The grim reality of the (non-)choices before the educated unemployed

The lyrics of a song sung by Asha Bhosle in the 1958 film Malik went ‘Padhoge likhoge banoge nawab/ Jo kheloge koodoge hoge kharab...’. The message being conveyed to the children of a newly independent India was simple: Education was the passport to a good life.

In today’s India, however, millions of educated youth find this is no longer true. To have a good life, what you need is a good job with a good salary, and that is something they cannot find anywhere. Because—and this is the nub of it—the more educated you are, the less chance you have of getting a job. According to the Centre for Sustainable Employment at Azim Premji University, unemployment among graduates and above is three times higher than the national average.

Little wonder then that the educated unemployed are desperate. Having invested a lot of money and time in their education, the pressure to start earning is immediate. And since something is better than nothing, they apply for jobs that require fewer educational qualifications.

In 2018, the Uttar Pradesh police advertised for 62 posts for telephone messengers, whose job is to carry documents from one police station to another on a bicycle. Anyone who had passed the fifth standard was eligible. As many as 93,000 persons applied. The selection board was shocked to find that there were 50,000 graduates (including B.Tech graduates), 28,000 postgraduates (including MBAs) and 3,700 PhD scholars among them.

The same year, the Railway Recruitment Board advertised for about 63,000 ‘Level 1’ vacancies—the lowest level of posts such as gangman, gateman and porter—the eligibility for which was 10th standard. As many as 19 million applied, most of them graduates and postgraduates. In 2019, 12 of the 13 waiters selected for a Maharashtra government canteen were graduates. The minimum qualification was fourth standard. The job profile included cutting vegetables, cleaning tables, washing utensils and sweeping the floor.

Why do the well-educated hordes swoop in to snatch jobs from the less-educated? Because there are not enough jobs to go around. We are living in a paradox in which the economy is expanding but employment is shrinking. According to a joint study done by the Centre for Monitoring Indian Economy (CMIE) and the Centre for Economic Data and Analysis (CEDA), the number of people employed in the manufacturing sector plunged from 51 million to 27 million, i.e., almost 50 per cent, between 2016–17 and 2020–21.

What was worse, most of the employment shrinkage happened in labour-intensive sectors such as textiles, construction material (like tiles) and food processing. Jobs in textiles dropped from 12.6 million in 2016–17 to 5.5 million in 2020–21, and in construction material firms from 11.4 million to 4.8 million.

The experience in Western countries has been that when the economy grew, labour moved permanently from agriculture to manufacturing. In India, the opposite is true—labour from manufacturing is moving back to agriculture.

The CMIE–CEDA study found that during the four years between 2016–17 and 2020–21, the number of people employed in agriculture went up. And people employed in agriculture included not only the uneducated, but also the educated who were unable to find jobs or were laid off by the manufacturing sector.

It is clear that the Indian economy is going in the wrong direction. Instead of becoming more and more labour-intensive (more labour, fewer machines) as the economy in a country with one of the world’s largest sources of cheap labour should, it is turning more and more capital-intensive (more machines, fewer labour). Neither the UPA nor the NDA governments have done much to reverse the direction in the past two decades, possibly because the GDP was growing.

Investment in industry helped GDP to grow and schemes like ‘Make in India’ and Production-Linked Incentive (PLI) schemes are encouraging capital-intensive manufacturing. However, GDP is not everything. The race to become one of the world’s fastest-growing economies cannot really hide the worries gnawing at a country of jobless people with little hope of growth.

Nearly half of India’s population is below the age of 25. According to the Wall Street Journal, every year 12 million of them join the labour force, but only 5.5 million get jobs. According to the Periodic Labour Force Survey, youth unemployment was 25.5 per cent for the 15–29 age group in the April–June quarter of 2021. India’s young population—touted as India’s great demographic dividend—is said to be a boon. But without the economy generating employment for the youth, the boon is slowly but surely turning into a bane.

It is worrying to see that the government, instead of changing the course of manufacturing from capital-intensive to labour-intensive to generate adequate employment for the young population, has been indulging in mere tokenism.

For example, it announced in mid-2022 that it will recruit one million youth in its ministries and departments over the next one and a half years. In a country where more than 10 million persons would be seeking jobs from mid-2022 to end-2023, giving one million of them government jobs would not mitigate unemployment even during this period, leave alone the huge numbers that remain unemployed from previous years and would remain so in subsequent years.

Public employment cannot be the answer to the country’s unemployment problem, only growing and varied employment in private, non-government sectors can ensure a steady stream of jobs. Even as the profits of corporate India soar and industrialists get away with tax exemptions, waivers, write-offs and other sops, they have shown little interest in investing either to build capacity or to diversify.

They cannot be entirely blamed because we are in a vicious circle with low demand discouraging investment. Paradoxically, we are importing luxury goods for the rich but not producing goods which the less privileged would like to consume.

Here is a four-pronged strategy India must follow to effectively deal with unemployment. First, the government must reorient its policies and incentives to encourage labour-intensive industries (such as textiles, garments, leather and

footwear, food processing, wood manufacturing and furniture). In May 2023, the government announced PLI schemes for labour-intensive

sectors, which is a good step.

Second, the government must make its skilling programme Pradhan Mantri Kaushal Vikas Yojana (PMKVY) truly meaningful. Reviews have found major deficiencies in training and placement by the PMKVY.

Third, the industry must share the responsibility of skilling the workforce. Companies like Google and IBM run their own training programmes to equip employees with the skills they need. Indian industry too must do this.

Finally, there is no substitute for good public and mass education to serve as a bridge between school/college and the workplace. Courses must be aligned with careers and combined with work-based learning.

(Arun Sinha is a journalist and writer)