India’s Greatest Challenge: The Enigma of Youth Unemployment

Analysis of the India Employment Report 2024 by the Institute for Human Development (IHD) and the International Labour Organisation (ILO) has garnered significant attention, though some findings have been misconstrued.

Based on official data primarily from the Employment and Unemployment Surveys (EUS) and Periodic Labour Force Surveys (PLFS), the report compares data from 2000, 2012, 2019, and 2022, offering insights into shifts over 22 years, including the COVID period.

The report reveals positive labor market developments, including improved employment quality indicated by a robust Employment Condition Index. It underscores a transition toward non-farm employment and a decline in the unorganized sector, albeit interrupted during COVID.

Notably, female workforce participation surged from 24.5% in 2019 to 37.0% in 2023, though predominantly in agriculture.

Despite the pandemic, the labor market demonstrated resilience, with wages for casual workers rising, contributing to poverty reduction. While farm jobs surged during COVID, non-farm employment also increased, exceeding rates seen from 2012 to 2019.

Unemployment rates, including youth unemployment, declined post-2018. However, challenges persist, such as the disproportionate reliance on agriculture, skill mismatches, and the predominance of informal employment.

The report emphasizes the urgent need to diversify employment opportunities away from agriculture, enhance skills training, and address gender disparities. Notably, educated youth face significant unemployment, necessitating interventions to align education with market demands.

Policy recommendations include prioritizing labor-intensive manufacturing, improving job quality, promoting women’s employment, addressing the NEET (Not in Employment, Education, or Training) population, and enhancing skill training and labor market policies.

Despite strides, informal employment remains prevalent, underscoring the need for wage growth, social protection, formalization efforts, and enhanced productivity.

With India poised for continued demographic advantage, the report advocates for policies to harness this potential, emphasizing the importance of accurate statistical data to inform policy decisions amidst rapid technological change.

About Seema Vishwas

An anchor with CNBC TV18 for almost 4 years. Also co-anchors prime-time market shows like Power Breakfast, Traders only, Markets Mid-day and NSE Closing Bell.

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