creating jobs in the region,” Martin Rama, World Bank South Asia Region chief economist said.

“But providing opportunities to these young entrants while attracting more women into the labour market will require generating even more jobs for every point of economic growth.”

The battle for jobs continue

As many as 18.3 million Indians were unemployed in 2017, and unemployment is projected to increase to 18.9 million by 2019, according to The World Employment and Social Outlook–Trends 2018 report by the International Labour Organisation, released on 22 January, 2018.

There is widespread resentment among youth with lack of employment opportunities in the country.

The situation seems to be grim, considering the number of people applying for government jobs. Over 28 million applicants are expected to appear for 90,000 jobs offered by the Indian Railways this year, The Times of India reported.

More than 200,000 candidates were competing for 1,137 police constable vacancies in Mumbai, many of whom were over-qualified: 423 had degrees in engineering, 167 were Masters in Business Administration and 543 were post-graduates while the basic qualification required for the post was a pass in 12th standard.

As many as 590,000 jobs every month–or 7 million annually–were likely to be generated in 2017-18, according to a report, Towards A Payroll Reporting in India, published on 15 January, 2018.

Prime Minister Narendra Modi had claimed that lies were being spread about lack of jobs quoting new but contested data, FactChecker reported on 29 January, 2018.

Over 100,000 jobs in the second quarter of 2017-18, double that in the first quarter

About 136,000 jobs were added in the July-September quarter of 2017, more than double the number added (64,000 jobs) in the previous (April-June) quarter, Santosh Kumar Gangwar, minister of state (independent charge) for labour and employment, informed the Lok Sabha (lower house of Parliament) in his reply on 2 April, 2018 based on the seventh round of quarterly employment survey (QES) report released on 12 March, 2018.

The April-June quarter had seen a 65 percent decline in addition of jobs over January-March 2017 quarter (185,000 jobs).

The QES measures employment across eight major sectors–manufacturing, construction, trade, transport, education, health, accommodation/restaurants and information technology/business process outsourcing. The eight sectors account for 81 percent of total employment units having 10 or more workers. The report covers 11,000 units across 36 states and union territories.

TABLE 2

The manufacturing sector added the most (65 percent) jobs between July and September 2017, followed by education (15 percent). Construction was the only sector that saw job losses.

Jobs added during the demonetisation period

As many as 122,000 jobs were added during the October-December 2016 quarter that witnessed demonetisation, an increase of over three times (281 percent) compared to its previous quarter that added 32,000 jobs.

Further, 185,000 jobs were added in the following January-March 2017 quarter, which sustained the demonetisation impact and slowed down the economy, an increase of nearly 52 percent over the October-December 2016 quarter.

“Human capital is now the fastest-growing component of India’s wealth,” Ejaz Ghani, lead economist at the World Bank wrote in Mint.

“Investing in people through healthcare, quality education, jobs and skills helps build human capital, which is key to supporting economic growth, ending extreme poverty, and creating more inclusive societies,” he said

The author is an analyst with IndiaSpend.

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Updated Date: May 02, 2018 11:37:12 IST

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