By 2020, the median individual age in India will be 29 years, very likely a city-dweller, making it the youngest country in the world. India is set to experience a dynamic transformation as the population burden of the past turns into a demographic dividend, but the benefits will be tempered with social and spatial inequalities. With the West, Japan and even China aging, this demographic potential offers India and its growing economy an unprecedented edge that economists believe could add a significant 2 per cent to the GDP growth rate.
Indian Youth
A closer analysis of the urban youth suggests that greater political participation, engagement at policy level and urgent attention to improving their quality of life can ensure that India enjoys the benefits of this dividend. These are some interesting facts emerging from the findings of the ‘State of the Urban Youth, India 2012: Employment, Livelihoods, Skills,’ a report published by IRIS Knowledge Foundation in collaboration with UN-HABITAT
But the report suggests urban spaces have not necessarily aided the quality of life enjoyed by Indian youth. A telling sign: one-fifth of the Indian urban population lives on less than a dollar a day. Additionally, the report finds that while income levels in cities may appear to be higher, the cost of living is also constantly increasing, resulting in shrinking savings, inadequate access to health care and lack of quality education. The report’s findings indicate that the problem is not urbanisation per se but the inequalities that it seems to accentuate. While India is undergoing a demographic transition, regional disparities in education mean the benefits will not be evenly spread across the country. The report says the southern and western States will be the first to experience a growth dividend as they accounted for 63 per cent of all formally trained people. The largest share of youth with formal skills was found in Kerala, followed by Maharashtra, Tamil Nadu, Himachal Pradesh and Gujarat. Among those undergoing training, Maharashtra had the highest share, Bihar the lowest.
The unequal access to opportunity and the lack of emphasis on education remains a persistent problem. The report finds that a person in an urban area has a 93 per cent greater chance of acquiring training than someone in a rural area.
Unemployment in India
According to the findings of the 68th Round Survey by the National Sample Survey Office (NSSO), recent years have seen increase in unemployment rate in India, which is 2% in rural areas and 3% in urban India. The unemployment rate per 1,000 population is at 27, while it was 25 two years ago. As on January 1, 2010, the number of unemployed was 9.8 million. By January 1, 2012, it has increased to 10.8 million. In rural areas, the unemployment rate for both male and female is almost at the same level, 2%. But, in, urban areas, women are more unemployed than men. The rate is 5% for women and 2% for men.
India has witnessed a work force (activity status determined on the basis of reference period of one year) growth of 13.9 million in just two years, between 2010 and 2012. As on January 2010, the workforce at the all-India level, was about 459 million (rural men – 231.9, rural women – 104.5; urban men – 99.8 million and urban women – 22.8 million). As on January 2012 (present survey), it has increased to 472.9 million (rural men – 234.6, rural women – 101.8 million; urban men — 109.2 million and urban women – 27.3 million).
The current workforce at the all-India level is 47.2 crore. More than half the population (52%) is self-employed, while 18% work as regular wage/salaried employees and 30% as casual laborers. More people are self-employed (56%) and work as casual laborers (35%) in rural India. In Urban India, it is the waged/salaried (43%) who constitute a majority. They are followed by the self-employed (42%) and casual laborers (15%). Nearly half the population (49%) is engaged in agriculture, while 24% are working in secondary sector and 27% in tertiary sector.
In the wake of increasing population, the problem of unemployment is likely to worsen, if ample jobs are not created to accommodate the young working population. This calls for a well-concerted national policy to tackle the problem of youth unemployment. Measures should be undertaken to make jobs more accessible by first of all getting rid of local barriers. Secondly, many of youth may need re-training or simply the possibility of gaining work experience away from home. Priority should be accorded to setting up cross-town/district vocational training and educational programmes through the State-level policies
Initiatives by government
A broad reflection shows that the Government has decided to work on triggering the economy with a lot of thought towards creating long-term, sustainable means which can keep the growth curve moving up in the years that follow. The National Skill Mission to develop allied skills of the youth, along with transforming employment exchanges into career counseling centres, reflect the synergy in the thought that has gone into evaluating the employment problem. Considering the fact that the nation is aiming for 7-8 per cent growth in the coming years, creating job opportunities for a skill-centric nation to ensure growth possibilities and enhancing consumption power is going to be of pivotal importance.
