New Delhi, May 28: Youth unemployment in India is climbing sharply, a development that risks undermining the new darling of the world economy at the very moment it was expected to really take off, local media reported.
In contrast to China, where economists fear there won’t be enough workers to support the growing number of elderly, in India, the concern is there aren’t enough jobs to support the growing number of workers, CNN reported.
While people under the age of 25 account for more than 40 per cent of India’s population, almost half of them – 45.8 per cent – were unemployed as of December 2022, according to the Centre for Monitoring Indian Economy (CMIE), an independent think tank headquartered in Mumbai, which publishes job data more regularly than the Indian government.
Some analysts have described the situation to CNN as a “time bomb”, warning of the potential for social unrest unless more employment can be created.
Experts warn the problem will only get worse as the population grows and competition for jobs gets even tougher.
Kaushik Basu, an economics professor at Cornell University and former chief economic adviser for the Indian government, described India’s youth unemployment rate as “shockingly high”, CNN reported.
It’s been “climbing slowly for a long time, say for about 15 years it’s been on a slow climb but over the past seven, eight years it’s been a sharp climb,” he said.
“If that category of people do not find enough employment,” Basu added, “then what was meant to be an opportunity, the bulge in that demographic dividend, could become a huge challenge and problem for India,” CNN reported.
Economists say India has various options to address these demographic problems – among them, developing an already globally competitive and labour-intensive manufacturing sector, which accounted for less than 15 per cent of employment in 2021, according to Capital Economics.