By Kirthi Iyer

The critical challenge that India is facing today is youth unemployment. As the world’s largest democracy with a young population, the country is experiencing a growing crisis in youth unemployment. This article explains why there is a need to fix the problem of youth unemployment, how it has impacted on the Indian economy, and wider social problems it causes, such as increased violence and community tensions. 

Understanding Youth Unemployment in India

Youth unemployment is when young people, aged 15-24 years, are unable find work despite their active search for employment. In India, this has been further complicated with rapid population increase, educational and industrial mismatch, and an absolute shortage of adequate job opportunities. According to the Centre for Monitoring Indian Economy’s data, India’s young job seekers without work rate touched a worrying 45.4 percent among the highest in the world.

Impact of Youth Unemployment on the Indian Economy

Youth employment issues has significant repercussions for the Indian economy. When a substantial portion of the youth population remains unemployed, it leads to a waste of potential human resources. This inefficiency can slow economic growth, as the youth are often the driving force behind innovation and productivity.

Reduced Economic Output 

Unemployed youth cannot contribute to the economy as effectively as employed individuals.  This failure to exploit potential optimally was generated by the reduced overall output in the economy and a lack of progress in the country. When any significant portion of the population stays idle, not only does the nation produce less but also there is limited scope for productivity, which could have otherwise been possible through the different economic activities.

Increased Dependency Ratios

 High youth employment gap rates increase the dependency ratio, with few working age individuals supporting a large population of dependants. This creates a bigger strain on social welfare systems and restricts the development of the economy. With an increased dependency ratio, much pressure is on the working population to support the unemployed, leading the burden of higher taxes and reduced disposable income for households.

Brain Drain

Persistent unemployment will result in a brain drain, with the best young talent emigrating to other countries in search of better jobs. This not only drains the pool of talented manpower from the Indian economy but also impinges on the global competitiveness of the country. A country that loses a sizable portion of its human resource through the brain drain is usually unable to match up in technological up-gradation and innovativeness, which in turn impacts economic growth.

The 2024 Budget: A Glimpse into the Government’s Approach

The Indian government’s 2024 Budget acknowledges the critical nature of underemployment of youth and outlines various measures to address it. Key aspects of the budget related to this include:

1. Skill Development Programs

 For aligning outcomes of education with industry requirements, funds have been provided in the budget for building skill development programs. This will enable the youth to gain relevant skills and improve their employability. In order to implement this, there will be a greater role for the National Skill Development Corporation, working with vocational training and certification courses.

2. Support for Start-ups and SMEs

 To create new job opportunities, the budget includes provisions for supporting start ups and small and medium-sized enterprises (SMEs). These sectors are often significant sources of employment for young people. The Startup India Initiative provides funding, mentorship, and resources to help young entrepreneurs establish and grow their businesses, thereby generating employment.

3. Infrastructure Development

This investment is most likely to create jobs in the construction and associated sectors, especially those dealing with urban development, transportation, and other such initiatives. Infrastructure projects not only provide immediate employment but also offer long-term economic gains by improving connectivity and productivity.

4. Educational Reforms

The budget has, laid emphasis on reforms in the educational sector to tackle the mismatch between educational qualifications and job market requirements. This will involve updating of curriculum and the introduction of vocational training programs. In this manner, educational reforms will bridge the gap between theoretical knowledge and practical skills and make the graduates job-ready.

5. Digital Economy Initiatives

The budget also highlights the importance of technology and digitization into the system of education. Improving digital literacy and having an online learning platform is important for the government in setting it’s youth on the path towards meeting the aspirations of the future job market, which currently depends on digital competencies.

What Improvements Can Be Made to Budget 2024 for Addressing Youth Unemployment

Comprehensive Education Reform

  • The budget must undertake a much more fundamental reform in education, which is more in tune with the requirement of the job market.
  • Includes teacher training, and infrastructure development in the educational sector.
  • Emphasis on promoting STEM education to prepare students for future job opportunities.

Greater Focus on Rural Employment

  • More allocation should be made for creating employments in rural areas.
  • Investments in agriculture, rural industries, and infrastructure development are essential.
  • Reduced migration to urban cities and balanced regional development.

