Joblessness and inflation were the key concerns of the electorate at the 2024 parliamentary elections. The new government that will be signed in soon cannot take the two issues—especially that of joblessness—lightly. While there can be a debate on whether the inflation picture is indeed as dire as is being painted by some, there is no disputing the fact that the country is facing a jobs crisis. The latest Periodic Labour Force Survey (PLFS), with numbers for the January-March 2024 quarter, shows unemployment—especially youth unemployment—and underemployment are indeed very high in a country where the labour force participation rate is just about 50 per cent. So, whichever government comes to power at the Centre must pay attention to the issue.
The PLFS shows that the unemployment rate in the 15-29 age group was at 17 percent in the first quarter of the calendar year. While this was lower than the 17.3 per cent recorded a year ago, such a high unemployment rate, especially when labour force participation in this age category is just 40 percent, is a cause for concern. India, which boasts of a large young population, cannot afford to wither away this demographic advantage due to a lack of better jobs. Underemployment is a bigger issue for the country.
Even though the unemployment rate across age categories came down to 6.7 per cent in the January-March 2024 period, a granular look at the data shows a large section of those who were ‘employed’ were basically self-employed. This comes to more than 40 per cent of those employed, with 6.4 per cent working as helpers in household enterprises. As much as 10.8 percent were casual labourers. Only 48.7 per cent were salaried employees.
The youth unemployment problem in some states is starker than in others. While Kerala shows a youth unemployment rate of 32 per cent, industrialised states like Telangana also show high unemployment among this group at 26 per cent. States such as Rajasthan and Odisha, despite decent industrialisation over the years, show youth unemployment of over 20 per cent. The issue is clearly not only of inadequate industrialisation, but also of a skill gap among young people. Governments will have to invest massively in education—starting from the primary level—to ensure that future generations are well-equipped for jobs. This is easier said, but it needs to be done.