How Government and Private-Led Initiatives Can Overcome Unemployment

While on the surface it may seem like things are looking good for the country, one major thing still seems to be haunting the youth of India, and that is the soaring rates of unemployment. Nearly 83% of the population belongs to this demographic as per the India Employment Report 2024 jointly published by the International Labour Organisation (ILO) and the Institute of Human Development (IHD).

If you’re thinking the problem is maybe because the mass of the population is uneducated, it’s not. As per the Indian Employment report, the percentage of educated youth with at least secondary education has nearly doubled from 35.2% in 2000 to 65.7% in 2022. Despite the rising rate of enrolment in higher education, there is a concern of quality that’s persisting, leading to significant learning deficits among individuals.

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Unemployment rate

The unemployment rate was at an all-time low between the years 2000 to 2019, but it has fluctuated over the past five years, taking the impact of COVID-19.? 2020 experienced the lowest rate at 8.00%, followed by an increase to 8.003% in 2023. Subsequently, in January 2024, the unemployment rate reduced to 6.57%.

Source: Forbes

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Unemployment rate by Age split

This data is going to surprise you. Alp Consulting recently did a poll on the same. And this is what the audience had to say.

To our surprise, the stats confirmed this as true! The unemployment rate is soaring among youth in the age group of 18-24.

• 20-25: According to recent reports, the unemployment rate among Indians aged 20-24 hit 7.1% in January 2020. For young graduates under 25, the unemployment rate soared to 42% in 2023, contributing to an overall joblessness rate of 8.7%.
• 25-30: In the October-December quarter of 2023, data from the Centre for Monitoring Indian Economy (CMIE) showed that the unemployment rate for individuals aged 25-29 surged to a 14-quarter high of 14.33%, up from 13.35% in the previous quarter.

The unemployment rates of youth in rural areas are significantly high, resulting in the overall rise in youth unemployment across India, according to the CMIE data.

• 30-35: The reported unemployment rate in India for the age group 30-35 stands at 2.49%.
• 35-40: According to the provided sources, the unemployment rate in India among individuals aged 35-40 is reported to be 2.49%.

Source: Businessinsider, ies.gov, businesstoday, scroll, Indian express, financialexpress, deccanchronicle, clarrionindia, timesofindia, dge.gov

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Unemployment rate projection in India for the next 5 years

According to econometric models by Trading Economics, the projected unemployment rate in India is expected to hover around 6.90% in 2025 and 7.10% in 2026.

Source: tradingeconomics, globaldata, cmie, pib.gov, ycharts

The numbers seem daunting, and they are. But who is to blame for this? The first entity we look to point fingers at is the government. But are they the only ones responsible for this? Isn’t it also the responsibility of the corporate sector to create jobs?

The managing director of Alp Consulting, Mr. Kishore V N said “One of the biggest hurdles in employing India's youth population is a noticeable lack of their employability skills. Our universities churn out graduates in hordes who have degrees but not enough practical skills to get employed. “

He further added that there could be two possible solutions to this: first, a conscious effort by both the government and the private sectors to upskill Indian youth and make them ready for employment and second, encouraging and training the youth to go down the path of entrepreneurship”.

And while in this regard, both the government and private sectors have taken many initiatives, we still have a long way to go.

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Reasons hindering youth employment

• Lack of skills like digital literacy skills among the workforce.
• Widening?the gender gap?in the labour market, with low rates of female labour force participation.
• Persistence of social inequalities despite affirmative action and targeted policies
• Scheduled Castes and Scheduled Tribes face barriers to accessing better job opportunities.
• The persistence of social hierarchies exacerbating the employment disparity

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Latest Initiatives taken by companies for creating Employment.

Companies in India are actively engaged in initiatives to create job opportunities for the country's youth.

• One notable effort is Vision India's "Employ India Campaign," targeting the employment of 25,000 youth in 2023. Previous iterations of the campaign have seen success, with 21,000 and 22,000 rural youth finding promising careers in 2021 and 2022, respectively.
• Tata Technologies and NASSCOM contribute to youth employment through skill development. Tata's "Ready Engineer" program enhances graduate engineers' employability in tier 2 and tier 3 cities through technology courses and soft skills training.
• NASSCOM's "Resurgent Communities Program" empowers marginalized individuals with digital literacy and job-specific skills, fostering self-reliance.
• L&T Technology Services and HCL Technologies are running skill development programs to train young people in manufacturing, IT, and other fields.

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Of course, there are many more initiatives to be taken, but the efforts to upskill the young workforce have started and it is going to make a difference soon.

Source: vispl.co, thecsrjournal, crossbarriers, f6s, nestle

Recent Government initiatives aimed at bolstering youth employment opportunities

• Skill India

Aims to provide skills and enhance the employability of 40,000 youth over a period of 5 years in various sectors such as manufacturing, construction, healthcare, and retail.

• Atal Tinkering Labs

Practical skills are by far the most important and are also majorly lacking in our country’s youth. These labs are set up in schools to encourage innovation and creativity among students, to foster a culture of entrepreneurship and innovation.

• Stand-Up India

Aims to provide financial assistance to women entrepreneurs and support the creation of new job opportunities.

• Aatmanirbhar Bharat Rojgar Yojana (ABRY)

Incentivizing employers for creating new employment and restoring lost employment during the COVID-19 pandemic.

• ?National Programme for Youth and Adolescent Development (NPYAD)

Aims to provide youth with opportunities for skill development, education, and employment.

• Udaan Scheme for youth of Jammu and Kashmir

Aims to provide skills training and enhance the employability of youth in the region.

• ?Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

Aims to provide skill training and certification to youth to enhance their employability.

• Aajeevika - National Rural Livelihoods Mission (NRLM)

Creating efficient and effective institutional platforms for the rural poor to improve their livelihoods is extremely important. And this initiative aims for the same.

• Rural Self Employment and Training Institutes (RSETIs)

Provide training and upskilling of rural youth for entrepreneurship development.

• Prime Minister Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi) Scheme

Aims to provide collateral-free working capital loans to street vendors to restart their businesses. These initiatives aim to provide youth with opportunities for skill development, education, and employment, and to promote entrepreneurship and innovation among them.

Source: narendramodi, pib.gov, india.gov, timesofindia.indiatimes, linkedin

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Success stories of youth employment initiatives in India

Some regions where the employment-led initiatives have been fruitful are-

• ?NYK Anatapur: An initiative that mentors youth clubs for the training of women, contributing to skill development and empowerment.
• NYK Balaghat: The initiative has helped transform local artisans and villagers in Madhya Pradesh, providing opportunities for economic growth and employment.
• ?NYK Nizamabad for Community Women: Skill development for community women, aiming to enhance their employability and economic independence.
• ?Youth Employment Scheme Kashmir: Provides employment opportunities for youth in Kashmir, addressing the region's specific employment challenges.
• ?Miticool Mansukhbhai:? Innovative solutions like the Miticool refrigerator has created job opportunities and empowered individuals

These success stories highlight the positive impact of various youth employment initiatives in India, showcasing how these programs have contributed to skill development, job creation, and economic empowerment among the youth.

Source: nyks.nic, educationnext, narendramodi, vispl.co, linkedin

Overcoming the Challenge

With the right initiatives, India can conquer its unemployment challenge. By implementing measures and fostering job creation, we can pave the way towards greater employment opportunities and economic prosperity. Targeted policies, investment in skill development, and entrepreneurship support are some very significant factors that can help India can push through this unemployment phase. The journey towards alleviating unemployment may be complex, but with dedication, innovation, and a collaborative effort between government, industry, and society, a brighter future awaits where unemployment becomes a relic of the past.