Staring at a demographic nightmare
We need to tackle the terror of unemployment with sound economic policies and planning
Whatever your political affiliations may be, there is one harsh reality that you cannot deny: India has been pushed into a demographic deadlock. On the one hand, we have a cohort of aspiring young minds seeking gainful employment, and on the other, we face the threat of a weakened economy which has resulted in a deplorable state of unemployment, scarce job creation and a restive youth population.
The reason for this is clear — our government is too engrossed in pakodanomics to deal with ground realities. In recent times, it has told our children: become street vendors, milk cows, or set up paan shops. While every job is important and worthy, I firmly believe in employment commensurate with one’s level of education, skill and ability.
While 30,000 youth enter our job market every day, only 450, a meagre 1.5%, are employed. According to Labour Bureau data, the NDA government created 4.21 lakh jobs in 2014, 1.35 lakh in 2015, 2.31 lakh in 2016 (representing the first nine months, since the Labour Bureau changed its series in the last quarter), and 4.16 lakh in 2017. Cumulatively, this adds up to 12.03 lakh jobs over a period of four years. In 2016, China generated 1.3 crore jobs — approximately 50 times as many as we did. Add to this, the havoc wreaked by poor economic decisions such as demonetisation and the shoddy implementation of GST, and you have a recipe for disaster. Now, four years into the NDA government, we have an army of unemployed youth — 3.1 crore people in search of jobs, according to the Centre for Monitoring Indian Economy.
This is particularly worrying in light of our demographic dividend. By 2026, 64% of Indians are expected to be in the working age group of 15-59 years — the largest workforce in the world. However, a nation’s demographic dividend is only realised when it is transformed into human capital.
It is upon us to reap the benefits of our demographic dividend by harnessing the latent potential we have. We must prioritise the need to generate sufficient employment opportunities for our youth. To achieve this, it is imperative that we focus our energy on developing a rewarding strategy for job creation. Let me share some of my ideas.
First, we must develop our labour-intensive industries such as garment manufacturing, which have a high manpower to machine ratio. Simultaneously, we should look at industries with a high labour to capital ratio, i.e. for each rupee we invest, we must seek to generate the maximum possible number of jobs. This is especially the case in thus far unexposed sectors such as food processing, manufacturing, media and entertainment, which harbour untapped potential. To add to this, we should invest resources in building industries that offer a high indirect to direct job creation ratio. A prime example of this is tourism and hospitality.
For every job generated in tourism, job creation is spurred in affiliated sectors such as accommodation, food and beverage, transport, entertainment, and the upkeep of attraction sites. However, unfortunately, we have failed to take advantage of this sector’s unparalleled potential. In 2016, India received 8.9 million tourists, as against Singapore’s 16.4mn.
Second, we must recognise the importance of employment-focused skill development. Here, I am not talking about the government’s Skill India programme that started out in 2015 with a target to train 50 crore people by 2022 , but managed to train less than two crore between 2014 and 2017. Rather, what I have in a mind is a focused mission to harness our potential with time-bound implementation.
For this, we must build robust links between our academic institutions and India Inc., leveraging the National Skill Development Mission to converge the job-seekers with the job-creators. We should emulate and adapt Germany’s apprenticeship model. Germany has an unemployment rate of 3.7% — one of the lowest among OECD nations. Even during the Great Recession, while the German economy was debilitated, their employment was hardly impacted. It is widely accepted that they owe this, in large part, to their Dual Vocational Training Programme, which has been established as a part of the German education system and is regulated by law. It links vocational training institutes with Small and Medium companies, affording students the opportunity to divide their time between the vocational school and work experience.
Lastly, with 58% of our rural households involved in agricultural activities, we must make farming profitable so as to attract our youth to the industry. To achieve this, we need to step beyond the traditional separation of farmer and businessman, instead converging them in the arena of food processing.
Today, India is at the cusp of a demographic nightmare, and it will take a series of dedicated efforts to lift our youth and our nation out of this despondent state. We must act immediately to tackle the terror of unemployment with sound economic policies and meticulously planned strategies to generate jobs.