India faces a serious challenge of addressing joblessness, the spread, depth and intensity of which is reflected in the violent protests over the Agnipath scheme for armed forces recruitment. Earlier this year, too, there was rioting in the poorest state of the country, Bihar, due to anger over the non-transparent and problematic hiring process in the Railways—more than 10 million aspirants had signed up for 35,000 openings. The anxiety and frustration among the educated youth about limited employment opportunities—especially coveted government jobs that provide greater security—has been perennial, although it surfaced in a big way in recent years when the labour market was severely disrupted by the weakening of overall economic growth since 2017-18.
Unfortunately, the reality of jobless growth is not reflected in official statistics on unemployment, which are also often dated. The latest number is 4.2% on a usual status basis in 2020-21 (July to June), according to the Periodic Labour Force Survey. This captures the chronically unemployed or those who sought or were available for work for the major part of the year. 2020-21 was a year that witnessed a total shuttering of economic activity, yet the unemployment rate was not only low but also had steadily declined since 2017-18 when the PLFS series kicked off. The low rate of chronic unemployment is perhaps why joblessness rarely dominates policy discourse. The rate is low as the poor cannot afford to remain idle for long periods and get by with casual odd-jobbing or self-employment opportunities in the informal sector. An important characteristic of the chronically unemployed is the disproportionate concentration among the educated youth, 15-29 years of age, who prefer to wait for better opportunities, unlike the poor who take up whatever is available. But this cannot be an indefinite wait and can erupt into violence as has happened of late.
A growing reserve of frustrated, unemployed youth threatens to turn India’s demographic dividend of having a young population into a curse. The response of the government, of late, is through quick-fixes like mandating the filling of one million jobs in government by 2023 and the Agnipath scheme that is being tweaked every other day to mollify the protestors. Tackling unemployment cannot be done through fiat or through reservations and quotas. If this course of action was efficacious, why do ex-servicemen find it difficult to secure government jobs? India presents a paradox of skill shortages while being labour surplus. Trucks are idle because of the shortage of drivers. The steel industry needs more metallurgists. The healthcare sector is short of nurses and technicians. The construction sector needs civil engineers, hi-tech welders, bricklayers, and so on. Joblessness cannot be addressed without imparting skills that industry or the government requires. To be sure, the NDA government’s flagship Skill India mission, with three iterations of the Pradhan Mantri Kaushal VikasYojana (PMKVY), sought to address this, but the results have been underwhelming. Since 2015, the government has been able to enroll 14.2 million people, of whom three-fourths have been certified and one-fifth have been placed. If short-term training is considered, out of the 5.3 million certified candidates, only 44% were placed. Addressing joblessness requires generating sustainable growth, besides labour reform and incentivising India Inc to invest more to generate employment.