Youth in all ages have been the vanguard for change. The thirst for freedom, better life and opportunities, impatience for change, passion for innovation, idealism and creative fervour are the greatest assets available to any government. And when almost one third of the population hold these aspirations, then it has to be channelled in the right manner.

India’s biggest asset is its young population that contributes to the economy and fuels the entire mechanism of growth. This asset can only realise its full potential and bolster the country’s global growth prospects when it is a working population. In 1985, the International Year of the Youth, the Department of Youth Affairs and Sports, Ministry of Human Resource Development, Government of India, initiated a proposal to formulate a National Youth Policy. The National Youth Policy, the first of its kind was tabled in the two houses of Parliament in late 1988. It recognised that “the most important component of the youth programme” has to be the “removal of unemployment, both rural and urban, educated and non-educated.”

Since the National Youth Policy of 1988, not too many initiatives can be cited that have helped achieve the aims and objectives of the policy. Unemployment is still a grave problem among the youth, and the idealistic zeal with which the policy was drawn has hardly made a dent in the national agenda. This growing problem needs to be scrutinised and addressed. Our demographic dividend is a major reason that India is a contender in one of the fastest growing economies in the world. But this advantage can turn on its head if the government does not create better employment opportunities.

Again, the National Youth Policy 2003 was designed to galvanise young people to rise up to new challenges. In 2005, the National Council for Skill Development (NCSD) was constituted under the chairmanship of the then Prime Minister. In this council, the Government of India (GOI) has made skill development a major national priority especially for the youth. In this context, the President of India commented, “India is a nation of young people. India’s demographic dividends can be realised only if the country invests in developing skills to make our youth employable. Through a planned investment in skill development, the country holds the potential to account for a fourth of the global work force by 2022, when India will mark 75 years of its independence.”

According to a report by Indira Gandhi Institute Developmental Research (IGIDR), the International Labour Conference (ILC) 2005, the discussion on youth employment concluded that there were many young workers who did not have access to decent work. A significant number of youth are underemployed, unemployed, seeking employment or between jobs, or working unacceptably long hours under informal, intermittent and insecure work arrangements, without the possibility of personal and professional development; working below their potential in low-paid, low-skilled jobs without prospects for career advancement; trapped in involuntary part-time, temporary, casual or seasonal employment; and frequently under poor and precarious conditions in the informal economy, both in rural and urban areas (ILC, 2005a).

The size of the youth population (15 to 24 age group) has increased three fold during the last four decades of the 20th century. It increased from 73.22 million in 1961 to 195.07 million in 2001. The projected estimations (RGI) indicate a further increase in the size of the youth population to 239.77 million by the end of current year (2011). In effect, the size of the youth population in India would be larger than the total population of many countries in the world. Since, the fertility rate of the country is on the decline, the dependency ratio will automatically be lesser allowing for an ideal window of opportunity to surge ahead of our neighbours and secure the country's growth prospects.

A summary of the trends in youth labour market is given below.

❶ Labour force and work participation rates have fluctuated between 40 to 44 per cent during the last three and half decades. The share of youth outside labour force increased.

❷ The size of the youth population (15 to 24 age group) has increased three folds in the last four decades of the 20th century. The projected population in 2011 is around 240 million youth population in the country.

❸ The literacy rate for youth population rose from 56.4 per cent in 1983 to 80.3 per cent in 2007-08. The percentage of youth attending educational institutions increased from 17.4 per cent to 32.8 per cent during the same period. Regarding employability, only 4.9 per cent of young workers had post-secondary level of education in 2007-08.

❹ The self employed form the majority of youth workers (50 per cent). Casual labourers form the next highest category among youth workers (35 per cent). The share of youth regular salaried/wage employment increased over time.

❺ However, the share of agriculture in youth employment declined faster than adults. It was 54.4 per cent for youth and 57 per cent for adults in 2007-08. It is interesting to note the share of industrial sector increased faster for youth as compared to services. Unlike adults, the share of industry for youth is higher than services in the year 2004-05.

❻ India has 459 million workers in 2004-05. Out of this, 423 million (92 per cent) are unorganised workers. Most of the youth are also in the unorganised sector.

❼ The number of youth unemployed in India increased from 6.5 million in 1993-94 to 9.5 million in 2004-05. Out of this, 61 per cent are in rural areas while 70 per cent of them are male. Unemployed youth make up almost half (49 per cent) of the total unemployed despite the fact that, the youth share of the total adult workers was only 21 per cent. The share of youth unemployed to adult unemployed declined from 52.2 per cent in 1993-94 to 49.0 per cent in 2004-05.

❽ Unemployment among youth is three times to that of adults for usual status.
It is two times to that of adults for weekly status.

➒ Joblessness (27 per cent) is much higher than unemployment rate. In absolute number, of the total 203.6 million youth.

➓ Literacy and educational levels are increasing for Indian youth. However, we still have many illiterates and only few workers had education above secondary and graduation. About 89 per cent of the youth have not taken any kind of vocational training and among the rest about half of them have received it through hereditary practices. It indicates a negligible level of formal vocational training from the youth.

Wage levels of Youth Employed are lower than those of adults.

26 per cent of youth employed suffer from poverty (around 22 million).

Around 40 per cent of youth population are vulnerable. They include 11 per cent of working poor, 4 per cent of unemployed and 25 per cent of not actively seeking jobs.

Unemployment of youth is only one of the problems of the youth labour market. Since many of them are in the informal/unorganised sector, the income and productivity of workers, conditions of work and social security have to be improved.

