There are no inefficient people, just inefficient systems.
As India grapples with increasing unemployment rate, especially amongst the youth, the global focus may well be on the Indian story of ‘growth without jobs’. Recent research indicates that the labour force participation rate -- meaning people who are working or looking for work -- has dropped to just 40% of the 900 million Indians of legal age, from 46% in 2016. By comparison, the participation rate in the United States of America was 62.2% early this year.
The United Nations Population Fund describes ‘demographic dividend’ as the potential for substantial national economic payoff in a period in which the working-age population is healthy, educated, and gainfully employed, with a low proportion of young dependents. India is said to have entered into 37 years, lasting from 2018 to 2055, due to a declining dependency ratio. Consequently, the realisation has set in that India needs to urgently overhaul multiple systems structurally, if it is to capitalise on this once in a century opportunity presented before it.
However, is enough being done?
The common perception that Government organisations are overstaffed and underutilised may only be partially true. Several major organisations including no less than the Armed Forces, National Public Service Broadcaster and Health Services amongst others have a shortfall of staff at various ranks. Recent estimates suggest that India has close to 8 lakh vacancies in the Government sector. However, with a burgeoning pension bill that severely affects the treasury, India is in a Catch-22 situation. Recent reforms in the labour laws, introduction of National Pension Scheme, National Education Policy 2020 and even the ‘Agnipath’ scheme for the Armed Forces must be seen in that context. However, the most recent announcement by the Indian leadership of more than million government jobs being provided in the next one-and-a-half years has the potential of being a game changer. It is also a tacit acceptance that the Private sector has failed to create enough jobs for India’s labour workforce.
Then again, how much blame can one really attribute to the Private sector? Not much, if one goes by statistics. The private industry that was already adjusting to reforms with introduction of the GST and announcement of demonetization was hit the hardest after the onset of the Covid19 pandemic. With hiring coming to a halt and semi-skilled and unskilled workforce being handed pink slips on account of reduced economic activity, the unemployment numbers had seen a surge. Even though several governmental interventions have seen the employment rates recover, the situation remains still very grim.
The private sector requires incentives, or rather an enabling environment, to provide jobs. Government, on the other hand, is responsible for creating the environment that motivates the private sector to invest, which can create jobs. Thus, the government has a heavier responsibility. While India has launched several ambitious programmes for bringing about a structural reform : upskilling of its workforce (Skill India), increasing Gross Enrolment Ratio (NEP 2020), digital inclusion (Digital India) amongst others, the question still remains -
Is India in a position to harness the benefits of its demographic dividend or will it be another episode of a missed opportunity for the country? Argumentative Indians explored solutions towards solving India’s unemployment crisis in a LIVE discussion with Mr. Naushad Forbes, Co-Chairman of Forbes Marshall, India's leading Process and Energy Efficiency company.
Mr. Forbes likens the unemployability issue in India as essentially a demand-supply problem ; that not enough quality jobs are being created and work relevant skilling of workforce is also lacking. He accepted that school and college outcomes need to better managed in line with global best pratices and that NEP 2020 may drive much of that change. That the conversion from school to college in terms of numbers also needs to be urgently addressed. Mr. Naushad Forbes also speaks about the need for appropriate skilling of workforce and then providing them with ‘quality jobs’ wherein optimal productivity may be achieved.
If India is to take her rightful position as a key stakeholder in global affairs, it needs to set an example for the rest of the world with her ability to generate quality and sutainable jobs for the hoi polloi. While any comparison with China may be faulty owing to the different systems of governance, India can take heart from the fact that it is a vibrant economy with free speech and human rights at the centre of its national ethos. India stands at crossroads and what remains certain is that we will see a much different India in 2047 - when the country celebrates 100 years of Independence. Whether the change will be positive or detrimental is one for the soothsayers to answer.