INDIA: Unemployed India strikes its highest with 5%

By SHRM India Content Team Jun 12, 2017

The unemployed are always a concern for the economy. In a country like India which has a staggering population of 1.33 billion, a higher unemployment percentage means a riskier, unstable future.  In a survey conducted by the Labour Bureau, it has been seen that unemployment rate has touched 5% in 2015-16, the highest in the last 5 years. That means, a significant chunk of the population, about 2.3 Crore people are jobless.

Unemployment among women was found to be higher at 8.7% as against 4.3% for men. In the all-India level survey under the usual principal status (UPS) approach, it has also come to light that 77% of the households reported not to have a regular wage earner or salaried person. The rural-urban divide with regards to unemployment is not that pronounced with the rural sector sitting on a score of 5.1% and the urban sector on a rate of 4.9%. Unemployment among urban females struck 12.1% compared to 3.3% in males and 10.3% in transgenders. States and union territories at the top of the list include Tripura (19.7%) followed by Sikkim (18.1%), Lakshadweep (16.1%), Andaman and Nicobar islands (12.7%), Kerala (12.5%) and Himachal Pradesh (10.6%).

While we are reportedly having a better performing economy, the same has not translated into jobs. An earlier report held that 80% of engineering graduates are unemployable. The significance of that rises with the fact that engineering colleges produce about 600,000 graduates every year. Given this scenario, IT companies have started hiring from Tier III cities. Delhi has been found to have the highest percentage of employable engineers followed by Bengaluru. In the top 25% of most employable states feature percentile, while Punjab and Uttarakhand have dropped to the 2nd and 3rd places respectively.

Majority of the country being involved in agriculture, there's significant unemployment in the sector as it is majorly season driven. Low-skill jobs are also being replaced by technology, reducing its demand. While technologies such as artificial intelligence are a necessity, they are helping replace jobs with machines which take up lesser time and money. The other factor being unemployable is the immobility of labour force. People are unwilling to relocate to other regions because of the diverse culture, language, religion and climate that persists in the country.

A projection by is below:

Unemployment Rate4.

Considering the rate at unemployment is growing, here's a projection by tradingeconomics for up to 2020.

India LabourLastQ4/16Q1/17Q2/17Q3/172020
Unemployment Rate4.
Employed Persons296503024030312303853045732200
Unemployed Persons44.7947.3447.7748.248.6355.96
Labor Force Participation Rate52.551.1251.4651.7952.1355.32
Retirement Age Women606060606060
Retirement Age Men606060606060
Living Wage Family322003230033100332003340038000
Living Wage Individual125001340013800142001450020000
Wages High Skilled503005120052000525005310087500
Wages In Manufacturing347362370378382425
Wages Low Skilled119001300013500140001460018000
Youth Unemployment Rate12.915.515.515.515.513.5

From now to 2050, India will need to have generated 280 million jobs if the working age population is to be engaged.

Even the organised sector that has been offering up to 10% employment is seeing a slow down for the first time since the global financial crisis of 2015. Jobs in the unorganised sector is set to rise to 93% in 2017. However, these may be contractual or temporary leading to unsteady monthly earnings. Under-employment is the big possibility here. A statement from the RBI quarterly industrial outlook report points to out that "exports, imports, employments, profit margin and overall business situation has deteriorated."

One of the best solutions to these tough times is for job seekers to turn job creators. Even with schemes such as MGNREGA, Prime Minister's Employment Generation Programme and Swarnajayanti Gram Swarojgar Yojna, only about 24% of households could be impacted with employment. With initiatives like Make In India and Startup  India, a wave a entrepreneurship has begun. However, the real change is yet to be seen. Real change can happen only when then there will be more job creators in the ring than job seekers. This change in equation will take time and effort.


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