Employment Generation Remains Frail

India is a country of the young. Nearly 65% of india’s population is less than 35 years of age. This demographic dividend however comes with a great challenge; employment generation. Main worry of India’s young voters is jobs and employment generation, according to a survey conducted by YouGov-Mint in 2019. Statistics show a worrying picture. In 2017-18, the unemployment levels were an all time high at 6.1%. However, a few other reports suggest that there has been a slight increase in regular jobs in the market but regular jobs are minuscule in number. The pace of employment generation in India has been very much less than desired in the past few years.

There are many challenges that come in the way of dealing with unemployment in India. A developing economy like India witnesses structural shifts in the relative importance of various sectors. The share of industry and services has increased over the last two decades, agriculture has remained at around 15%. This change is salutary and has made the sharp increase in GDP numbers possible. This, however, has not translated into structural change in employment opportunities in India. One of the objectives of the 12th five year plan, was to create employment opportunities that were productive and decent. India has deviated from creating productive employment. Productive sectors such as manufacturing and services have not led to enough job creation in India despite a tremendous increase in GDP numbers. The low education level and extremely low skill base of agricultural labor that is transitioning into unorganized sectors of manufacturing and services, is taking a long time in moving on to the organized sectors. The time lag is considerable. The quality of employment in India will improve depending on the educational opportunities for the marginalized sections of the society and efficient programs for skill development.

There are other sociological reasons for unemployment in India. With educational opportunities now rising, the educated youth aspire for better paying jobs with good benefits. They are not willing to take up any and every job available. Another big issue is that even salaried jobs are at best uncertain. Employers do not want to enter into written contracts with their employees and deny them basic benefits such as paid leave etc. Growth in compensation (salary) has been very slow in the last few years too. Thus the quality of employment in India is very much debatable.

Since 2014, wages of workers in the manufacturing sector have also been sluggish. Apart from that, companies are cutting down on high end jobs. The only solution to these issues related to employment in India is the revival of the investment cycle.

India has become one of the two fastest growing economies of the world. It is now the fourth largest economy.  However, unemployment in India is still a major concern. The issues related to employment in India are many and need solutions. Some of these issues such as overhaul of labor and tax laws and upgradation of technology in the unorganized sector need an appropriate policy response from the government. These changes coupled with revival in investment cycle will bring about a boost in employment generation for sure.


  • Employment generation remains the toughest job. July 3. 2019. Pramit Bhattacharya.
  • Joblessness and informalization. By Santosh Mehrotra, Ankita Gandhi, Partha Saha, Bimal Kishore Sahoo

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