Status of Unemployment in India

Context (TH): Despite the Finance Minister’s announcement of a five-scheme package to address unemployment, the job crisis in India continues to be deeply rooted and unresolved.

• Key Initiatives: One of the primary measures involves encouraging corporations to engage 1 crore interns over the next five years.

Current Situation:

• Disputed Job Creation Claims: The Reserve Bank of India’s (RBI) claim of creating 109 million jobs is under scrutiny, as data from the Periodic Labour Force Survey (PLFS) indicates only a 4% increase in the labor force since 2019-20.
• Agricultural Workforce: Nearly 46% of workers are still employed in agriculture, where incomes have remained stagnant, pointing to a lack of alternative, gainful employment opportunities.
• Rural Employment Distress: Data from the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) highlights rural distress, with 24.8 lakh new job seekers and a demand for 5.8 crore jobs in 2024-25.
• Decline in Manufacturing Jobs: The proportion of the workforce employed in manufacturing has declined from 12.6% in 2011-12 to 11.4% in 2022-23, with major job-creating sectors such as textiles, electronics, leather, and paper experiencing negative growth in industrial production.
• Government Job Aspirations: A large number of individuals are preparing for government examinations under challenging conditions (such as the Delhi flooding incident), seeing these jobs as a crucial avenue for social mobility.
• Public Sector Employment Data: According to the Ministry of Personnel, there were 22 crore job applications for government positions, but only 7.2 lakh were filled over the past eight years, leaving 30 lakh posts vacant.

Limitations of the Proposed Schemes:

• Exclusivity of the Internship Scheme: The proposed internship scheme is not inclusive, focusing only on the top 500 companies, thereby excluding micro, small, and medium enterprises (MSMEs) that might benefit more from lower-cost interns.
• Unrealistic Expectations: The expectation that each company will accommodate 4,000 interns annually is impractical, especially since most companies do not have such large permanent workforces.
• Impact of AI on Jobs: With artificial intelligence reducing the need for certain job roles, companies are unlikely to significantly expand their workforce in the near term.
• Voluntary Nature of the Scheme: The scheme’s voluntary approach, serving only as a suggestion, further diminishes its potential impact.
• Overlooked Proposals: The plan fails to consider a more inclusive Right to Apprenticeship proposal, which could enhance youth skills through practical, on-the-job training.
• Supply-Side Focus: The government’s emphasis on the supply side of employment does not address the fundamental issue of weak demand, reducing the likelihood of increased hiring by companies.