Keeping the problem of unemployment in mind in the recent budget several schemes and a specialized amount was allocated for youth like-
- Fund of Funds with a corpus of 10,000 crore for providing equity through venture capital funds, quasi equity, soft loans and other risk capital specially to encourage new startups by youth to be set up.
- A national multi-skill programme “Skill India” to be launched to skill the youth with an emphasis on employability and entrepreneur skills. It will also provide training and support for traditional professions like welders, carpenters, cobblers, masons, blacksmiths, weavers etc. Convergence of various schemes to attain this objective is also proposed.
- Comparing the size of the Indian economy, the performance of the Apprenticeship Training Scheme is not satisfactory and a large number of training facilities in the industry are unutilized “Apprenticeship Act” to be suitably amended to make it more responsive to industry and youth.
- Aajeevika, the National Rural Livelihood Mission (NRLM), aims to eliminate rural poverty through sustainable livelihood options. Under this mission, Women SHGs are provided bank loans at 4% on prompt repayment in 150 districts and at 7% in all other districts. To extend the provision of bank loan for women SHGs at 4% in another 100 districts and an initial sum of ` 100 crore to set up a “Start Up Village Entrepreneurship Programme” for encouraging rural youth to take up local entrepreneurship programme.
Job Opportunities in SMEs
Small and medium enterprises (SMEs) have come to occupy prominent role in the economic growth in many developing countries. The SMEs contribute to growth, innovation and jobs and are major drivers of Innovation and employment. The SME sector in India is rightly referred to as the backbone of national economy, which contributes nearly half of the industrial output, 40% of India’s exports, employing 60 million people, create 1.3 million jobs every year and produce more than 8000 quality products for the Indian and international markets. With approximately 30 million SMEs in India, SMEs play a critical role in generating millions of jobs, especially at the low-skill level. The SME sector should be accorded priority in our national planning.
Lack of communication to entrepreneurs about financing requirements, and education and skills shortages can serve as a potential constraint to having more business-driven employment in the country. The increasing unemployment rate is a pointer to the fact that the education system has failed many people. There are many business people who started with nothing but have built very successful companies.
Information and communication technology is a viable gainful field for the youth as well as SMEs. Web design and development can give young people formal digital skills and direct experience in the workplace, while helping SMEs get online in the process. The low digital capability of many SMEs is a huge limitation on their growth and productivity. Many SMEs are without a website; many young people can design a website, but lack the training and experience in the workplace to be able to use these skills to get a job. Civil society can help to build a link between the two.
Conclusion
Undoubtedly, SMEs in India continue to post their growth stories, there is huge potential amongst Indian SMEs that still remains untapped. Once this untapped potential becomes the source for growth of these units, there would be no stopping to India posting a GDP higher than that of US and China and becoming the world’s economic powerhouse. For this the growing youth potential in the country needs to be harnessed by the SMEs.
There is need for promoting awareness among young people of the opportunities and challenges of entrepreneurship and self-employment, and the role of young people in shaping their future and that of their country’s economic and social development.
Some experts have provided recommendations for the government, community and businesses in order to take the youth innovation forward. Some of these recommendations to the government include:
- National and local governments should work together to make business registration as efficient as possible
- Governments and education authorities should include self-employment as a viable alternative within careers advice
- Governments should use existing structures such as chambers of commerce to support the development of youth entrepreneurship
- Governments should encourage schools and colleges to run business competitions that promote start-up opportunities
- Governments should prioritize investment in youth entrepreneurship initiative to tackle youth unemployment
By Dr. Arvind Kumar, President, India Water Foundation
