Based on the most recent data provided by the Centre for Monitoring Indian Economy (CMIE), India's unemployment rate decreased to 6.43% in September 2022, the lowest level since August 2018, and after reaching a one-year high of 8.3% in August 2022. The country's unemployment rate decreased in September 2022 due to the creation of new jobs in both urban and rural areas. The latest data comes against the backdrop of India’s festive season - this is the time around major Hindu festivals that end up boosting economic activity and hence, job growth.
But the risks from a potential global recession that could bring a slowdown in this demand, continue to remain. While India has been growing rapidly to accommodate the expanding needs of its peaking youth demographic, the rate at which its employment opportunities are growing, are sadly not enough.
Given the data, let's examine various causes of the rising unemployment:
1. The Caste system
One of the main causes of unemployment in India is the caste system, a system of social stratification that may potentially affect practically every aspect of life. In some places, people who belong to a certain caste cannot perform certain jobs. This also has the effect of frequently favouring members of a certain community above others who have the necessary skills and merit the position. Higher levels of unemployment are the outcome.
2. Inadequate economic growth
The Indian economy is underdeveloped, and economic growth is not playing its full potential. Due to the slow growth, there aren't enough job openings for the growing population. In other words, as the population grows, the economy cannot keep up with the demand for jobs, and a growing number of individuals are unable to find employment. As a result, there are not enough jobs available nationwide.
3. Lack of essential skills and job specialization
The capitalization of the economy has led to a rise in highly specialized employment, but India's educational system does not offer the proper preparation or specialization for these positions. As a result, a lot of people who want to work but lack the necessary abilities can't find employment. According to a report, a lack of future skills keeps 33% of educated young in India from finding employment. Even after completing their education, millions of students in our nation lack practical experience and solid knowledge.
4. Low rates of saving and investments
India consistently lacks adequate capital. Similar to how low savings are, investment—which depends on savings—is likewise low. If investment rates were higher, more jobs would have been generated and the economy would have started to grow. Additionally, there is a dearth of investment in Tier 2 and Tier 3 cities as well as rural areas, which results in significant unrealized job potential.
5. Increasing population
By 2024, India's population is expected to surpass that of China, and it will likely hold that title for the 21st century. Due to the inability of the nation's economy to keep up with population growth, a higher proportion of the population is now unemployed.
Educated unemployment (Imagesource-reviewsreporter)
The government at its end has put forth numerous programs that, will aid citizens' welfare and assist the nation as it recovers from the pandemic's multiple effects. Some of those being:
1. Atal Pension Yojana
After reaching the age of 60, the APY will begin a minimum guaranteed pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, or Rs. 5,000 per month, depending on the contributions made by the subscribers for their selected pension amount.
2. Ayushman Bharat
The National Health Policy 2017 advised the commencement of Ayushman Bharat, the government of India's flagship program, to realize the goal of Universal Health Coverage (UHC). The Sustainable Development Goals (SDGs) and their central commitment to "leaving no one behind" have been addressed by this project. It provides beneficiaries with cashless transactions that cover all hospital charges.
3. Aatmanirbhar Bharat Rojgar Yojana (ABRY):
It has been implemented with effect as of October 1, 2020, as a part of Atmanirbhar Bharat package 3.0 to encourage employers to create new jobs and provide social security benefits as well as to compensate for lost jobs due to the Covid-19 epidemic. This program, which is being carried out by the Employees' Provident Fund Organization (EPFO), aims to lighten the financial load on companies and motivate them to hire additional staff.
4. Pradhan Mantri Mudra Yojana (PMMY):
This scheme is being put into place by the government to support self-employment. To start or grow their businesses, micro/small business companies, as well as individuals, are offered collateral-free loans up to Rs. 10 lakh under PMMY.
Indian youth protest on streets against unemployment (Image Source-People's Dispatch)
Everyone has experienced loss in various ways since the pandemic ravaged the world. While the current state of unemployment in the nation and the government's efforts to combat it all stand true, there are certain methods we recommend for combating unemployment at one's own end as well:
1. Make saving a priority in your finances.
2. Make a plan to manage your money.
3. Construct your network strategically - go online with your CV and look for jobs actively
4. Acquire a side hustle
5. Enroll in educational programs and be updated in your field - there are many training programs available online and from the Government, free of cost.
While the problem as well as the solution of unemployment continues to remain government-focused, we as a people have to also fight doubly hard to get our daily necessities fulfilled. Often a lot of this is because of our own ignorance towards our surroundings, policies, schemes and opportunities being announced on a regular basis, training programs and skill development methods being available. We hope you equip yourself with more knowledge at your end, as the Government makes its efforts to help us out.
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