The Aryavarth Express
Agency (New Delhi): Economist Parakala Prabhakar in an Interview with The News Minute has recently shed light on the severe unemployment crisis gripping India, focusing on the disturbingly high rates of educated and youth unemployment. In a detailed analysis of government data, Prabhakar identified several critical issues that contribute to the current state of the job market, painting a grim picture of the nation’s economic health.
One of the primary concerns raised by Prabhakar is India’s abysmally low labor force participation rate, which ranks among the lowest in the world, particularly for women. He also highlighted the widespread problem of underemployment, where individuals may have some form of work but are not gainfully employed or contributing to the economy’s productivity. The economist criticized the government’s classification of “self-employed” individuals, arguing that many of these people are not truly employed and do not contribute meaningfully to the economy. He cited the alarming number of suicides among the self-employed, agriculturists, and unemployed as evidence of the severe distress plaguing these sectors.
Prabhakar drew attention to the staggeringly high youth unemployment rate in India, which stands at a shocking 24%, with the 20-25 age group facing an even more dire situation with a rate of 42-43%. He compared this to neighboring countries like Bangladesh, where the youth unemployment rate is just half of India’s, underlining the gravity of the problem.
The economist also delved into the crisis in the unorganized sector, where incomes have stagnated, and the growing demand for MGNREGA jobs, which indicates a scarcity of gainful employment opportunities in rural areas. Prabhakar questioned the government’s ambitious promise of creating two crore jobs per annum, pointing to the current state of the rural sector and the millions of people who have lost regular salaried jobs since the demonetization initiative.
Moreover, Prabhakar highlighted the glaring disconnect between the government’s growth narrative, which boasts of impressive GDP growth, and the ground realities of low consumption growth and stagnant rural wages. He criticized the government’s much-touted schemes, such as Make in India, Stand Up India, and Skill India, for failing to yield the promised results in terms of job creation and implementation.
The economist also shed light on the widening inequality in India, with a tiny fraction of the population cornering a disproportionate share of the country’s income and assets, while the bottom 50% grapple with meager incomes and limited assets. He slammed the government’s claim of being the world’s fifth-largest economy, arguing that it does not reflect the lived experiences of the masses.
Recent data from the Centre for Monitoring Indian Economy (CMIE) reveals that the unemployment rate in India stood at 7.45% in February 2023, with urban unemployment at 7.93% and rural unemployment at 7.23%. The labor force participation rate, which measures the proportion of the population that is either working or actively seeking work, remains low at around 40%. This indicates that a significant portion of the population, particularly women, is not participating in the labor force, either due to a lack of opportunities or social and cultural barriers.
The COVID-19 pandemic has further exacerbated the unemployment crisis, with millions of people losing their jobs and livelihoods due to lockdowns and economic disruptions. While the government has announced various relief measures and stimulus packages, the effectiveness of these initiatives in creating sustainable employment opportunities remains questionable.
In the interview with The News Minute, Prabhakar concluded by emphasizing the urgent need to address the unemployment crisis, prioritizing the creation of gainful employment opportunities, fostering inclusive growth, and ensuring the well-being of Indian citizens. He called for a more transparent and accurate representation of job market data to effectively tackle the challenges faced by the Indian workforce and prevent the crisis from having severe repercussions for the government in the upcoming elections.
