Hindu Editorial Analysis : 8-April-2024

India has experienced significant economic changes over the past few decades. According to a study by the Indian Institute of Management (IIM), Lucknow, there was a surge in output growth and employment from 1987 to 2004. However, this was followed by a troubling phase of “jobless growth” from 2004 to 2019, where economic growth did not translate into job creation. This essay explores the implications of jobless growth and highlights the challenges faced by the Indian workforce, especially among the youth.

Key Findings

The study reveals some concerning trends in employment:

  • Rising Unemployment Among Educated Youth: Unemployment rates for educated individuals are alarmingly high. For example:
    • Illiterate individuals: 0.57%
    • Less educated (below primary): 1.13%
    • Highly educated (graduates and above): 14.73% (for ages 15-29 in 2020-21)
  • Gender Disparity: The labour market shows significant gender disparities:
    • The overall female Workforce Participation Rate (WFPR) was only 32.46% in 2020-21, which is 44.55 percentage points lower than men.

What Is Jobless Growth?

Jobless growth occurs when an economy grows but fails to create enough jobs. This can happen even when a country is emerging from a recession. Key factors contributing to jobless growth in India include:

  • Global Economic Slowdown: Workers may accept lower quality, poorly paid jobs that lack security.
  • Focus on Limited Sectors: Much of India’s growth comes from finance, real estate, and IT, which are not major job creators.
  • Lack of Skills: The education system often does not equip graduates with the skills needed by employers.
  • Underutilization of Resources: Many industries do not operate at full capacity due to inadequate machinery and raw materials, leading to fewer job opportunities.
  • Informal Sectors: A significant portion of the population relies on irregular, low-quality jobs, especially in rural areas.

Impacts of Jobless Growth

The consequences of jobless growth are serious:

  • Underutilization of Labor: Fewer jobs mean lower productivity and economic output.
  • Increased Poverty: This situation can lead to higher poverty levels, malnutrition, and lower per capita income.
  • Economic Stagnation: Falling employment opportunities undermine India’s potential for economic growth, especially as the youth population continues to grow.

Initiatives to Improve Employability

To tackle these challenges, India has introduced several initiatives:

  • National Skill Development Corporation (NSDC): Launched in 2015, it oversees skill development programs.
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY): A key scheme offering industry-relevant skill training to youth.
  • Digital Skilling Programs: These programs aim to equip individuals with skills for the digital economy.
  • Apprenticeship Programs: Encouraging industries to provide on-the-job training for new graduates.

Why In News

According to a study by the Indian Institute of Management (IIM), Lucknow, there was a notable surge in output growth and employment from 1987–88 to 2004–05, followed by a concerning period of ‘jobless growth’ from 2004–05 to 2018–19. This shift has raised alarms, as even premier institutions now face significant challenges in placing students during campus placements, highlighting a disconnect between education and job opportunities in the evolving economy.

MCQs about Understanding Jobless Growth in India

  1. What was the unemployment rate for highly educated individuals (graduates and above) aged 15-29 in India for the year 2020-21?
    A. 0.57%
    B. 1.13%
    C. 14.73%
    D. 32.46%
    Correct Answer: C. 14.73%
    Explanation: The unemployment rate for highly educated individuals aged 15-29 was 14.73% in 2020-21, highlighting a significant challenge for educated youth in finding jobs.
  2. Which sector is identified as a major contributor to jobless growth in India?
    A. Agriculture
    B. Manufacturing
    C. Finance and IT
    D. Hospitality
    Correct Answer: C. Finance and IT
    Explanation: Much of India’s economic growth has come from the finance, real estate, and IT sectors, which are not major job creators, contributing to the problem of jobless growth.
  3. What initiative was launched in 2015 to improve skill development across India?
    A. National Employment Policy (NEP)
    B. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
    C. Skill India Mission
    D. Digital India Program
    Correct Answer: B. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
    Explanation: The PMKVY was launched in 2015 to provide short-term, industry-relevant skill training programs to youth, aiming to enhance employability.
  4. What is one major impact of jobless growth mentioned in the essay?
    A. Increased foreign investment
    B. Higher education enrollment
    C. Increased poverty levels
    D. Improved labor market participation
    Correct Answer: C. Increased poverty levels
    Explanation: Jobless growth leads to underutilization of labor and human capital, which can aggravate poverty, malnutrition, and lower per capita income, ultimately harming the economy.

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