Unemployment of Indian Youth; an Increasing Concern

For the past decade, the percentage of unemployed youth in the country has been revolving around the 10% mark. Although this appears to be a small fraction, in reality, it greatly affects the economic growth of the country. Here is a brief report on the unemployment amidst Indian Youth.

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For the past decade, the percentage of unemployed youth in the country has been revolving around the 10% mark. Although this appears to be a small fraction, in reality, it greatly affects the economic growth of the country. Here is a brief report on the unemployment amidst Indian Youth.

Unemployment of Indian Youth; an Increasing Concern. the policy times

Youth unemployment rate is defined as the number of people in the workforce who are aged between 15-24 years and without a job but, actively seeking one. According to the World Bank, the current youth unemployment rate in India, at 10.51%, is significantly higher than the country’s national unemployment rate which is 2.55%.

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There are various reasons for an increase in a country’s unemployment rate, which varies from country to country. In India, a few reasons that have a massive impact on the rates are;


  • India’s Unemployment Rate Dipped Marginally to 5.8% in FY2018-19, Next Survey’s Numbers may Reflect the Pandemic Shock
  • Bad news for Modi as India’s unemployment at worst in 29 months    

  • Lack of graduate jobs- Young people leave colleges with a degree but then find out that the actual number of graduate jobs is very less. Some find themselves over-qualified for the jobs that are available. Due to this situation, there is a lack of opportunities for people to learn new skills. Hence, they lack the proper skills for a long period of time.
  • Frictional Unemployment-School drop-outs or pass-outs find it rather difficult to find the right work for them.
  • Rural Unemployment-The rate of unemployment in rural areas is much higher because of the lack of proper resources, education, and jobs. This leads to young people moving out of these areas to the urban areas in search of a better standard of living and hence, these rural areas remain undeveloped.
  • Black Economy-Unemployed youth in India often turn to the underground economy looking for unofficial jobs. These jobs most of the time, maybe illegal like drug dealing, etc.
  • Hysteresis-Hysteresis is the idea that the recent trends in unemployment are likely to cause future unemployment. This may cause the youth to be de-motivated, companies to be unwilling to hire in the first place, etc.
  • Natural Calamities and Diseases- natural calamities, epidemics, and pandemics affect the unemployment rates greatly. According to the CMIE(Centre for Monitoring Indian Economy),  the recent outbreak of the global pandemic COVID-19 in India and the following

nationwide lockdown to control the spread of the virus resulted in 27 million youth in the age group of 20-30 years to lose their jobs in the month of April.

  • It is important to note that unlike other countries, the educated youth in India face a higher risk of unemployment than the low educated.
  • All of these reasons are in one or the other way, linked to the inefficiency of the Government and its Policies to generate jobs.

Unemployment greatly affects the living standards of people and the economy of the country.

Unemployed youth earn low wages for a long period of time because of limited working experience and the missed opportunities to develop skills. This leads to reduced future earnings and in-turn leads to the lower purchasing power of individuals causing increased debt and inability to save for retirement. This has a great negative impact on the country’s economy.

The falling in goods consumption leads to slower economic growth which leads to less job generation and greater taxpayer burden.

Economists have provided various solutions to this conundrum. Few of which are;

  1. Decentralization of industrial activities- For people of every region to get employment
  2. Development of rural areas- To stop the migration of rural population to urban areas to decrease pressure on urban area jobs.
  3. Govt. assistance to self-employed people- The self-employed people get aids and help from the government to expand their businesses.
  4. Emphasis on Production of Skilled Individuals- One of the main reasons for unemployment is the insufficient number of skilled individuals being produced in academic institutions. If this problem is dealt with properly, by emphasizing the learning of multiple skills for individuals, it would be an effective policy solution for the unemployment problem in our beloved nation.

The only question leaving behind, Is the government ready to help the Youth of India?

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Unemployment of Indian Youth; an Increasing Concern
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For the past decade, the percentage of unemployed youth in the country has been revolving around the 10% mark. Although this appears to be a small fraction, in reality, it greatly affects the economic growth of the country. Here is a brief report on the unemployment amidst Indian Youth.
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THE POLICY TIMES
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