Curse of Indian youth: Vanishing job opportunities

The drought of appropriate employment opportunities and rising incidences of unemployed educated graduates fail to inspire confidence about the future, says Kunal Kumar Kundu

On Thursday, India’s National Sample Survey Office (NSSO) released the salient features of the 68th round of survey with regard to employment and unemployment data.

While further details are awaited, the available data paints a rather grim picture. For starters, the latest round of the survey confirms the belief that India is experiencing jobless growth.

When the results of the 66th round was announced in 2011, it was severely criticised by the government as the usual status data (which is the main activity that people declare themselves to be engaged in on a usual basis over the course of the previous year) indicated falling employment rate (worker population ratio, or WPR) and rising unemployment rent.

In the 66th round survey, WPR fell to 392 per 1,000 in 2009-10 from 420 per 1,000  in 2004-05. It fell further to 386 per 1,000 during 2011-12. On the other hand, the unemployment rate increased from 20 per 1,000  from 2009-10 to 22 per 1,000 in 2011-12.

This means while there were 9.2 million unemployed persons in 2010, by 2012, the number increased to 10.4 million. What is even more worrying is that, the rise is unemployment rate has come about despite a fall in labour force participation rate (LFPR).
In fact, the fall in LFPR, especially of the women, is another area of concern. This can be partly explained by the increasing number of young people opting to go for higher education and thereby delaying their entry into the work force.

While this might be a good sign, drought of appropriate employment opportunities and rising incidences of unemployed educated graduates fail to inspire confidence about the future.

Interestingly, while the 2010 data was also trashed by the government as a year of aberration due to severe drought conditions and the lingering effect of global crisis, the continuation of the dismal trend through to 2012 clearly exposes the structural fault lines within the economy.

In fact, the official explanation for a high level of self-employment in 2010 was that it was a condition, forced by extreme drought as people had to give up regular occupation and take up self-employment.

However, though 2012 was a normal year, the shares of self-employment in total workforce actually increased across categories, as can be seen from the table. Quite evidently lack of gainful employment opportunities is forcing more and more people to opt for self-employment, the majority of which is low quality and low productive work.

For a country that has one of the most conducive demography in the world, this data is a grim reminder that India has its task cut out. 

The author is a Delhi-based independent economist