In India, the number of unemployment protests is increasing day by day. Recently we all witnessed massive violence by students against the Agnipath Recruitment scheme. The government of India said it will create young & Agile Armed forces. But it was contract-based job recruitment, so it fronted a lot of violence.
Hashtag employment is now familiar on social media, it becomes trending every third day. But employment is a serious issue. We can see that India is the fastest growing economy across the globe. But Why with the economy, and employment in India not increasing? We will discuss the reason and also talk about the government’s steps to fix the gap?
Situation of employment in India?
According to the Feb. 2021 report by the Centre for Monitoring employment in India, the employment rate peaked at 6.9%. But when we look at the GDP data. India is upholding the world’s fastest-growing prominent economy positions. In the Financial year 2021-22, the GDP growth rate was 8.9%. For comparison, according to the IMF average global GDP rate is 3.6%.
GDP with years
Before 1991 the GDP growth rate of India was very low. But after 1991, when India majorly accepted liberalization and privatization then the GDP started touching new heights. With all this one more reform was taken up that was globalization. And it helped a lot in boosting GDP. In 1960-70 the GDP was about 3-5% and sometimes negative.
But in 1999 it reached 8.85%. Due to the economic crisis in 2008, the slipped down to about 3% but it doesn’t stay long. In 2009 it was more than 7.5% and In 2010 it reached 8.5% again. In 2015-17, it maintained to more than 7% but after that, it started to slip down again. And after the 2019 Covid-19 pandemic add fuel to the flame.
If we try to understand the meaning of Economic development. Then we can conclude that more people must be required for more production as the Economy is increasing. As economic development means an increase in the value of goods and services in the Country. So, with the increase in economic development, employment should also increase.
But despite being directly proportional, they are behaving as inversely proportional as we look towards the data.
Unemployment with years
Now after the economic discussion now talk about unemployment.
A person between the age of 15-59, who is employable and willing to do a job, can consider as unemployed. According to a periodic labor forces survey for the financial year 2021-22, the third quarter’s unemployment rate is 8.7%. If will look separately then for women the rate is about 10% and for graduates, it’s about 26%. That means from every 100 graduates, 26 are unemployed.
Causes of this issue of Employment in India
Before 1991, the Economy of India was based on a state-led model. In the state-led model, the government of India has the responsibility for the heavy machinery industry including basic capital goods. It resisted the ease of doing business and closed economy policies. All of this minimizes the involvement of the private sector and slowed the growth in the Industrial sector.
India was late
India took a long time to make these reforms happen. This makes India last in the race for Industrialization. As East Asian nations initiated the role of Industrialization in the early 1960s.
And after missing the train of Industrialization, India only grew in the Service sector. Most of India’s GDP is based on the service sector. Even now India is minimizing its industrial involvement. In 1991 the contribution of the Industrial sector was 26.5% and in 2022 it is 23.5%.
The service sector is easy because it requires a small investment. But the job potential of the Service sector is very low as compared to the industrial sector. The service sector only requires highly qualified employees. But the Industrial sector requires all types of employees from labor, workers to managers & CEO. And because of too much service sector poor people get affected.
Agriculture and Industries
The industrial sector depends on Agriculture. In India, the agriculture sector involves 49% of the whole population, but its GDP contribution is 18%. This all happens because everything should be balanced. And this situation is termed Disguised unemployment.
With time especially because of covid people are moving from the formal sector to the informal. And most of the informal sector doesn’t follow labor law. So they work according to their ease. And fire the employees.
One more reason for increasing unemployment is technology like Artificial intelligence, machine learning, etc. They are taking all jobs into their own hand. And also the people who are handling this require constant skilling, Re-skilling, and continuous learning.
Steps by the Government to Increase employment in India
It’s not true that the government is not trying to fix the problem of Unemployment. The government of India has taken Many major steps.
Under “Make in India”, with ease of doing business, India is now becoming a preferred investment destination. In budget 2022-23, 2 lakh crore outlay production has been linked to the Incentive scheme. Sales-linked incentives have been announced for electronics, automotive, and battery manufacturing.
For modernization of Agriculture and to link it with industries, many foods Parkes are starting under PM Kisan SAMPADA Yojana. With this, jobs will be created for the people of rural and semi-urban areas in the food sector. It will not only enhance more jobs but also fix disguised unemployment. Now, MANREGA will also bring jobs to urban areas.
Under New Education Policy(NEP), teachers will get familiar with the technology. And they will also acquaint with new skills. Top universities like Delhi University, can modify their curriculum according to industry requirements. Study patterns will also get revised and will focus on skills from the basic level. Atal Tinkering Labs will also begin and will appreciate young and Budding entrepreneurs. So not only do we make employees but also the employers.
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