Data Analysis Report on the Issue of Youth Unemployment in India

Abstract

This report deals in depth with the 'problem' of youth unemployment and examines the different policy responses to it, including education and training and active labor market policies. This report depicts problem of youth unemployment as a serious concern to our country. It emphasizes the need for adequate labor market information, policy monitoring and program evaluation to help provide young people with more and better quality jobs, while also providing specific recommendations and guidance for this age group in industrialized, transition and developing countries. While analyzing the characteristics, causes and consequences of youth unemployment, the study examines the nature of the labor market for youth and how it differs for other workers from the labor market.

Introduction

Unemployment in India is a major social problem since 1960. Unemployment can be defined as a state where an individual who is fit and willing to work is not able to find a job. There are different types of employment:

1. Voluntary unemployment - the unemployment in which an individual attains the state of unemployment because of his desire of not willing to work.
2. Involuntary unemployment.

• Casual unemployment – The type of unemployment that is caused when an individual is offered temporary employment and they are terminated after their demand abates is called casual unemployment.
• Frictional unemployment – Frictional unemployment is generated when an individual is transitioning between jobs or searching for a job that best suits his skill set.
• Seasonal unemployment – Seasonal unemployment is caused when people are unemployed at certain times of the year.
• Structural unemployment – Unemployment that is caused due to any structural changes like industrial reorganization, technological changes etc., is called structural unemployment.
• Technological unemployment – This type of unemployment is created with the advancement of technological mechanization which makes manual labour unnecessary.
• Cyclical unemployment – Cyclical unemployment is related to the cyclical trends of business growth. Unemployment is created when the growth of the business cycle is low.
• Disguised unemployment – Unemployment where more than required number of individuals are employed in a job or organization is called disguised unemployment.
• Educated unemployment – unemployment where individuals with high and advanced skills are unable to find a job that matches their training is called educated unemployment.

Unemployment is generally measure in terms of percentage - the number of individuals with no job to the total labour force in a country or a certain group. According to Fifth Annual Employment - Unemployment survey (2018-2019), Gujarat has lowest unemployment rate of 1.2% among the Indian states. Next to Gujarat is Karnataka, Chhattisgarh, Maharashtra, Telangana etc., Tripura has the highest unemployment rate. 4.9% is the current unemployment rate of India.

According to the constitution of India, the duty of providing employment opportunities to an individual lie within the state. The Government of India incorporated activities in Five-year plan (1950-1951) to provide employment opportunities. Later after few years, the government of India developed some schemes and policies like NREGA, PMKVY, Deen Dayal Antyodaya Yojana (DAY- NRLM- NULM), MKSP etc., that helps in offering employment opportunities to a specified group of people or any individual in our country.

These schemes and policies haven’t been implemented effectively since many reasons influence unemployment in India. Some of the reasons are - rapid population growth, global competition, inadequate employment planning, illiteracy and defective education etc. Unemployment rate in India is high since these reasons influence effectively. Unemployment effects the Indian economy in many ways. Some effects on Indian economy are – slowdown of country’s growth, low production, reduction in tax collection, reduction in per capita income etc. Some of the solutions to reduce unemployment rate in India are – rapid industrialization, encouraging self- employment, population growth control, revival of cottage and small-scale industries etc. These solutions may help in lessening the unemployment rate.

Literature Review

The tenacity of unemployment or joblessness is one of the most serious economic risks that scares us. Some consider unemployment to be an incredible risk to the society. Unemployment is a worldwide and an unpreventable problem for all humankind. This problem is to a great extent due, in exceedingly industrialized countries, to a fundamental rebuilding of industry and the impacts of slower financial development countries. There is the issue of school dropouts. Measurably the school dropout has the most noteworthy rate of joblessness. In any case, it isn't right to expect that the issue is that dropped out of school and the solution is that they have remained in school. The gap between rich and poor is increasing drastically. As came into notice that most of them has improved their country’s economy (developed countries) through modern ways such as public funding, privatization as well as restricting the cash flow in the hands of few and globalization. Also, the total women labour force is estimated about 27% whereas back it was just 19%.

