Agnipath offers jobs to youngsters between 17.5 years and 23 years of age.
The unemployment rate in this age group has risen from around 23% in 2017 to over 50% since 2020.
Every second person who is looking for employment in this age group is unemployed, explains Mahesh Vyas.
The government announced two hiring programmes during the week that began on June 13, but angry protesters set ablaze public property through the week.
On June 14, the government announced that the prime minister had instructed that a million people must be employed by the various government ministries over the next 18 months on mission mode.
The emphasis was on providing employment to the youth. This is ambitious and a very big announcement. To place this number in perspective, India added 2.8 million jobs in 2019-2020, the last normal year, in a sense.
The addition of a million jobs by the government is therefore very big. Government jobs are also the most coveted. This makes the prime minister's instruction even more important.
Politicians have been making demands that government vacancies must be filled and unemployed youth must be provided jobs during these times. The prime minister's guidance therefore was timely and the offer was reasonably large.
The government may not be able to fill all vacancies, but the offer of a million jobs in 18 months is generous.
However, this offer did not attract the attention it merits. Instead, a smaller but more tangible offer of government jobs took centre stage for the wrong reasons.
On the same day that the prime minister's instructions were announced, the defence minister announced the Agnipath scheme to enrol youngsters for a four-year stint in the armed forces.
Agnipath promises to hire only about 46,000 people initially; this would be increased in subsequent years.
The problem is that the scheme exposes a conflict between the government's objectives as an employer and the aspirations of the youngsters who look forward to joining the armed forces.
The Agnipath scheme limits the hiring to a four-year period with no pension or healthcare benefits after this tenure for 75 per cent of the recruits. Twenty-five per cent would be re-selected for a longer tenure and regular benefits.
The interests of the government and the armed forces are well aligned in the Agnipath scheme. The government seeks a lower financial burden from future pension obligations and the armed forces seek a younger armed force of personnel below officer rank.
But Agnipath springs a rude surprise to the Indian youth who were preparing for the status quo that offered a longer tenure and its attendant monetary and social benefits. Agitations began in Bihar and Uttar Pradesh. These spread quickly to most of north India and then also to the southern regions, particularly in Telangana. The government quickly made a few concessions, but the agitation has continued.
The violence is sad because by and large, the Indian youth does not agitate against the lack of jobs. The current agitation like the one in January 2022 with respect to employment by the Railways is essentially against the government changing its rules of employment.
It is the unexpected and substantial change in the terms of employment that seems to have riled the youth.
The employment condition is precarious. India is not creating sufficient jobs. Then there is a pent-up anger or growing frustration against stalled recruitment by the government.
Agnipath offered jobs to youngsters between 17.5 years and 21 years of age. The upper limit was relaxed to 23 years, apparently to assuage the anger among those who lost opportunities during Covid times when hiring was suspended.
The 17.5 to 21 age group is arguably of youngsters who people from most large towns would believe are still at the age of being in school or college. Till 2019, about 4 per cent of the people in the age group of 15 to 19 years were employed.
Earlier, in 2017, about 7 per cent in this age group were employed. Since 2020, this proportion has dropped to about 2 per cent.
But, this is the age of an entry into the armed forces. And the anger is amongst these people.
This can be explained by the fact that the unemployment rate in this age group has risen from around 23 per cent in 2017 to over 50 per cent since 2020.
Every second person who is looking for employment in this age group is unemployed.
This is despite the fact that the labour participation rate is very low -- less than 5 per cent. This low labour participation rate is in line with our expectation that youngsters of this age group are mostly studying.
There is only a small proportion that is looking for work. But, most of them don't find employment.
The next age group for which data is readily available is the 20-24 years bracket. This group is also impacted by the Agnipath scheme. The labour participation rate for this group is higher at 33.5 per cent. The unemployment rate is also very high at over 41 per cent. The employment rate is about 20 per cent.
Some of these 15- to 24 year olds are looking for employment in the armed forces. They are disappointed that the rules of the game have changed.
It is imperative that India finds a reasonable balance between the sustainability of government finances and the aspirations of the growing youth population. Sustained economic growth is the best solution.
India is the world's fastest-growing large economy. But, even at this rate it cannot generate sufficient jobs and its government cannot raise the resources required to adequately fund its defence requirements.
None of these can precipitate a crisis in the short run. Both require a credible plan and collective patience.
Mahesh Vyas is MD & CEO, CMIE P Ltd.
