THE Union budget for 2024-25 has a grand target to provide employment to 4.1 crore young people in 5 years, which works out to 8.2 million a year. It is undoubtedly a major move for a country whose working group of those aged 20-59 will reach its peak in 2041. But the budget's employment prescriptions lack a clear diagnostic basis.
The Economic Survey 2024 does not reflect the nature and magnitude of the problem of unemployment (Chapter 8).
For example, it speaks of an "improved" situation "with the unemployment declining to 3.2 percent in 2022-23", "rising youth and female participation in the workforce", and a "bounce-back of the organised manufacturing sector".
On the other hand, the Centre for Monitoring Indian Economy reports an unemployment rate of 8 percent in 2023-24 for those aged above 15, up from 7.5-7.7 percent in the preceding two years. Not only that, the employment rate proportion of those employed in the working-age population edged down from 38 percent in May 2024 to 37.6 percent in June 2024. ILO's Employment Report 2024 also corroborates the poor employment conditions.
The Survey's optimism seems misplaced, especially given the emerging reality.
India's unemployment situation is more structural than seasonal and short-term.
Nearly 90 percent of the workforce is informally employed, mostly self-employed, casual labour or gig workers. That most of them live on subsistence earnings cannot be ignored without considering minimum wage legislation, social security issues and other livelihood questions. The ILO report points out that the slow transition to nonfarm employment has been reversed after the pandemic. It is difficult for an economy where manufacturing employment has been stagnant around 12-14 percent to absorb surplus labour from the agricultural sector.
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