The public sector is a big employer of youth, but its share as a job provider has been shrinking despite the fact that government jobs are the preferred option for 80 per cent of the rural and urban youth.
Although everyone expected the Interim Budget to have something on jobs, there was no mention of it in the document. The finance minister neither talked about jobs nor about unemployment. In a bizarre situation when the general public has no clue about the real rate of unemployment in the country, it is difficult to imagine what the government is doing to solve the serious problem of finding jobs for the growing number of jobless youth in India.
If unemployment is indeed at a 45-year high of 6.1 per cent as per the officially unannounced NSSO statistics, then the top priority of the government should be to have a plan of action to provide jobs for the youth in the organised sector. The CMIE, a highly rated private think tank, has calculated India’s unemployment rate at 7.38 per cent. Both the NSSO and the CMIE have found that the jobless rate among youth is significantly higher compared to the overall population and hence they deserve more attention. Also, today’s youth will not only be important voters in the next general election but also they are the future of India.
According to the NSSO, in the rural male youth between age group of 15 to 28, the jobless rate was 17.4 percent and for females, it was 13.6 percent. For urban males, it was 18.7 per cent and for females, it was much higher at 27.2 per cent. Unemployment for young educated rural males was 10.5 percent and for females, 17.3 per cent.
It is the eighth passed or tenth failed youth who are the main body of jobseekers today, especially in rural areas. Even when there are vacancies in the job market, such youth prove to be unemployable because they lack the skills that are in demand. Even college graduates are not employable because they do not have the competence that the employers are looking for. Today, there are 282 private universities all over India and students are getting degrees from them after which they are actively looking for jobs. Some of these private universities do not have a high standard of teaching and are doling out degrees without proper assessment of knowledge and skills of the students at the end of courses.
The government sponsored state universities, IITs and IIMs with higher standard of teaching are difficult to get into and have limited capacity. The gross enrolment ratio for higher education in India is around 25 which is much lower than South Korea, which has a high ratio of 93, and China, with a ratio of 48. In India, there are more educated unemployed than uneducated ones because they are reluctant to take up jobs in the informal sector and blue collared jobs in factories.
For the unskilled job seekers, there is an urgent need to start rigorous skills training programme in the villages and cities. Students trained should be able to find jobs. The National Skills Development Corporation is supposed to undertake the skilling of the youth in India and lakhs of students are being trained and many are finding jobs. Similarly, the States are training youth in the PMKVY under the centrally sponsored and managed training programme.
Of the 14,000 Industrial Training Institutes affiliated to the National Council on Vocational Training, 84 per cent are in private sector. Though the private institutes are also training in skills but their standards are not high and hence their certification is not of high value. There is need to regulate the kind of training they give and bring it on par with government ITIs. There must be some mismatch between the training given by the ITIs and the demand by industry because only around 20 per cent students find placements.
Similarly, there is an urgent need to increase the funding of state universities because their teaching is more up to the mark and students graduating from them can opt for academic, corporate or public sector jobs.
On the other hand, there has to be greater demand for workers by industry, agriculture and the services sector that will absorb the unemployed. The public sector is a big employer of youth, but its share as a job provider has been shrinking despite the fact that government jobs is the preferred option for 80 per cent of the rural and urban youth. There has also been a fall in direct recruitments in central government ministries and departments by 89 per cent. The reasons for the shrinkage of jobs and recruitments are many, but the main cause is that the share of public sector activity in the economy has been falling since the liberalisation of the economy in 1991, and the private sector’s share has been rising.
Private or corporate sector jobs are also not growing because industrial growth and related export growth have been flat the whole of last year. Also, even with the increase in manufacturing activity, firms are opting for more capital intensive techniques than labour intensive ones because of the higher labour costs and being forced to maintain workers during lean periods. Automation offers flexibility of production which they are opting for.
According to a report by the Azim Premji University, a 10 percent increase in GDP now results in less than 1 percent increase in employment. Around 30 percent of all workers are on contract. Most of the workforce (around 51 per cent) is self-employed. There is need for training in entrepreneurship and giving financial support for youth wanting to establish startups. The Government can also aid them with technological and management training.
In agriculture, the youth need non-farm jobs that are remunerative and sustainable. There has to be an increase in public investment in agriculture so that better infrastructure can facilitate mobility. Regular availability of power and water in rural areas will attract private investment into rural industries like food processing, light industries such as garments, textiles and handicraft production.
The Government has to come out with a National Employment Policy to tackle all the problems concerning jobs for youth.
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David Rusnok Researcher Strengthening National Climate Policy Implementation (SNAPFI) project DIW Germany
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