India’s job crisis is sending the best minds abroad

Great swathes of India’s educated youth are turning their backs on their homeland to relocate to countries like Canada in search of employment. India’s joblessness rate hit a four-month high of 7.9 per cent in December 2021, having peaked at 23.5 per cent in the midst of the pandemic in April 2020, according to the Mumbai-based Centre for Monitoring Indian Economy (CMIE). 

Whilst data from CMIE and International Labour Organization rightly cite the pandemic as exacerbating India’s economic slowdown, Prime Minister Narendra Modi is also being blamed by his critics who deem unemployment to be one of his biggest failings in office. After coming to power in 2014, Modi has yet to fulfil his promise of creating millions of jobs. His electoral reivals are now trying to capitalise on this failure of statecraft ahead of elections in five states, including the populous Uttar Pradesh and Punjab. Here’s what you need to know.

What do the statistics reveal?

CMIE data reveals that between 2018 and 2021, India suffered its longest period of economic slowdown since 1991, with unemployment averaging at 7.2%, this is against a backdrop of global unemployment averaging around 5.7%. 

India is producing fewer jobs, and the country’s already low rate of workforce participation – those aged 15 and above in work or looking for it – is falling. This is prompting many disenchanted jobseekers to take on menial roles instead, or look to move overseas. “The situation is worse than what the unemployment rate shows,” CMIE Managing Director Mahesh Vyas told Reuters: “The unemployment rate only measures the proportion who do not find jobs of those who are actively seeking jobs. The problem is the proportion of those seeking jobs itself is shrinking.”

Why is this happening?

The low unemployment rate is down to a combination of delayed economic recovery from the pandemic, a slow agricultural season, and perhaps most interestingly, a surplus of labour. 

Until 2040, the proportion of working-age people in India is expected to outweigh the number of their dependents (children and older people), a demographic phenomenon economists label as the “demographic dividend.” But with the pandemic causing massive disruption, analysts believe that even if two-thirds of India’s 1.35 billion population are of working age, India is unlikely to benefit from this age advantage. 

“The economy was already slowing down severely, and now the lockdown has made everything worse,” the CMIE’s Mahesh Vyas told Al Jazeera back in July 2020. “If the young generation is not given jobs, then the demographic dividend will become a demographic demon.”

Since 2020, things have certainly taken a turn for the worse. Job creation has not kept pace with the numbers of those seeking employment, and the gap between labour absorption and labour supply is widening. In particular, it is the non-agricultural sectors – industry, construction and services – that are unable to swallow the rising amount of young people seeking employment.

According to CMIE data, in poll-bound Uttar Pradesh, the labour force has risen from 149.5 million to 170.7 million in the past five years, whilst the percentage of those employed (as a share of the working-age population) has fallen, from 38.5 per cent to 32.8 per cent during the same period. 

Why are they relocating abroad?

Youth unemployment has risen steeply in the last few years, from 115.66 per cent in 2016-17 to 28.26 per cent in 2020-21. Furthermore, securing a degree is no longer a pathway into a job – a startling 9 million of 55 million graduate degree holders were unemployed in 2019. Whilst a jobseeker may have all the academic trimmings to apply for a good job, he will often find the only option is to get a low-skilled job that pays significantly less.

“There are no openings anywhere,” says Satveer Singh, a resident of Rajo Majra villiage in Pujab’s Sanghur district. Despite having a Bachelor’s degree in education, two Master’s degrees and a Diploma in computer science, he still has no job. “I have a debt of Rs 4 lakh and am currently running the house on the paltry sum I earn by offering private tuitions,” he told The Print.

Singh is far from alone. Srijan Upadhyay, a 31-year-old IT graduate, expressed his frustration to Reuters and explained that lockdown had crippled his business. He has since travelled to Rajpura town in Punjab to meet with consultants that promised him a work visa in Canada. “There are not enough jobs for us here, and whenever government vacancies come up, we hear of cheating, leaking of test papers,” Upadhyay said. “I am sure we will get a job in Canada, whatever it is initially.”

“Because of a lack of employment opportunities here, every kid looks at Canada. Parents hope to somehow send their kids there,” Delhi Chief Minister Arvind Kejriwal, whose Aam Admi Party is a front-runner in Punjab elections, explained at a recent public function. “I assure you, within five years, they will start returning because we will create so many opportunities for them here.”

What can be done about it? 

“India needs to create 90 million non-farm jobs between 2030 and 2030, to ensure our demographic surplus is absorbed,” writes Feroze Varun Gandhi in The Indian Express. “Only a decade ago, policymakers expected India to be the world’s back office, with our people gainfully employed. Now, we hope that the gig economy, fostered by new-age start-ups, can achieve this.”

“We need to help up-skill the existing labour force, particularly in urban India. A national urban employment scheme, with a focus on creating public assets, would help improve skill sets, provide certification and give income support. The state of Indian cities continues to be poor – with significant rehabilitation and expansion of public works required. Such a scheme could help.”

Echoing Gandhi’s sentiments, CMIE’s Mahesh Vyas also believes that to stop “the great relocation” and encourage highly-educated workers to return, India needs to ramp up investment in labour-intensive industries and find more ways to attract women into the labour force. 

Without greater governmental proactivity, the “demographic demon” could just start to scythe its way through an economy that could otherwise thrive off a new legion of industrious jobseekers.