Unemployment, as characterized by Kimberly Amadeo is the origin which give data about the statistics of individuals who are right now unemployed and are searching for it. The current worldwide unemployment rate is 5.5% which has dropped from a year ago of 5.6%. Yet, the condition for these unemployment rate will increase drastically as the population will increase of country. Right now unemployment in our country (India) is 3.52% which implies that about 31 million residents people (Indian) are jobless. Just not the unemployment rates but rather even the conditions adding to these have likewise expanded a few number of jobs being delivered to the talented specialists present in the market. (Service, 2018)

Dr. Veni Nair, Assistant Director of ITM Business School expresses his views that as indicated by world bank report Indian unemployment will increment from quickly and envisioning a developing India with such an enormous unemployment number is frightening. The elements contributing for such enormous issues are increasing population without proper education system framework and unskilled labours and so on. The most frightful thing is that our country is having the biggest population of youth on the planet yet with this joblessness war it might result in most exceedingly worst condition of the outcome anticipating. The administration center of our country is focusing on around good quality education is just very noteworthy or impressive yet simply concentrating on a several sections won't help in diminishing such huge issue. Additionally, they have to concentrate on dispersion of industrialization similarly all through locale with the goal that youth or people doesn't need to turn out for jobs. The primary source which a nation need to battle the unemployment is empowering people for small and large scale business and expressing their own business with new and creative ideas. What's more, nation should always support this as this helps well dispersion of riches, innovation and Technology. Likewise guarantees great legitimate number of employment to all the jobless young people just as spine for the economy. About 65% of the nation’s population is under 35 age which implies the work power accessible is very more and one nation need to get profits by this. (Tandon, 2018) (Nair, 2017)

Quick development of the Indian economy may have profound impacts in certain territories yet in the area of unemployment it has battled a lot as referenced by Bengaluru based Azim Premji University. As the GDP of our country has been risen, but the difference between the development and unemployment of the general public or people have been raised. Based on the information in 1980s the GDP development of our country was estimated to be 3-4% with the employment of people increment by 2% consistently. However, with the progression of time and advancement of economy the proportion of the GDP to the work has been ceaselessly draining and even came to 0.1 % which is by all accounts disturbing stage for the entire nation. Anyhow, there is a lot of greater commitment for such threat in India the high paying employments have expanded and just as presence of unequal pay between gender. By understanding the distinctive lacking area with possibility of ability to change so they may help in controlling the quick augmentation of the joblessness. By adjusting new changes and presenting new example just as supporting the creating ideas and thoughts would assist any country with reaching its statures in any sector. (Service, 2018).

The rate of unemployment will not be reduced until there are changes in the economic and social policies of the countries involved.

Methodology

The definition of ‘youth’ differs in different socio-cultural contexts and their age has a big part in getting some conclusions after analyzing the data. This means our nation has a different age range for different definitions of ‘youth’, and from common sense, we can safely assume that youth is the period between a person’s childhood and adulthood though, in reality, this period varies very much between societies. This age range of ‘youth’ is in between ten to thirty-five years as different national organizations measure and define ‘youth’ differently. The government of our nation has officially defined thirteen to thirty-five years old as the age range of a ‘youth’. But still, this varies from program to program. The National Youth Policy of India (N.Y.P.) categorizes ten to thirty years old as a youth. The International Labour Organization (I.L.O.) and the United Nations (U.N.) takes the age group of youth from fifteen to twenty-four years old. We took the data of the same age range roughly around the ages mentioned above and attempted to compare it.

