Just before the Covid crisis at the end of 2019-20 financial year, India had (according to the data provided by the Centre for Monitoring Indian Economy) around 403.5 million employed people and around 35 million openly unemployed people in the country. To this existing pool, each year India adds roughly 10 million (or 1 crore) new job seekers.
However, over the past year, several millions have lost their jobs. As a result, as of January 2021, India had only about 400 million employed. It underscores the stagnancy in India’s employment levels.
If we look at the Centre for Monitoring Indian Economy (CMIE) data, which is being compiled since 2016, the total number of employed people in India has been steadily coming down. It was 407.3 million in 2016-17 and then fell to 405.9 million in 2017-18, and to 400.9 million at the end of 2018-19.
In other words, even with India’s economy growing, albeit at a decelerating pace, before the Covid crisis, the employment situation was getting worse. That is why the total number of openly unemployed people became 35 million.
The Indian youth has become the first casualty, with the unemployment rate reaching 34 per cent among the 20-24-year-olds in the first quarter of 2019, it was 37.9 per cent among the urban lot, according to the CMIE.
Official sources from the Government of India do not give very different data: According to the last 2018 Periodic Labour Force Survey, the unemployment rate among the urban 15-29-year-olds (a very large bracket) was 23.7 per cent.
Making the Best Use of Demographic dividend
According to the National Policy for Skill Development and Entrepreneurship, more than 54 per cent of India’s population is below 25 years of age and 62 per cent of India’s population is aged between 15 and 59 years.
This demographic dividend is expected to last for the next 25 years. With most of the developed world experiencing an aging population, India has the opportunity to supply skilled labour globally and become the world’s skill capital.
However, the demographic advantage might turn into a demographic disaster if the skill sets of both new entrants and the existing workforce do not match industry requirements. Hence apart from skilling the workforce as per the industry requirements, we need to keep ourselves prepared for the upcoming challenges.
Challenges ahead in coming decade
