At a time when Uttar Pradesh is rolling out a “red carpet” to woo global investors, nothing illustrates the seriousness of youth unemployment in that state more than the recent instance of 5 million candidates vying for 60,224 police constable posts. A better description of this reality is jobless growth. An adequate number of jobs for the young are not being generated despite economic growth. In other words, growth is not employment-intensive enough. Unemployment is the biggest concern for educated youth, who prefer to wait for better opportunities, especially in the government, which offer the prospect of greater security. But this cannot be an indefinite wait and can force them to accept even lowly positions of peons and constables, for which they are over-qualified. This endless wait often erupts into violence, as has happened with the Agnipath scheme for recruitment into the army a couple of years ago. That year also witnessed rioting in Bihar due to the non-transparent hiring process in the railways, for which more than 10 million aspirants signed up for 35,000 openings. These bleak prospects are also observed in other states.
In urban India, the latest unemployment rate for those between 15-29 years of age is 2.5 times higher at 16.5% than the overall rate of 6.5%, according to NSSO’s latest quarterly periodic labour force survey for October-December 2023. This is a current weekly status estimate that captures those who sought or were available for work during the reference period of a week preceding the survey. A growing reserve army of unemployed youth portends serious strains on the country’s social fabric. As the electorate that swept the Bhartiya Janata Party into power in 2014 and 2019 was predominantly young-from villages and small towns-the ruling regime must expeditiously address the challenge of youth unemployment, which is rising in the relatively poorer states like Uttar Pradesh for both males and females. Among females, almost a third of the labour force was jobless in the October-December quarter of 2023. In fact, female candidates accounted for a third of the applicants for police constable posts.
Unfortunately, the challenge of youth unemployment cannot be addressed through fiat or mandating the filling of government jobs ahead of important assembly and national elections. Government jobs are, in fact, limited. Only a miniscule fraction of less than 1% of the annual average of 27.5 million applicants for central government jobs from FY 15 to FY 22 were selected, according to the minister of state for personnel, public grievances and pensions in a statement in Parliament a couple of years ago. The situation is much worse for jobs in the state governments. There is accordingly a need for generating more employment-intensive growth besides labour reforms and incentivising India Inc to invest more to generate employment.
The country presents a paradox of skill shortages despite a situation of labour surplus, with India Inc concerned that it is not getting enough skilled labour for their operations. More flexible labour markets through reform help in a big way. There is evidence that states which reformed labour laws witnessed an increase in average plant sizes and higher employment in the organised manufacturing sector. This is the way forward to enable millions of young people to get absorbed in manufacturing and services than wait endlessly for the mirage of government jobs in urban India.