The unemployment rate has far-reaching consequences when it comes to affecting the country's growth and development. According to credible data from the Centre for Monitoring Indian Economy (CMIE), the unemployment rate has risen to an eight-month high of 9.2 percent in June 2024; witnessing an increase from 7 percent in the previous month. While, at the same time, the labour participation rate has improved marginally. It rose from 40.8 percent in May to 41.4 percent in June 2024. However, it is important to note that the rise in unemployment comes amidst a higher Labour Participation Rate (LPR). The unemployment rate over recent years indicates not enough jobs have been added to make a significant difference. Periodic Labour Force Survey data showed the unemployment rate which stood at 3.4 percent in 2013-14 was only marginally lower at 3.2 percent in 2022-23.
“Of all aspects of social misery nothing is so heartbreaking as unemployment.”Jane Addams - American Activist, Sociologist and Writer.
Adverse Effect On Country’s Promising Economic Growth
Today, unemployment still remains a pressing issue in the Indian subcontinent. And as stated earlier, it can bring forth significant challenges pertaining to the country’s economic growth and social stability. Especially for an overpopulated country like India, coupled with an increasingly competitive job market, it affects millions of individuals across various demographic sectors.
"Following a decade of near jobless growth, the rising number of discouraged workers had pushed India's LFPR (Labour Force Participation Rate) down well below levels exhibited by the four Asian tigers at comparable stages in their demography," said Kunal Kundu, India economist at Societe Generale.
"We are the 5th largest economy, we are trending towards becoming the 3rd largest... factors that will contribute to it are labor addition, infrastructure growth, and efficiency improvements, where technologies like GenAI will play their part, a large developer ecosystem, the ability to build products in the country and be serviced all over the world, then there are regulatory tailwinds as well," he added.
As India is making rapid strides across industrialization and technological fronts, job creation has still not kept pace with the expanding workforce; thereby causing a substantial gap between labor supply and demand. This imbalance has been further deepened by structural inefficiencies, educational disparities, and economic disruptions. With this situation at hand, India must grapple with the multifaceted ramifications of unemployment so as to address this complex issue that has emerged as a critical imperative for various entities including policymakers, economists, and society at large. If we look at the current times, India has been growing at the fastest pace among major peers. However, the economy has yet to generate enough jobs for its large and expanding young population.
Unemployment has a grave impact on the Indian economy due to the reduction in consumer spending, lower tax revenues, increasing social welfare costs, among other important economic development parameters of a given country. Additionally, this also leads to social unrest and inequality which all together hinder the overall development.
Imperative Steps to Tackle Unemployment
Having understood the importance of employment, the government is expected to devise thoughtful policy measures to mitigate the prevailing economic challenges; thereby ensuring sustainable growth in rural and urban areas. Here, diversifying economic activities to create more employment opportunities and bolster the country's financial resilience is indeed the need of the hour.
So what can be the solution? Is it only the government who has to make the necessary changes or should individuals take proactive steps to enhance their employability by acquiring relevant skills through education, vocational training, or upskilling programs. Hence, one must understand that employment is solely on the merit basis. Also, as MSMEs and SMEs have been the backbone of India, one can also explore entrepreneurial opportunities. In addition, freelance work, or gig economy platforms can also help generate employment. So, it is imperative to stay informed about job market trends and networking can increase their chances of securing employment.
So to conclude, it is very crucial for both the parties, i.e., the general public and the government body work in tandem to mitigate the unemployment crisis and drive a promising overall growth of the economy, going forward.
