India Skills Report suggests that by 2025, more than 250 million of India’s youth would have entered the workforce. As many as 5,000,000 Indian students graduate every year. Around 15 million youth enter the workforce every year. Education has become a mafia with private colleges mushrooming across India.
India is a young nation where 62 percent population is in the working-age group and more than 54 percent of the population is below 25 years. Utilized the proper way, these people can add a 2% GDP growth and can be a driver of economic change in India. However, if these people are unable to find gainful employment, social instability and unrest can follow.
By themselves, the statistics tell a sorry story. India created only 135,000 jobs in eight labor-intensive sectors, according to the Labour Bureau in 2015, whereas the number of people working or looking for jobs grew by more than 10 million. Job generation in fact observed a sharp decrease to 135,000 (2015) from 421,000 (2014).
There is more statistics. According to the Economic Survey, annual employment growth in India was only 0.5 percent during 2004–12, whereas labor force growth was 2.9 percent. GDP growth on the other hand hovers around 7 percent.
Plus, there have been job cuts left right and center. Snapdeal, Flipkart, Ola, Larsen and Toubro (L&T), Aircel, etc. fired employees in bulk. Besides the existing backlog, there are fresh additions to the pool of unemployed workers per year.
This significant gap between GDP and employment growth has led to jobless growth in India. This shows that increasing the economic growth rate or the GDP figures is not enough. It is an essential condition but not a sufficient one for job creation. In a labor-intensive country like India, it is not the GDP but employment generation that has to be the metric of economic and social growth.
This decline in employment generation is worrying. It prevents the benefits of economic growth from reaching the masses. Additionally, it dilutes the advantages accompanying high growth. It is a complex and formidable challenge that needs to be taken head on.