Based on the summary, the following three recommendations are given.
Appropriate Macro Policies
Appropriate macro policies are important for generating employment. In other words, one has to examine whether macro policies in India are pro-employment and pro-poor in the post-reform period. Investments are important for higher growth, which can improve employment if invested in labour intensive sectors. One of the reasons for the low growth in employment in the post-reform period could be low growth in public investment. Fiscal reforms are supposed to reduce fiscal deficit, improve social sector expenditures and capital expenditures. These are expected to improve employment prospects.  Recent improvements in tax/GDP ratio have increased investments and expenditures in social sectors.

Trade liberalisation is expected to improve exports, which can generate employment. However, it depends on whether the benefits percolate to unskilled workers or skilled workers. If only IT sector benefits, overall employment prospects are not bright. The evidence seems to suggest that the employment in organised sector manufacturing has not improved much.

Financial sector liberalisation led to decline in credit to agriculture sector, small and marginal farmers and weaker sections in the post-reform period. The micro credit movement is not a substitute for the agricultural credit by the banks.

Regarding international experience, a study by Pasha and Plaintively (2003) on Asian countries show that the key macroeconomic determinants of the degree of pro-poor growth appear to be the rates of employment and agricultural growth. The study argues given the inflation rates, that countries can be more flexible in their policy stance with regard to the adoption of more growth oriented as opposed to stabilisation policies. Developing countries should learn from China on agricultural growth, rural non-farm employment, public investment and human development. The impact of growth on poverty reduction is quite significant in China.

Improvement in Education
India has not been able to take advantage of ‘demographic dividend’ because of low education and skills. “It is important to realise however that we can only reap this demographic dividend if we invest on human resource development and skill formation in a massive way and create productive employment for our relatively young working” (Approach to 11th Five Year Plan).

Problems in education are:
(i) access to basic education for the unreached and social groups;

(ii) qualitative improvement to raise learning achievements;

(iii) tackling high drop-out and low retention. 

Globalisation of elementary education alone will not suffice in the knowledge economy. Modern industry needs higher education. One good sign is that the 11th Plan increases allocation from 8 per cent to 19 per cent of gross budgetary support in education. Measures to improve
employability have to be improved. Even the educated find it hard to get jobs as skills are not appropriate for the jobs. Improvements in skills and vocational training are needed.

A person with a mere eight years of schooling will be as disadvantaged in a knowledge economy dominated by the Information and Communications Technology (ICT) as an illiterate person in modern industry and services. Secondary education is vital because it is in this age group that the child, particularly the girl child is extremely vulnerable and is pushed into child labour, early marriage or trafficking. The 11th Plan must therefore aim to progressively raise the minimum level of education to high school or class X level. A major initiative for expanding secondary education up to class X, must be initiated in the 11th Plan and should include access to organised sports and games. However, the pace at which this expansion takes place will also depend on how quickly we can reduce the dropout rates at the elementary stage.

There are emerging signs that rapid growth can result in shortage of high quality skills needed in knowledge intensive industries. One area of concern is that India is losing edge on the tracking of pure sciences. To continue competitive advantage and ensure a continuous supply of quality manpower, we need large investments in public sector institutions of higher learning. This should be accompanied by fundamental reform of the curriculum as well as service conditions to attract a dedicated and qualified faculty.

Active Labour Market Policies
Skill improvement is one of the important things needed in active labour market policies. Expanding capacity through private sector initiatives in higher learning needs to be explored while maintaining quality. Conditions of work and promotion of livelihoods are important for raising the incomes of youth workers. Since majority are in the informal sector, protective measures are also required. Minimum level of Social Security like life insurance and health insurance have to be given to unorganised workers.

Self help groups and micro finance institutes should be encouraged for livelihood promotion. Cluster development should be undertaken for improvement in productivity of self-employed. Existing self-employment programmes (eg Prime Minister’s Rozgar Yojana and wage employment programmes – National Rural employment Guarantee Scheme) should be strengthened. Employability of youth has to be increased through skill development and vocational training. The Government of India has realised the importance of skills. The mid-term appraisal of 11th Plan says that improved training and skill development has to be a critical part of the employment strategy. A Coordinated Action Plan for skill development has been approved by the Cabinet to have a target of 500 million skilled persons by 2022. “A three tier institutional structure consisting of: (i) the Prime Minister’s National Council on Skill Development, (ii) the National Skill Development Coordination Board, and (iii) the National Skill Development Corporation, has been set up to take forward the Skill Development Mission (p. 205, GOI, Planning Commission 2010).

This is an important initiative. To conclude, India is in the midst of a process where it faces the window of opportunity created by the demographic dividend. The ‘demographic dividend’ argument ignores the fact that available workers are not automatically absorbed to deliver high growth. Savings and investments may increase because of reduction in dependency ratio. However, deficit in education and employability of the workforce in India may hamper the advantages of this dividend. Related to this are problems of working poor, unemployment and joblessness among youth. This needs to be remedied in order to take advantage of the opportunity of growth that the demographic dividend is supposed to give to India.

Acknowledgement:
Summarised and excerpted from a report entitled Youth Employment and Unemployment in India –  by S Mahendra Dev and M Venkatanarayana – Indira Gandhi Institute of Development Research (IGIDR)

References:
ILO (2005a) Youth: Pathways to Decent Work: Promoting Youth Employment – Tackling the Challenge, Geneva: International Labour Organisation GOI (2010), “Mid-Term Appraisal of Eleventh Five Year Plan,” Planning Commission, Yojana Bhavan, Government of India

Pasha, HA and T Palanivel (2003), “Macro Economics of Poverty Reduction: An Analysis of the

Experience in 11 Asian Countries,” Discussion Paper No 3, UNDP Asia – Pacific Regional

Programme on Macro Economics of Poverty Reduction.