Young and Jobless: 63% Indians between 20-24 are unemployed

• The unemployment rate in India hit 7.1% in January 2020.
  
• According to the data by Centre for Monitoring Indian Economy (CMIE), people below the age of 30 account for only a fifth of the total employed persons.
  
• As of 2019, the people under the age of 30 having salaried jobs declined to 29% — accounting for nearly 25 million.

As many as 406 million of 1.2 billion Indians are employed as of December 2019. And the unemployment rate is pegged at 7.1% in January 2020. But this joblessness is hitting the youth the most.

The country which is known for its youngest populations — is unable to provide them with employment. Only 37% of people in the 20-24 age group are employed — and this situation could lead to dangerous consequences. This is despite the fact that India has 35% of its working population in the 5 to 30 year age bracket.

According to experts, this can impact India’s economy in the long run. “This should get much more attention from policymakers. Allowed to persist this can leave scars on India’s economy and polity for long years,” said Kaushik Basu, former Chief Economist of the World Bank.

In 2019, only one in five employed persons is below 30 years of age, according to the data by Centre for Monitoring Indian Economy (CMIE). The share of the people below the age of 30 in employment has been declining every year.

Gen X takes away the salaries

As the age profile increases, so does the rate of employment. More than half of the people above 40 years of age are employed, as of December 2019. However, an economy which is trying to push for digital transformation — needs the contribution of younger people.

“This structural shift is disturbing because this ageing profile is least capable of tackling the challenges of new technology and an increasingly competitive business environment,” CMIE said.

Over and above it, people under the age of 30 lost 25 million salaried jobs — that is a 29% reduction. And, India has fewer salaried jobs to start with — at 21% of the total employment. This includes industrial workers, white collar workers, managers and support staff.

“There is an absolute decline in salaried jobs for those under 30 years of age. There has to be at least some increase in salaried jobs for those below 30 years of age,” CMIE concluded.

Job creators, not job seekers says FM

Some part of this lack of salaried jobs, is also a reflection of growing ‘entrepreneurial spirit’ in India. During the latest budget speech, Finance Minister Nirmala Sitharaman said that these entrepreneurs are not job seekers but ‘job creators’.

However, the CMIE said that these enterprises should grow beyond just a ‘means of self-employment.’

“There is only one kind of employment that can do this — self-employment. The count of self-employed shot up by 23 million from 33 million in 2016 to 56 million in 2019. Their share in total employment has increased to nearly 14% in 2019,” CMIE data shows.

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