According to CMIE, what is most worrisome is the very sharp fall in this ratio in the CPHS dataset during the last five years. The employment rate among the youth in 2016-17 was 20.9% which fell to 17.9% in 2017-18, to 15.5% in 2018-19 and to 14.7% in 2019-20.
“In 2020-21, the first year of the pandemic, India’s youth employment rate fell dramatically to 10.9% and to 10.4% in 2021-22,” CMIE said in its weekly labour market analysis.
As per the CMIE, employment conditions are quite adverse for the youth resulting in relatively low labour participation rate (LPR). Between 2016-17 and 2021-22, while the average LPR was 42.6%, for the youth it was much lower at 22.7%.
Further, while the overall unemployment rate averaged at 7%, the youth experienced an unemployment rate of over 34%. “Apparently, the high unemployment rate dissuades them from joining the labour force. This is particularly true for women,” CMIE said.
CMIE is of the view that there is no dearth of capital in the world today.
“Ideally, India should be grabbing this rare opportunity of easy availability of labour and capital to fuel rapid growth,” it said. “However, it seems to be missing this bus,” CMIE added.
According to CMIE, an economy needs to be prepared to offer jobs to the fresh annual cohorts of hopeful youngsters who are in this transition phase.
“A young, energetic and freshly educated population, if harnessed well, can deliver growth and savings and pave the path to prosperity,” it said. “If not harnessed for long they could become a source of social tensions,” it added.