Growing unemployment is posing a serious challenge to India’s economic recovery. While the economy is now back on the growth path, the scenario in the job market is far from optimum. As per figures, unemployment soared to 7.91 per cent in December, 2021, which was 6.3 per cent in the beginning of the said year. Between 2019 and December 2021, the manufacturing sector has lost 9.3 per cent of jobs. It depicts a grim picture for the Indian industry sector as the onus of creating jobs mainly lies on manufacturing and the service sector. Whilst the service sector is performing creditably and contributing more than 50 per cent of Indian GDP, the manufacturing sector is lagging behind. Thus to prevent jobless growth, the manufacturing sector needs to start contributing more substantially to the economy. Many economists have blamed the Covid-19 pandemic for the fall in jobs in the country, whilst others argue that the job market in India started to shrink well before the outbreak of the pandemic. Whatever may be the reason, the need of the hour is to create as many jobs as early as possible to abate worries on the progress of the country’s economic recovery. Hopefully, in her forthcoming budget speech, Union Finance Minister Nirmala Sitharaman will outline a plan to create more jobs in-order to prevent the situation from becoming more grim. Any delay in addressing the problem will be a major blow to the country’s economy and will make the already challenging task of finding jobs more difficult for India’s upcoming workforce.
But the government alone will not be able to solve the unemployment problem. It requires the help from the private sector too. While the government is duty-bound to invest in the infrastructure sector, private investments should be made with an eye on job creation. Quite strangely in India, private investments have gone down considerably over the years despite the olive branch provided by the government. At present private investments have gone down to 27 per cent from 34.3 per cent. The downward trend became evident since 2011. Clearly, the shrinking job scenario has contributed largely to growing inequalities in the country. So to get rid of the alarming situation, investments by private parties are necessary, especially in fields which can potentially generate more jobs. It is time now to inform the private sector in no uncertain terms that it should not be driven by profitability only. It should share the burden of social responsibilities along with the government. Otherwise, the government may think of withdrawing the benefits given to the private sector including tax rebates. At the same time, medium and small scale industries should also be encouraged as the sector too generates substantial employment. Experts have highlighted that there is a higher number of unemployed youths in urban areas as small and medium industries are bogged down by many obstacles at present and are not in a position to employ as many people as it previously engaged. So, the writing on the wall is clear. A well rounded action plan is required to tackle the unemployment problem at the earliest in-order to ensure equitable economic development.