The job crisis in India has been a crucial factor for economic development because more employment contributes to economic growth by providing goods and services for consumption and infrastructure development. The job opportunities are shrinking considering the vast population and great socio-economic disparity between different levels of society. The major causes of unemployment in India can be attributed to a large population, lack of vocational skills, or low educational levels of the working population. The labor-intensive sectors suffering from the slowdown are also an important factor related to the job crisis. The demonetization of 2016 negatively impacted the informal sector, causing a crunch in industrial output and a lack of job opportunities. In 2020, the covid-19 pandemic caused a drastic setback in India’s job scenario, and the effects are still visible in the economy. The unemployment percentage was low in 2017 but rose and became highest in 2020. Organizations have used the pandemic to trim their workforce and reduce costs which mainly affected the salaried jobs in the private sector. The job crisis has been aggravated over the years and only gets a steep rise due to the impact of the pandemic on new job creation and the recruitment process. In April 2022, India’s overall unemployment rate is around 7.8% in which the unemployment rate in urban areas was 9.22% and 7.18% in rural areas. The state of Haryana has the highest unemployment of 34.5%.
India’s Job Crisis Scenario:
One of the most significant factors of the job crisis and lack of employment is the poor development of labor-intensive sectors that can create more job opportunities for the employable population. A mismatch between jobs and skills required are other big concerns for getting a proper job. The concept of skills mismatch includes many aspects such as over or under-qualification, skill gaps, and skill obsolescence. The causes and consequences of these forms are quite different and require different approaches to address. One of the historical reasons may be the economy’s over-dependence on the public sector for jobs and an inadequate education infrastructure at the ground level that fails to supply enough skilled workers for local industries. There is a tendency for employers to go for contractual workers who are available for less salary and without job security. The problem of job crisis is faced more by the educated class as they are unwilling to take up a low-paying informal job. On the other hand, the poorly uneducated and less skilled workers with little access to high-salaried jobs take up whatever work is available. The other reasons for the job crunch can be more importance given to a few industries and lack of competitive environment, low bargaining power of the workforce, decreasing reliance on government sectors, and reservation benefits given under the quota system.
Reasons For Job Crisis:
Some of the most common factors that lead to skills mismatch and restrict job opportunities are mentioned as follows:
- Quality of education is becoming insufficient to match job requirements.
- Rapid technological development decreases the need for specific skills.
- Process automation makes specific skills obsolete.
- Lack of vocational training to develop skills required for industries.
- Demographic change leads to limited job opportunities.
- Lack of access to information about the requirements and responsibilities of a position.
- Preference for a specific type of job creates saturation and fewer opportunities.
- New forms of work culture affect employment stability and employee retention.
Kuznets’ Hypothesis:
The hypothesis by Simon Kuznets suggests that as an economy develops, market forces increase then decrease the overall economic inequality of the society. The hypothesis implies that in the early development of an economy, new job opportunities cause the influx of rural labor to the cities for earning. As per the Kuznets hypothesis, as job opportunity increases with industrialization and infrastructure development, the centre of the economic activities shifts from rural areas to the cities. The rural population begins to migrate from rural to urban areas in search of better-paying jobs. This process worsens the income gap between urban and rural areas and escalates economic inequality. There is an increase in the urban population and a decrease in the rural population. But Kuznets’ hypothesis also states that economic inequality starts reducing as an average income level is reached, and the processes associated with industrialization and development become stable for economic needs. At this point, the development of society is meant to benefit people by increasing per-capita income and effectively decreasing the income gap and economic inequality.
Possible Solutions For Handling Job Crisis In India
- India should shift focus from capital-intensive to labor-intensive sectors that potentially contribute to industrialization and economic growth.
- There is more opportunity in the service sector that needs to be explored. For example, the tourism sector offers a huge opportunity to provide good quality jobs where you can export your services to foreign tourists and earn money.
- The informal occupations are the professions where India can create many jobs and should focus a lot on skill development activity around these jobs.
- The government should ensure that the employment-intensive industries get support from the government to create more jobs and follow the right kind of policy for employment.
- There is a need to create more job opportunities in small industries in the services and manufacturing fields.
- It is necessary to improve the employability of human resources that empowering them to acquire and improve marketable skills that can lead to more job opportunities, especially in sectors that experience rapid technological and organizational change.
Conclusion:
India is going through an acute job crisis, a matter of great concern. The recent pandemic has adversely affected the country’s job scenario and employment opportunities. The sudden and drastic backlash in the job environment has exposed the loopholes and limitations to address the unfolding crisis affecting such a large population with diverse demographic and economic structure. It also brings into focus the economy’s over-reliance on certain sectors for jobs and inadequate attention towards building capabilities that can enable workers to learn and apply skills required for labor-intensive industries. At the end of the day, it’s all about developing a vibrant economy that determines how to create job opportunities for the employable generations.