Srijan Upadhyay supplied fried snacks to small eateries and roadside stalls in Bihar, a poor eastern Indian state, before COVID-19 lockdowns he was forced to close many of his customers, many without paying him what he owed.
With his business in shambles, the 31-year-old IT undergraduate travelled to Rajpura, Punjab state, this month to meet with consultants who promised him a work visa for Canada. He brought his neighbour with him, who also wants a Canadian visa because his commerce degree has not helped him find work.
“There aren’t enough jobs for us here, and whenever government vacancies come up, we hear about cheating and leaking test papers,” Upadhyay said as he sat in the Blue Line consultants’ lounge. “I am confident that we will find work in Canada, whatever it may be at first.”
According to data from Mumbai-based the Centre for Monitoring Indian Economy (CMIE) and the International Labour Organization, India’s unemployment rate has exceeded the global rate in five of the last six years, owing to an economic slowdown exacerbated by the pandemic.
According to the CMIE, India’s jobless rate fell to 7.9 per cent last month after peaking at 23.5 per cent in April 2020.
The Canadian rate fell to a multi-month low of 5.9 per cent in December, while the OECD group of mostly rich countries reported a sixth consecutive month of decline in October, with countries including the United States experiencing labour shortages as economic activity picks up.
Worse, India’s economic growth is creating fewer jobs than it used to, and as discouraged job seekers opt for menial jobs or relocate abroad, the country’s already low rate of workforce participation – those aged 15 and above working or looking for work – is declining.
“The situation is worse than the unemployment rate indicates,” said CMIE Managing Director Mahesh Vyas to Reuters. “The unemployment rate only measures the proportion of people who do not find work out of those who are actively looking for work. The issue is that the proportion of people looking for work is decreasing.”
Critics say that such hopelessness among India’s youth is one of Prime Minister Narendra Modi’s biggest failures since taking office in 2014 on the promise of creating millions of jobs, which has yet to be fulfilled.
It also runs the risk of squandering India’s demographic advantage of having more than two-thirds of its 1.35 billion people of working age.
The labour and finance ministries did not respond to requests for comment. As of last month, the labour ministry’s career website had more than 13 million active job seekers, but only 220,000 vacancies.
In December, the ministry told parliament that “employment generation coupled with improving employability is the government’s priority,” emphasising its emphasis on small businesses.
Modi’s opponents are now attempting to capitalise on the crisis in the run-up to elections in five states, including Punjab and the most populous Uttar Pradesh, in February and March.
“Every kid looks to Canada because there aren’t enough job opportunities here. Parents hope to send their children to Canada in some way “Arvind Kejriwal, the Delhi Chief Minister whose Aam Admi Party is a front-runner in the Punjab elections, stated this at a recent public function in the state.
“I assure you that they will begin to return within five years because we will provide so many opportunities for them here.”
He did not elaborate, but party officials stated that their policies would attract job-creating businesses.
Haryana, Punjab’s neighbour and a hub for global IT companies and automobiles, has already ordered that the majority of jobs be reserved for locals. If elected, a political party in Punjab has promised something similar.
“To some extent, if a particular sector is doing well, then some arrangements can be made to ensure that local youth get opportunities,” said Amit Basole, director of Azim Premji University’s Centre for Sustainable Employment in Bengaluru.
“However, if overall job creation is low, such policies will fail to address the underlying issue. Furthermore, they may exacerbate the situation by reducing investment.”
According to Vyas of CMIE, India needs more investment in labor-intensive industries and should employ more women, as Bangladesh has done with its garment factories.
According to CMIE data, India experienced its longest period of slow down since 1991 between 2018 and 2021, with unemployment averaging 7.2 per cent. During that time, global unemployment averaged around 5.7 per cent.
The labour shortage is especially acute in India, where 12 million people reach working age each year. According to economists, the economy has not grown quickly enough to absorb so many people.
Furthermore, the increase in workforce for every percentage increase in GDP has shrunk: the economy will need to grow at a rate of 10 per cent to increase employment by 1per cent, according to Basole of Azim Premji University.
According to Basole, employment grew at a rate of around 2 per cent in the 1970s and 1980s, when GDP was growing at a rate of 3 per cent to 4 per cent.
Back in Punjab, Blue Line counsellor Lovepreet reported that business was brisk, with his agency serving 40 clients per day.
“I’ve been doing this for four years,” the 27-year-old, who gave only one name, explained. “I’m going to Canada either this year or next. Politicians keep promising us government jobs, but no one ever follows through.”