Will India’s Young Population Ever Achieve Their Full Potential?
By Vijay Garg
India’s demographic advantage of having a young population is a widely acknowledged fact. However, it is crucial to note that about 55 percent of India’s population is below the age of 30, while 25 percent are below the age of 15. This means that the country’s working age population of over a billion has immense potential for employment and economic growth. India’s Young Population: A Burgeoning Liability?
It is noteworthy that concerns about the failure of this demographic dividend were raised almost two decades ago. It was pointed out that the absence of appropriate policies and their weak implementation could lead to a collapse of this advantage. Unfortunately, since then, successive governments have failed to implement policies that could unlock the full potential of the young population.
Weak public education and skills arrangements, complex labour laws, and policies that discourage labour-based export and import-competitive domestic production, as well as poor infrastructure, are some of the factors that have hindered the growth of employment opportunities for young people. Even avoidable policy shocks such as communication and demonetization have affected productivity.
These factors have led to mounting evidence that the demographic dividend in India is eroding, and this could have serious implications for the country’s future. In fact, according to an article published in a leading newspaper by Mahesh Vyas, the head of the Centre for Monitoring the Indian Economy (CMIE), the employment rate for youth in the age group of 15 to 24 was only 23.2 percent in 2020, which is a concerning figure. This rate is much lower than the employment rate of youth in North America (50.6 percent), OECD countries (42 percent), Pakistan (38.9 percent), and Bangladesh (35.3 percent).
Furthermore, the same data shows that the employment rate of youth in India has declined from 43.4 percent in 1994 to 40.5 percent in 2005 and 23.2 percent in 2020. It is crucial to note that the definition of employment used in these figures is very loose. In fact, CMIE’s own figures rely on a more stringent definition, which shows that the employment rate for all age groups fell sharply from 20.9 percent in 2016-17 to 10.4 percent in 2021-22.
To get a more accurate picture, it is essential to look at the official figures taken from the National Statistics Office, which was established in 2019 by the merger of the National Sample Survey Office and the Central Statistics Office. The surveys conducted by this office were done every five to seven years till 2017-18. Since then, they have been conducted annually.
As per the latest statistics released, the definition of youth has been broadened to include people aged 15-29. According to official figures, the employment rate among the youth has shown a downward trend over time. It has decreased from 53.3 per cent in 2004-05 to 30 per cent or less in 2017-18 and beyond. However, the year 2020-21, which was affected by the Covid pandemic, did see some improvement in the figures. It is important to note that these figures also revealed a troubling rise in open unemployment, which went up from 5-6 per cent in 2004-05 to 17-18 per cent in 2017-18 and 2018-19.
According to an article published in a leading newspaper by Mahesh Vyas, the head of the Centre for Monitoring the Indian Economy (CMIE), the employment rate for youth in the age group of 15 to 24 was only 23.2 percent in 2020, which is a concerning figure. This rate is much lower than the employment rate of youth in North America (50.6 percent), OECD countries (42 percent), Pakistan (38.9 percent), and Bangladesh (35.3 percent).
Nevertheless, there was some reduction in the rates of open unemployment in 2019-20 and 2020-21, which can be attributed to the increase in the number of self-employed and occasional labourers. This reduction also highlighted the hidden unemployment in rural areas due to open unemployment in urban centres. Due to the lockdowns caused by Covid, lakhs of people returned to their homes, thereby further exacerbating the employment crisis. I credit my colleague Radhika Kapoor for bringing this to our attention.
It is vital to note that the employment indicators for women workers are even worse than those for men. For example, the employment rate of women workers fell from 34.9 per cent in 2004-05 to 13.5 per cent in 2017-18. Additionally, open unemployment among urban female youth increased from 14.9 per cent in 2004-05 to 27.2 per cent in 2017-18.
Looking ahead, we must ask ourselves if there will be better employment opportunities for the children and girls coming to the job market with better education, skills and training. However, we must also take a closer look at the state of education in government schools, as revealed in the Annual Status of Education Report Survey (ASER) conducted by Pratham Shiksha Foundation. The survey, based on over five lakh children from more than 15,000 villages across over 500 districts, has been released every year since 2005. The latest survey was conducted in 2018 before the school closures due to Covid, and the 2019 report focuses on young children’s education.
As per the ASER report, a common test used to measure literacy is the ability of Class V children to read a Class II book. Shockingly, in government schools, only 44.2 percent of Class V children could do so in 2018, a decline from 53.1 percent in 2008. This is despite the Right to Education Act being enacted. However, there has been some improvement in states like Himachal Pradesh, Kerala, Punjab and Maharashtra, while states like Bihar, Jharkhand, Madhya Pradesh, Rajasthan and Uttar Pradesh continue to lag behind.
In addition, the report also revealed that the success rate of Class V children in basic maths has declined from 34.4 percent in 2008 to 22.7 percent in 2018. This means that more than three-fourths of Class V children in government schools were unable to carry out normal division correctly. Even the success rate of Class VII children has reduced from 65 percent in 2008 to 40 percent. In this era of digitization, algorithms, robotics, 3D printing and artificial intelligence, the prospects for the youth of India appear challenging.
The author can be reached at [email protected]