India's unemployment rate remains high, worsened by Covid-19 pandemic

Daily wage labourers wait for work at a traffic intersection in Gurugram, Haryana. ST PHOTO: NIRMALA GANAPATHY

NEW DELHI - Engineering graduate Govind Mishra, 31, had dreams of earning a fat pay cheque in a regular office job after completing his Bachelor of Technology degree (BTech) a decade ago.

He had worked in the private sector as a data manager for four years but had no job satisfaction and was unable to sustain himself on 8,000 rupees (S$144) a month in New Delhi.

He then decided to try for a government job but was unsuccessful despite four years of sitting exams to qualify for a job. He is now back in his village helping in farm work, toying with the idea of starting a business like a village shop.

"I thought there was a value to BTech. But when you reach the job, you realise companies want totally different skills like (programming language) Java, which was not there in the syllabus," he said. "I will not apply for a job again."

Disillusionment among India's employable population, analysts said, was a worrying trend amid its unemployment problem.

India's labour force participation rate, which is the percentage of the population that is either working or actively looking for work, is 40 per cent, while the global rate is 60 per cent.

"It is not that everybody is hopeless. But people on the margins are losing hope and that is not a good sign," said Mr Mahesh Vyas, managing director of the Centre for Monitoring Indian Economy (CMIE).

Jobless growth in India was a problem made worse by the pandemic. Unemployment went up to 7.83 per cent in April, from 7.6 per cent in March, according to CMIE.

In 2019 to 2020, there were 442 million people in the labour force, and the number fell to 424 million the following year when India had a stringent Covid-19 lockdown.

As the economy started revving up on the back of pent-up demand, the number rose to 435 million people.

"It's a challenge pent-up demand can take care of to some extent. But the recovery is still ongoing. We are not employing as many people as (we were) pre-pandemic. We need more investments to happen and this is not happening," said Mr Vyas. "Going forward, the situation looks challenging."

Women, in particular, have been dropping out of the workforce in a trend that has continued to worry policymakers. Factors range from having to stay home to take care of children to not having enough job opportunities.

Job creation has not kept pace with the 12 million people who enter the workforce every year. This is due to falling investments, an education system seen to be out of tune with the growing economy, slowdown in the labour-intensive manufacturing sector and the service-driven economy.

Women daily wage labourers wait for work at an intersection in Gurugram, in Haryana. ST PHOTO: NIRMALA GANAPATHY

Prime Minister Narendra Modi unveiled a Make in India programme in 2014 to push local manufacturing and create jobs. But the manufacturing sector has not yet taken off, making up just 17.4 per cent of India's gross domestic product in 2020.

And the situation among graduates is also grim. An Azim Premji University report said that unemployment among the well educated is thrice the national average.

Government think-tank NITI Aayog's vice-chairman Rajiv Kumar was quoted as saying early this year that 45 per cent of management students and 48 per cent of engineering ones were unemployed.

Mr Rishav Ranjan, national general secretary of Yuva Halla Bol, a national movement against joblessness, said: "This is a chain of unemployment which continues and never declines. The applicant pool is not declining because you have fresh graduates even if some have given up."

Job seeker Amit Lodhi at his house in Bulandshahr in Uttar Pradesh state. He holds a master’s in political science, and has tried unsuccessfully to get a dozen government jobs over the past six years. ST PHOTO: NIRMALA GANAPATHY

There is a greater demand for government jobs, considered to provide job security and prestige particularly in the central belt states, which lead India's demographic dividend.

Even though government recruitment has been falling, some 11,000 applicants, including law graduates, engineers and people with MBAs, showed up five months ago to apply for 15 job vacancies, including as an office helper and driver in Madhya Pradesh state.

"The pandemic where people lost jobs has made people want government jobs even more," said Mr Ranjan.

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