India’s Jobless Growth Story
Rising Economy with rising unemployment 😐
Youth unemployment rate in India is 45.4 %, according to a think tank CMIE.
Employment growth has stagnated at 2 per cent for two decades. Without reaching 4–5 per cent, absorbing surplus labour will be impossible
— The Hindu
What is Jobless Growth ?
Jobless growth is when a country’s economy grows, but it doesn’t create many new jobs. This means that even though the economy is doing well on paper, people may still struggle to find work.
Why this happens ?
This may occur due to various reasons but some prominent reasons are companies may use machines and technology instead of hiring people or growth might happen in industries that need highly skilled workers only leaving those with lower skills without jobs or companies may exporting their work to cheap labour countries or reason may be that current employed labour is extremely productive that no more employees are need in the growth time also.
or sometimes, the jobs being created don’t match the skills of the people looking for work due to which companies may invest in machines and tools rather than hiring people, leading to fewer jobs even if the economy grows.
Why this is happening in India ?
The uncomfortable truth is that the high 8% economy growth rates have mostly come from service industries that don’t need many workers. PLI schemes by India’s ruling government has attracted only less labour-intensive businesses.
according an IIM study it has found that joblessness in India rise with education levels, this is a very concerning statement. The unemployment rate for illiterate & less educated class is nearly 1–1.5% but for educated class it is near to 15% and unemployment rate for women is nearly 18.5% which is far above the national average.
Now what’s the solution for this ?
The solution is in government actions, including simpler tax policies and major reforms to create more semi-skilled and skilled jobs. Without this, India’s large young population, seen as an asset, could turn into a big problem and liability for the country.