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Unemployment in India – A Crisis

“You should not take too much stress about getting a job. Just put your focus to studies.” Aabid’s father said while returning late from work. “ Insha’Allah”, he replied wearing a smile over his sad face. Today, there are numerous Aabids who are burning their midnight oil, just in the hope that one day they will have a job to provide for their family. The number of such persons are growing rapidly especially in India where millions of unemployed men fight for a job where seats are just in hundreds. When a student invests almost two decades getting an education in various institutions and yet when he fails to find a living for himself, it surely is a matter of concern and seriousness. Over the last decade, the rate of such cases where people are seeking jobs and still are unable to find one has increased manifolds. The matter of unemployment has never been so unbridled and alarming in decades, yet somehow the people of the country and the authorities in control are not losing their calm except the ones who are part of the unemployment index obviously.

According to the Centre for Monitoring Indian Economy (CMIE), in January 2020, the unemployment rate was 7.16 % which have been fluctuating between 6 to 8.2 % during the last year, which is the highest in four decades. If this is unable to open the eyes of the government, then I do not know what would. And the rate is getting worse day by day. It is unfortunate that such a matter of concern is still out of reach from a great proportion of the country’s population. This is caused either due to fake news being spread through various online and offline media or due to lack of awareness of the masses. The impact of unemployment can easily be seen in the economy but the unemployment can create an impact on the society in ways beyond the economic impact. For example, unemployment can affect a worker psychologically. It can make a person question his/her value as a person. This can lead to stress in worker’s relationships, causing destruction of lives and families. Historically, India has a record of having an unemployment rate between 2- 3 % and now, it is even higher than 8 % which is 4 times the former rate. The average monthly rate of unemployment over the 12 months which ended with January 2020 is 7.4 per cent. Even after such a crisis, yet if we stay in denial and do not take corrective actions early enough, then it would be too late.

In various recent reports, it is expressed that the population of India reached 1,341.00 million in March 2020 and the Labour force participation has dropped to 51.81% in Dec, 2019. According to a study conducted by Azim Premji University, it says that the educated and youth are most without jobs. It is estimated that 5 million men lost their job since, 2016 right after the demonetization. However, it has been denied by the government that there is no such substantial relation between demonetization action and the recent unemployment index change. Whether related or not, it should be analyzed. But we must consider the major causes of unemployment being Slow economic growth, Population increase, Fall of cottage and small scale industries, Slow growth of Industrialization, Less investment, Defective planning, Gap between demand and supply, etc.

In country like India where a population of youth between the ages of 15 to 30 is highest in the world, it is very necessary that jobs are created in such a proportion to meet the employment requirement of the people, but we can see surely through the above data that the opposite is being done. Also, the jobs created in India are of such nature that favours the employers or companies first. It means that for a job in India one must have a higher qualification in education in addition to the experience of work as per the requirement of the employers. This system fails to provide a job to the people who just have completed their education and got no experience. So clearly, this will create a gap between the people seeking a job and the opportunity to work in society. On the contrary, in-country like Germany, the work is given to people not only on the basis of qualification of the seeking person but also on their skills. For example, if a person is having good skills in art and designing, then he/she will clearly be employable in Germany, but he/she will end up unemployed in India. That is why unemployment is more common between urban educated people rather than the people in the rural areas. In addition to these points, the Advancement in technology and huge imports from foreign countries also has made a large number of people jobless. We cannot ignore the economic slowdown of the country which has made things even worse other than structural factors. The economic slowdown is a result of a decline in the demand (investment and consumption). The Aggregate investment is below 30 % of the GDP which is lower than the 15 year average of 30%. Also, private consumption has declined. These all factors lead to various problems in the life of people which will lead us to the World Happiness Report that was surveyed amongst 156 nations by UN Sustainable Development Solutions Network in which India has dropped down seven ranks as compared to 2018 rankings. India was at 133rd rank in 2018 report, but India ranked at 140th position under the 2019 report.

If we talk about women, which are an inalienable part of the society and an important part of the labour force of India, comprises about 48.4% of the country’s overall population. But it is unfortunate to the Indian economy that it still comprise only about 26.97 in Labour Force Participation Rate (LFPR) according to World Bank report in India. However, the world’s average is at 48.47% in 2018. This shows the declining rate of women participation in the labour force especially in India, which is not a good sign of economy as we fail to get that demographic dividend that we should be getting.

According to a Joint report by Bain & Company and Google, the Labour Force Participation Rate among Women in the country is one of the world’s lowest and is continue to decline[1].  In-country like India where women are always seen as inferior to men from ancient times, there is still a long road to cover for the position of equal participation in society. Even today, women are supposed to do household jobs and expected to raise the children alone. They are seen as second class citizens even if the rights conferred by the Constitution of India advocates the opposite. This too is a major reason for less contribution of women section of the society in the economic affairs, particularly in India. According to the study, the unemployment rate of women, in particular, is 18% in 2020, which is almost double as compared to 7% of the overall unemployment rate. Only 1 in 5 entrants to the labour force is a woman. It shows that women are reticent in joining the labour force. It is a matter of contemplation that unemployment in women is more in the Urban and educated class than the rural class. The people who are not getting work because of illiteracy and amateurishness can be understandable, but when the educated and the skilled fails in the same, there must be something wrong.

