Gyan Pathak
Labour market in India is becoming more and more elusive for youth. During the last six years their participation in the total workforce in the country has dropped from 17 to 13 per cent at a time when their population increased from 26 to 28 per cent, a phenomenon that has increased mental pressure on them to an extent of going astray. Majority of them are not even engaged in education and training, and for majority of them who are it is just concealed unemployment.
Centre of Monitoring Indian Economy (CMIE) estimates from its Consumer Pyramids Household Survey (CPHS) that in 2016-17, 17 per cent of the labour force was in the 15-24 years age bracket. By 2021-22, this proportion had dropped to 13 per cent. Their labour participation rate fell during this period in spite of the share of the 15-24 years age group in the total population has increased from 26 per cent in 2016-17 to 28 per cent in 2021-22.
While explaining this phenomenon Mahesh Vyas of CMIE has said it to have happened because youngsters have delayed joining the labour market for one reason or the other. Education is one of them, which he also explained as concealed unemployment.
In 2016-17, about 15 per cent of the working-age population declared that they were students. This proportion rose at the rate of one percentage point in each of the following three years to reach 18 per cent by 2019-20. Then, in the pandemic year of 2019-20, it shot up by three percentage points to 21 per cent and then by another two percentage points to 23 per cent in 2021-22. This is a big increase in students among the working-age population.
The working-age population increased by 121 million between 2016-17 and 2021-22. During the same period, the number of students increased by 104 million. Further, the labour force shrunk by 10 million during this period.
This implies that the labour market could not absorb the additional labour that became available through the natural process of growth in population and on the contrary, it shed some of the labour that was already a part of the market, CMIE report has said, adding further “it can be inferred then that people did not continue to be students because they were attracted to higher education (or because they took longer to acquire education) but because there weren’t enough jobs for all of them to take up. Students are, therefore, turning out to be an increasing measure of disguised unemployment. This is heart-breaking.”
As the labour market is unable to absorb new labour, the composition of the workforce (those who are employed) is increasingly ageing. The CMIE data revealed that in 2016-17, a quarter of the total employment in India was of people below the age of 30. This fell to 21 per cent by 2019-20 and then to 18 per cent by 2021-22.
The proportion of the workforce in their thirties has also fallen from 25 per cent in 2016-17 to 21 per cent in 2021-22. As a result, what is left in the workforce is mostly people in their forties and fifties. In 2016-17, 42 per cent of the workforce was in their forties and fifties; by 2019-20, this had risen to 51 per cent.
Thus, more than half the workforce comprised middle-aged people when the pandemic struck India in the beginning of 2020. By 2021-22, their proportion had risen to 57 per cent. An ageing working population is not what a country that was poised to reap demographic dividends was supposed to deliver. This is also not what can help India leap forward to the growth rates it aspires for.
A related problem is that the educational qualification of the workforce is deteriorating. The share of graduates and post-graduates increased from 12.9 per cent in 2017-18 to 13.4 per cent by 2018-19. Then it fell to 13.2 per cent in 2019-20 and then to 11.8 per cent in 2020-21. It recovered but only partially to 12.2 per cent in 2021-22. This sudden fall in graduates among the employed and the incomplete recovery does not bode well for India’s competitiveness.
India’s workforce comprises mostly people whose maximum educational qualification is secondary education (those who cleared their 10th 12th examinations). They accounted for 28 per cent of the workforce in 2016-17 and in 2021-22, their share went up to 38 per cent. There is a similar increase in people whose maximum education was between 6th and 9th standards. Their share went up from 18 per cent in 2016-17 to 29 per cent in 2021-22. It is odd that while the number of students has been increasing, the number of better qualified people in the workforce has not, the report laments.
India’s labour force is getting increasingly  older and also less educated is definitely an ominous sign for the country. Modi government must focus on providing employment to our youth in absence of which they are falling prey to a range of evils threatening not only their personal well being but also our societies and the nation.(IPA Service)