Long-term Job Creation Strategies

  • The Budget has been oriented toward short-term measures and has lacked provision for any long-term strategies aimed at generating sustainable jobs
  • Investments in emerging industries, research and development, and innovation are crucial.
  • There is a continuous need for monitoring and evaluation of employment programs so as to adjust to the changing economic circumstances. By filling these gaps, the budget can do much more about the crisis in youth employment gap and create a hopeful future for its youth. 

Social Consequences of Youth Unemployment 

growth of india's economy

Unemployment among young people affects more than just the economy; it also has serious social impacts:

  1. Increased Violence: High unemployment can increase the level of crimes since people may be involved in criminal activities for money, out of desperation.
  2. Communal Distress: Economic problems can worsen social tensions. Limited job opportunities cause competition for resources, increasing friction and divisions between groups.
  3. Mental Health Issues: Ongoing unemployment can harm mental health, leading to anxiety and depression. This not only affects individuals but also increases healthcare costs and reduces productivity.
  4. Social Exclusion: Unemployed youth may feel alienated and disempowered, leading to anti-social behaviour. This hampers efforts to build a cohesive society where everyone feels valued.
  5. Impact on Family Dynamics: Unemployment can strain family relationships, increasing stress and conflicts due to financial and emotional burdens. Families often struggle to support unemployed members, adding more psychological pressure.

Addressing the Crisis: What Can Be Done?

To effectively address the job scarcity for youth, a multifaceted approach is required. Here are some strategies that can help mitigate the issue:

  1. Enhancing Education and Training: It can make youth better equipped to enter into the job market by refocusing goals of the education system towards practical skills and trainings. The educational institutes, in partnership with the industries, could ensure that the graduates have relevant skills. Of course, for that, some innovative curriculum change would be required, but also some practical training through internships, apprenticeships, and so on. For example, linking up with industry would give university students experiential learning, making them employable.
  2. Promoting Entrepreneurship: If, the youth are stimulated to start up ventures of their own, it could generate new job opportunities and thereby fuel economic growth. These young aspiring entrepreneurs should have access to funding, mentorship, and resources for this purpose. The Startup India Initiative is a step toward this and offers incentives and support to young entrepreneurs. Initiatives like incubation centres and start-up competitions can also foster an entrepreneurial culture among the youth.
  3. Strengthening Labour Market Policies: Some policies that have the potential to encourage job creation can include incentives to business firms for hiring young workers, would bring down unemployment rates.  Improvement in job matching services and career guidance can also be done by assisting the young individual to find suitable employment. Labour market policies must orient towards provisions for unemployment benefits and support to job seekers.
  4. Fostering Public-Private Partnerships: Collaborations between government and its partners in the private sector are a good opportunity to create innovative opportunities for jobs. Public-private partnerships can develop new industries and sectors that create employment opportunities for the youth. The uptake of technology in such partnerships is crucial; technology transfers solutions and skills  enhances the overall skill level of the workforce.
  5. Improving Social Safety Nets: A mitigating approach to these negative effects can be brought about by extending social safety nets and support for unemployed youth, such as access to unemployment benefits, mental health support, and career counselling. Strengthening social safety nets ensures that unemployed youth do not fall into poverty and have the necessary support to re-enter the job market. Comprehensive social safety nets can also provide a safety cushion, allowing young individuals to pursue further education or retraining.
  6. Investing in Technology and Innovation: Newer sectors can leverage technology and innovation to accrue new employment opportunities. Government investment in research and development will create an enabling environment for technological innovation and, finally, high-tech jobs. For instance, the Digital India initiative will impart digital literacy and thereafter create a demand for jobs in IT and other digital services.

Conclusion

Youth unemployment is a critical problem that affects not only the Indian economy but also the broader social fabric of the country. Addressing this crisis requires a comprehensive approach that includes enhancing education, promoting entrepreneurship, and implementing effective labour market policies. The 2024 Budget provides a foundation for tackling this challenge, but continued efforts are needed to ensure that young people have the opportunities they deserve. By addressing youth unemployment, India can unlock the potential of its young population, drive economic growth, and foster a more stable and prosperous society.