The women will also be the worst hit by emerging technologies.“Women hold most of the administrative and data-processing roles that artificial intelligence and other technologies threaten to usurp” the Bain & Company-Google report said, citing a 2019 study by a Washington-based Institute of Women’ Policy Research. “As routine jobs become automated, the pressure on women will intensify and they will experience a higher unemployment rate.”[2]The Report also noted: “If actions are not taken on an urgent basis, then the economic and employment gap between men and women will continue to widen in India at an alarming rate.”

The need of the hour is creating job opportunities, further investment in health and education, and encouraging entrepreneurship among women could metamorphose India’s economy and society.

Out of the various issues related to unemployment, the unemployment of the people living in the urban areas is growing day to day which should be a matter of concern too that is called Urban unemployment. According to the Centre for Monitoring Indian Economy (CMIE), the Urban Unemployment rose to 9.7 % in the starting of this year and peaked even to 9.71 % in August 2019. However, rural unemployment is between 5.97 % to 6.93% in the last month[3]. It means the people of village areas are comparatively more employed than their urban counterpart. The types of jobs that are required in urban areas are different from those of the rural work and we are clearly failing to provide an adequate number of jobs in urban areas. Therefore the number of people seeking jobs is quite more than the people getting jobs making urban unemployment to rise.

In order to tackle all these unemployment related issues and meet jobs creation requirement of the country, a major role is played by the Union Budget. Also due to declining GDP of the country and other depreciation factors, the budget of the year is expected to fulfil the requirements and meet the need of the hour. Therefore, first of all, the budget should focus on reviving demands. In rural areas, the interest of the marginal farmers and the landless labourers to be boosted. Schemes like PM-KISAN and MNNREGA should be encouraged. The unnecessary taxes paid by rural farmers should be removed. In the case of, urban areas, activities like construction and related activities should be revived. The activities that engage the maximum number of people should be encouraged by the government.

However, the Union Budget 2020 is not looking as promising as it should be in the first glance. The Finance Minister Sitharaman addressed the parliament for over two hours during the presentation of the budget, but there are no solid frameworks or solution for the problem of alarming unemployment crisis of the country. The FM talked a few measures that would facilitate in the establishment of start-ups or MSMEs (Ministry of Micro, small and Macro Enterprises) in the Budget 2020 that could help in the creation of new jobs[4]. The government in the matter of unemployment and creation of jobs adequately has nothing but failed. Rather a more serious action should be taken by the government to tackle such a crisis.

Even if we make peace with the lack of actions of the government. But the government decision to junk the NSSO (National Sample Survey Organization) report on the consumption expenditure and showing no concern about the crisis of the unemployment in the country is a matter of concern in itself. The government rejected the NSSO report on the basis of findings of the survey. However, it can only be rejected on the basis of fault in design or execution and the organization has done survey the same as conducted over in several decades.  There was no any apparent difference from the surveys conducted in the past. Still, the government assured the people that there is nothing such to worry. So, maybe there is nothing such to worry or maybe the government will be able to tackle the issues related to unemployment, whatever it would be we will surely be there to witness that.

At last, we know that there are hopes of every father and the country for their sons and daughters to have a great life. And we want to see every Aabid have work in order to lead the life with prestige and honour. For that cause, we should understand the gravity of the unemployment as how it can affect lives and cause stress in relationships that may result in even divorces. It can get worse than that when a person chooses the path of crime to fulfil his basic needs and requirements of life after trying and getting no other work. At that very moment, according to me, the country fails. It fails to cater to his sons and daughters to have an eminent life. Moreover, the youth should also try to be more versatile according to the requirements of the modern jobs and advancement of society. Youth should prefer to have pragmatic skills in addition to the vocational training and other qualifications. They should not totally rely upon the degrees given by the universities in order to get a job of choice.

Another important topic that should be addressed by the country is that the ratio of people who are seeking jobs and not getting it is dealt under the unemployment index, but the important question is that how many people are actually seeking jobs?. In recent surveys, it is said to be declining. In this situation, it is even worse as India is not rich enough or economically capable so that people can stop seeking jobs. There is already a decline in labour participation and even though lesser people are seeking jobs, the number of people who are not getting jobs is in higher proportion. Therefore, the country should take remedial measures; otherwise, it will be too late. We should not stay in denial and the corrective actions should be taken as soon as possible for the betterment of the country’s unemployment crisis.

[1] Niharika Sharma, “It’s a bad time to be a job seeker in India-And a double whammy for women” Quartz India, Feb.20, 2020

[2] Niharika Sharma, “It’s a bad time to be a job seeker in India-And a double whammy for women” Quartz India, Feb.20, 2020

[3] Arnika Thakur,” Urban unemployment rate rises to 9.7% in January: CMIE” Fortune India,11 feb,2020

[4] Editorial, “India needs job! Can Budget 2020 fix the problem?” Business Today,14 feb,2020

This article is authored by Sheikh Aman Rana, student of BA.LLB at School of Law, Sharda University, Greater Noida.

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