March 28, 2024

The Government of India's efforts to promote a narrative of job growth suggest a reluctance to acknowledge a prominent issue. As a result, it appears there's no urgent need to revise economic strategies to steer towards a growth model that prioritizes the creation of more job opportunities.

The Wire media outlet inquires about the fulfillment of the current government's 2014 employment promises, which ambitiously aimed to create two crore jobs annually. By this calculation, by March 2024, there should have been a total of 40 crore new job opportunities. The question posed is whether this goal has been achieved, and if not, what the actual situation is.

A decline in job growth within the non-agricultural sector, coupled with minimal advancements in the Skill India initiative.

According to a report by The Wire, the situation is as follows: Before the BJP assumed power (the last year for which data was available before the BJP came to power), the open unemployment rate was only 2.1% in 2012. By 2018, this rate had almost tripled to 6.1%, as revealed by the National Survey Organization's Periodic Labour Force Survey (PLFS), which has been conducted annually starting from 2017-18. This represents the highest unemployment rate recorded in 45 years of India's labour force surveys.

Before the BJP took office, the total unemployment figure stood at one crore in 2012, which then escalated to three crore by 2018, effectively tripling. Unemployment rates among the youth soared dramatically based on their education levels: for those with a middle school (class 8) education, it increased from 4.5% to 13.7%; for those with secondary education (class 10), it went up from 5.9% to 14.4%; and for individuals with higher secondary (class 12) education, the rate jumped from 10.8% to 23.8%.

The situation of unemployment among educated individuals deteriorated significantly. The rate for graduates increased from 19.2% to 35.8%, and for postgraduates, it escalated from 21.3% to 36.2%.Despite these challenges, the Government of India remained undaunted and introduced the New Education Policy 2020, aiming to nearly double the current higher education enrolment rate from 27% to 50% by 2035 for the age group of 18-23 year olds. The Wire questions how the future graduates will find employment, considering the increasing unemployment rates among the current group of graduates.

The India Skills Report 2021 suggests that almost half of India's graduates lack employability, indicating a significant decline in the quality of education within colleges and universities. This decline has been particularly evident following the rapid expansion of higher education over the past twenty years. This trend is driven by two main factors. Firstly, the quantity of affiliated colleges in India, which are connected to universities and where exams are overseen by either state or central universities, has surged from about 10,000 in the early 2000s to 42,000 by 2020.Universities, not to mention the University Grants Commission, possess limited capabilities to oversee or manage the activities of these colleges. Nonetheless, the expansion has been rapid, with an average of four new colleges emerging daily, including weekends. Secondly, the majority of these colleges are privately owned, established by builders and contractors in collaboration with local politicians, who frequently ascend to prominent positions. Given this trend of private college expansion, it's improbable that the quality of education will enhance. Therefore, unemployment rates may persist at similar levels, especially if the creation of non-agricultural jobs fails to keep pace with the influx of new job seekers.

Skill India was highlighted as a component of the new National Skills Policy introduced in 2015, which set an ambitious objective to skill 40 crore workers by 2022. What was the result? In 2012, the proportion of the workforce that had formal vocational education or training was 2.3%. By 2022-23, this percentage had marginally increased to 2.4%.According to government administrative data for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), across its three iterations, the program trained 1.8 million, 4.5 million, and 0.4 million individuals in PMKVY 1, 2, and 3, respectively. From 2018 to 2023, the cumulative job placement rates for each version of the PMKVY were 14%, 43%, and 7%, respectively. This data sheds light on the scope and effectiveness of these training initiatives. They provide short-term training, usually between 3 to 4 months. However, it's noteworthy that a considerable number of the participants labelled as "trained and certified" are actually accounted for through the Recognition of Prior Learning scheme, a process that typically completes in just two days. This aspect highlights a critical detail about the nature of the certification and the depth of training received.

The unemployment rate among individuals with formal vocational education was 18.5% in 2012, but it surged to 33% by 2018.Unemployment rates for individuals holding technical degrees increased from 18.8% to 37.3% over a six-year period ending in 2018.

Nevertheless, the BJP can highlight that a greater proportion of the youth voted for them in the 2019 Lok Sabha elections compared to 2014, as indicated by CSDS Surveys. This situation can be understood through two likely explanations: Firstly, the deterioration in unemployment levels may have been too recent for the youth to fully grasp by 2019. Secondly, the government skilfully delayed the release of the 2017-18 Periodic Labour Force Survey (PLFS) unemployment data until after the 2019 election results, publishing it only a week after securing a victory. Additionally, the surge in nationalist sentiment following the Pulwama-Balakot incident possibly overshadowed any unease caused by unemployment issues.

The current job crisis is intensifying for three major groups in this decade...

Three groups are facing a growing demand, for non-farm jobs, leading to a compounded issue of both a significant existing unemployment rate and a steady increase in the number of people entering the job market.As of October 2023, there are 42 million people unemployed, which represents 10% of the workforce according to CMIE. To this number, several hundred thousand individuals are added each month, contributing to the growing stock of unemployed. Additionally, there's a consistent influx of young individuals (aged 15 and above) entering the job market, totalling at least eight million (or 80 lakhs) annually. This number is on an upward trajectory each year, driven by the expanding proportion of the working-age population. This growth is expected to accelerate annually until 2030, after which it will continue to increase, albeit at a slower pace. A significant and increasing proportion of these young job seekers are girls, who have seen a substantial rise in their educational attainment over the past two decades, in line with the growing demand for education. By 2015, India reached an 85% enrolment rate for 15-16 year olds in secondary education, up from 58% in 2010, achieving equality between genders in this regard.

Another group seeking employment comprises the under-employed agricultural workers, who made up 46% of the workforce in 2023 but contributed only 15% to India's GDP. In 1970, the average size of a farm plot was 2.25 hectares. This size decreased to 1.25 hectares by 2010, a decline attributed to the growing population, and it has continued to shrink. The small sizes of these plots hinder achieving economies of scale and the adoption of new technological inputs, resulting in low productivity and yields. Consequently, agricultural incomes are depressed, prompting migration in search of non-farm employment opportunities.

Sadly, since 2016, government actions have led to a decrease in the creation of new non-farm jobs up until the COVID-19 outbreak. Even more critically, following a sudden, stringent nationwide lockdown in April 2020 (classified as highly severe by international standards according to Oxford University's Blavatnik School of Governance), millions had to return to their states of origin from their states of work. This resulted in a striking addition of six crore (60 million) workers to the agricultural sector between April 2020 and June 2023.

...exacerbated by a shift in economic structure: an increase in agriculture's share and a decline in manufacturing's contribution.

Structural change in India ought to involve not just an increase in the industry's contribution to GDP but also a reduction in the proportion of workers employed in agriculture. Since 2020, India has experienced a reversal of trends: the agricultural sector's share has grown, and more concerning, the absolute number of farmworkers—which had started to decline for the first time since independence in 2004, due to rapid economic expansion and growth in non-farm employment, continuing until 2019—has seen a reversal, reports The Wire.