India is set to welcome one-tenth of the increment in global youth population in the next two decades. This can be seen as both a boon and a bane. If maneuvered successfully, a lot can be achieved with the demographic dividend. Yet, at the same time, if not appropriately managed, it has the potential to wreak havoc in society.
A demographic dividend is reaped when there is an increase in youth employment and a decrease in the number of dependents. India does have the potential, but the looming issues of escalating unemployment among the youth, especially in rural areas and among women, might dampen our hopes. However, the latest reports by NSSO are optimistic. At least on paper, we are said to have an unemployment rate of 6.6 %
(urban areas) and an overall rate of 7.95%. However, the composition of employment varies drastically between rural and urban settings, with self-employment dominating rural areas and regular wage work prevailing in urban sectors. Recent regular employment trends are primarily driven by job outsourcing. Outsourcing often lacks essential social security measures due to the nature of contractual arrangements between the outsourcing company and the workers. In many outsourcing scenarios, workers are employed on a temporary or contractual basis, and their employment is contingent upon the outsourcing contract. This lack of job security is a fundamental issue. In rural areas, agriculture still plays a vital role in employment, which, in turn, is heavily dependent on weather patterns. In both cases, uncertainty exacerbates the unemployment issue at hand.
Another hurdle we face is the mismatch between the skills imparted by the formal education system and those demanded by the labor market. A multitude of factors including but not limited to our outdated curriculum unbothered by the rapid change in technology, lack of practical education and limited focus on building soft skills add to this mismatch. Hence, education alone does not guarantee employment. Data shows a high incidence of unemployment among skilled and highly skilled workers, highlighting a gap in the education system and market demand. This calls for new education systems that can equip the youth with the required skills and knowledge. It was also noted that southern and western states fare better in youth employment than their northern and northeastern counterparts. Moreover, regions with moderate youth population growth rates exhibit better employment parameters than those with high or low growth rates. Hence, understanding the interplay between regional economic conditions, educational systems, and demographic dynamics is crucial for crafting effective policies that promote youth employment and inclusive economic growth across India.
According to the World Bank, youth unemployment in India is about 23.2%. Globally, youth are three times more likely to be unemployed than adults. Economic loss from youth unemployment can be quite high. Not only does it lead to a loss of innovation, but it also paves the way for frustration and social unrest. To tackle this crisis, India must align its education system with market demands, bridge the skill gap, and ensure inclusive growth across regions. Policy intervention will play a pivotal role in harnessing the demographic dividend. Picture Credits: https://www.e-ir.info/2022/07/10/demographic-effects-on-fiscal-balances-in-india/
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