The recently released census data on India’s youth unemployment has only confirmed what some experts have been cautioning about. Nearly one in every four or 24% of those between 20 and 24 years of age are looking for jobs. Given the size of India’s population, this translates into millions of youth who join the army of job hopefuls every year. This raises some serious questions. How many workers will industry and services have to absorb in the next decade? How many will they absorb if they continue creating jobs as they have in the past? How many of the job seekers have the required skills or ‘employability’? These are concerns that India cannot afford to gloss over any longer.
In many ways, India presents a policy makers’ paradox. At $2.1 trillion, India is among the world’s top 10 economies in terms of size of GDP. Yet, by most estimates, India is home to the world’s largest number of extremely poor and impoverished people. This is one challenge that policymakers have been grappling to conquer over decades. This is also the primary reason why policy making over the years has tended towards inclusion rather than outright GDP expansion. This trade-off — between growth and inclusion — has undergone a rapid qualitative transformation over the last few years. Currently, the focus is on how to accelerate inclusion and growth together.
Poverty and lack of jobs have an axiomatic relationship. Reaching out to backward areas is no longer just a question of throwing food and money at them. There can be no argument over the fact that a productive job is the best form of inclusion. Handouts have a static characteristic and, therefore, cannot match the pace of people’s aspirations. The approach to inclusion must shift from handouts to more rapid growth of productive enterprises and jobs. The census data on employment reinforces this. India’s young demographic is a well-documented global story. But, there is much more to the human capital of a country than a headcount of the workforce. It is also about quality and casting the net wide to make the labour market more gender-equitable. It is not just for the economic benefit that India must skill its young population, it must do so for social reasons. While industry is creating jobs, too many of such jobs are informal. On the other hand, employment growth in services hasn’t quite kept pace. The challenge is to create the conditions for faster growth of productive jobs outside of agriculture. Otherwise, the risk of India’s demographic dividend turning into a demographic curse could become too difficult to address later.