The country’s economic growth has been unable to create jobs proportionately over the past decade, raising questions about the significance of the growth for a large section of the population.
Employment elasticity, which indicates the ability of an economy to generate employment opportunities for its population as percent of its growth process, declined between fiscal 2005-06 and 2017-18, when the economy was apparently on tremendous growth momentum.
Between fiscal 2005-06 and 2009-10, the country’s employment elasticity was 0.55. It plunged to 0.25 between fiscal 2010-11 and 2017-18, when the economy averaged 6.6 per cent GDP growth.
The services sector is the only sector that saw an increase in employment elasticity: from 0.27 in fiscal 2009-10 to 0.40 in fiscal 2017-18.
In case of agriculture, it sank to -0.09 between fiscal 2010-11 and 2017-18 from 0.71 between fiscal 2005-06 and 2009-10.
Employment elasticity decreased in the construction sector too — from 2.22 in fiscal 2009-10 to 0.55 in fiscal 2017-18 — at a time when the government is implementing a host of mega projects, and there is a construction boom in the country.
Now the country has 13.8 million underemployed people. Of them, 45.3 per cent are in the service sector, 30.6 per cent in the agriculture sector and 24.1 per cent in the industry sector.
Of the underemployed people, 19.7 per cent are looking for new or additional jobs as their present jobs are temporary, while 15.8 per cent are looking for new jobs to get higher salary, the study pointed out.
Frustration is growing among the country’s prospective jobseekers as the scope of employment is not getting sufficiently widened. According to the latest official survey, there are 2.7 million unemployed people in the country.
The unemployment rate has slightly changed from 4.3 per cent in 2013 to 4.2 per cent last year though the government created a number of job opportunities over the period.
What is surprising is that the number of jobs rose impressively during 2002-2013 by 1.36 million per year. But it fell to only 0.35 million a year since 2013. In fact, the country failed to create adequate number of jobs despite higher economic growth in recent years, particularly since 2013.
According to the Labour Force Survey, rural areas have 1.82 million unemployed people, more than double the number of those 0.77 million in urban areas. Mention may be made that the country’s urban-rural population ratio is 30:70.
Latest report says the government will be able to create only half of the 30 million jobs it has promised to generate by 2030 at the current pace of employment growth. This is nevertheless a disheartening projection for the growing number of youths desperately seeking jobs.
The private sector is supposed to create more employment opportunities than the public sector. But investment in the private sector remains stalled for quite a long time — one of the major reasons behind the high unemployment rate.
Official estimates say about 12.2 per cent of the 20 million youths are unemployed in the country. Of them, 7.4 million youths have no scope for education, training or involvement in the employments.
Some social safety net programmes are playing a role in improving the livelihoods of marginalised communities but those are not sufficient to solve the problems they face. A lack of transparency of state-run service providers is a major concern for slum-dwellers, particularly in respect of their housing issues.
The youths in the marginalised communities can hardly meet the cost of education. The government needs to raise the stipend allocation to help them cover all education-related expenses.
Criticising the public sector vocational institutes, analysts say their quality is poor due to lack of proper monitoring. Only 14 per cent students in the country receive vocational education, which is very low compared to developed countries.
Investment growth in the manufacturing sector remains low particularly because of the lack of adequate infrastructure, including supply of quality electricity and gas. New investment in the apparel sector, which accounts for 48.3 per cent of the manufacturing sector, has also been slow.
The quality of education is not up to the mark. There is the need for enhancing the quality of higher education with special focus on skills development. The government should also pay serious attention to raising private investment and jobs through budgetary measures in the coming years.