National Sample Survey Organization is the source of the data we used to make interpretations in this project. Various trends of Level of Unemployment, Worker Population Rate, Labour Force Participation Rate are chosen as the primary aspects used to analyze the data and from the observations found, we tried to interpret the reasons for these trends. Finally, conclusions are drawn on unemployment reasons and solutions. (Venkatanarayana, 2011, p. 3)

Data Analysis

Labor force participation rate:

The labor participation rate is the total number of people who are employed and the people who are looking for employment. The people who are aged above 64, homemakers, pursuing studies are not considered in the labor force. India is the seventh largest country in the world and the second largest nation in size of the labor force. The labor force participation rate In India December 2017 was 52%, but gradually the labor force participation rate in December 2018 has significantly dropped to 51.9%. The highest rate was in December 1990s with an all-time high of 58.6%. Ironically, the labor force participation rate reached the lowest in December 2018 with 51.9%.

Statistics show the decrease in the labor force participation rate in 1990’s. This is mainly due to the introduction of educational institutes. Even if we look at the gender comparison or economic background, it is clear that the labor force participation rate is higher in rural areas when compared to urban areas. In the case of gender, the females are facing a higher unemployment rate than men. It is observed there is no periodicity in the trend of male, female, urban and rural areas.

Level of Unemployment:

India is the second most populated country in the world with 1.3 billion people and unemployment has been a major issue with rising population. With 6.1% as the unemployment rate, India has reached its highest jobless rate in the last 45 years. Even though the government has introduced various policies and schemes, it has failed to overcome the problem of unemployment.

The assessment by the national sample survey can be classified into primarily into three stages usual status, current weekly status and current daily status. The first stage of people represents the total no of people who are employed for a long range of time and hence this thing represents chronicle unemployment. Intermittent unemployment can be represented using the present weekly status. The average picture of the unemployment is usually reflected by the daily state unemployment.

The age group clearly shows that the unemployment is usually higher in the age group from 15 to 25 years. So, we can conclude that it has become very difficult for the young people to get a job when compared to the people who are aged above 28.

Uniform Basic Income of India (UBI):

The Government of India is looking for new ways to address the distress of our farmers who constitute 60% of our population by providing them minimum income which could fulfil their daily needs. India’s Chief Economic Advisor, Dr. Arvind Subramanian proposed it as a solution to the poverty problem in the country. A chapter was dedicated to it in the Economic Survey 2016-17 and presented in early 2017 in front of the Indian Parliament. Based on the poverty line formula by economist Suresh Tendulkar, the UBI for 2016-17 was at Rs 7620. It was estimated that UBI will cost 4.9% of the country’s GDP compared to the 5.2% of GDP used in 950 central sectors and the other centrally sub-sponsored schemes. Arvind Subramanian also proposed a Quasi UBI (QUBI) which targets demographic groups like women citizens instead of a nationwide UBI which can cause commotion in taxpayers.

There are many positive aspects of UBI like reducing poverty, decreasing distress of farmers, tackle underemployment, development of skills, empowering women, boost for micro, small and medium enterprises in our country. But we should also look at the negative aspects of this scheme which are income disparity, decrease in taxable income, increase in the cost of labor, inadequate cash transfers, commotion in economically better sections as their taxes are being used for something which is not benefiting them.

Conclusion

For any economy, unemployment is a serious problem. It creates negative effects for the unemployed as they are unemployed and suffer from worse prospects of finding new jobs, and those who are employed feel less secure in the future to maintain their jobs. However, steps must be taken to increase productivity and improve living standards for the overall development of the economy, government and individuals. Even the government has proposed and started programs such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Mission Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Ministry of Micro, small and medium enterprises (MSME) and National Skill Development to increase the employment rate has improved to better conditions providing quality education and improvement, engaging workforce policies etc.

Reflection

We have been exposed to various socio-economic problems that cause unemployment during the course of this project. While the main root of this work is unemployment, we also have an insight into the Indian economy, which we have hardly no idea about it earlier. It was a wonderful experience studying one of our country's and world’s serious contemporary challenges. This project on unemployment has made us learn many new information regarding the contemporary challenges in the world and made us to explore widely from the roots and brought us knowledge on how the world is facing the problem and effects of this problem. We thank our instructor for giving opportunity to attain knowledge on today’s contemporary challenges.