By Gyan Pathak
Unemployment rate in India has been rising this month. As on July 21, unemployment rate on the basis of 30 days moving average rose to 8.4 per cent which is over 0.4 per cent more than the last month, according to the latest CMIE data, which indicates that the month of July may end with employment rate higher than 8.4 per cent. Graduates are now most worried lot with unemployment rate is over the double the national average for all unemployed people.
On the basis of a CMIE survey of pan-India household, a study by Natasha Somayya K has estimated that the unemployment rate among graduates was at 16.95 per cent in the quarter ending on June 30, 2023 which was more than double the average unemployment rate of 8.16 per cent. Despite high labour participation among graduates, the share of people who were able to secure employment is not very impressive. The starkly higher-than-average graduate unemployment rate is concerning, the study warned.
The CMIE data has revealed that in the first quarter of the financial year 2023-24 (April-June) the workforce was dominated by poorly educated people. Among all employed, 47.6 per cent of the workforce in India were educated upto only 9th standard, followed by 39.6 per cent 10th-12th standard and only 12.8 per cent graduates and above.
India must be concerned on such a trend in the labour market, at a time when inflation has been rising again since April 2023 which is likely to cross 5 per cent in July. Food inflation and spiralling food prices have made the cost-of-living crisis even bitter for majority of unemployed workforce. Moreover, the lack of any social security coverage has exacerbated their already miserable condition.
Incidentally, the G20 Labour and Employment Ministers had been meeting on July 20-21 in Indore, which was hosted by India, under its G20 presidency for the current year to focus on three main topics: addressing the global skills gaps, extending social protection to platform and gig workers, and sustainable financing for national social protection system.
India suffers from all the three – there is a large skill gap, not even a single provision for social security coverage for about 76 per cent of the workforce, and there is little funding for the national social protection system.
India had called for the ministerial purportedly to accelerate progress on the three issue – addressing skills gaps, extending social protection, and sustainable funding for it, and the good news is that Ministers of the G20 nations have agreed on specific policy priorities on the first two of these challenges and only a set of policy options regarding the third. However, it would means social protection would continue to suffer due to lack of funds in the near future.
“At present, the global employment divide is deepening in the face of global shocks and risks, with low-income countries being left further and further behind,” said the ILO Director-General, Gilbert F. Houngbo to the assembled Ministers at the Indore meet.
Given the skills gap in India, the high rate of unemployment among the educated, both due to lack of sufficient jobs and poor schooling as well as the mediocre quality of education on offer at most colleges, India must take seriously some of the recommendations made at the G20 Ministerial. It is important since employability rate of college students have less than 50 per cent, and for arts and commerce it is less than 30 per cent. A UNICEF report had said that nearly half of all undergraduate students, which are 80 per cent of all college students, study in the least employable disciplines.
“Regions where skills gaps are pervasive are also more likely to experience high unemployment”, said Richard Samans, the ILO’s Sherpa to the G20 and Director of the ILO Research Department. “In a turbulent time, ‘investment in people’ restores the trust in institutions and helps build a new social contract. Therefore, massive investment in skills is needed more than ever, as we face the need to achieve socially just green and digital transitions,” he added.
But to make further progress, and to tackle gender inequality in particular, action must focus on promoting more and better employment for the youth by investing in economic sectors with high youth employment potential and improving the quality of employment to provide incentives for labour market participation, underlined the ILO Director-General. Investments in Technical and Vocational Education and Training (TVET) and quality apprenticeships and combining active labour market policies with income support are also very important to reach the most disadvantaged youth, he added.
The ILO has called for a common language on skills and qualifications to facilitate cross-country comparability and mutual recognition of skills. The ILO, with the OECD, will launch a feasibility study for a global skills taxonomy that will be available by the end of 2026.
India must work hard on the ground, since the big words are of no worth for the unemployed youth, both male and female, if they are not getting jobopportunities. Skill and education level of our workforce must be made relevant and upgrades in the present context of fast changing world of work.(IPA Service)
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