Measuring the Indian economy is challenging. But multiple surveys are emphasising a crisis
Which is the biggest problem that the next government that will take power by the end of May face? This is a multiple-choice question unfortunately. Will it be the precarious situation on the border with Pakistan? Will it be the massive trade deficit with China? Will it be the state of the Indian environment? Or the crisis in Indian agriculture? And lastly, could it be that of mass youth unemployment? No matter what happens in the elections and whosoever gets the hot seat, the next government will have its hands full the day it is sworn into office. The last two crises are the most pressing ones though, because they directly impact the mood of voters and are interlinked. The agrarian crisis is at a level born out of modern farming and food chains, which have made land more productive and subsistence farming even more marginal. As a result, more and more young people, the children of farmers and farm labourers, want to enter the workforce but find far too few jobs compatible with their skill set. At the same time, increasing levels of manufacturing and software automation are causing job numbers to shrink further.
While Opposition politicians will use these numbers as a stick to beat up their rivals in power, they should realise one important fact. This is not a crisis unique to India, youth unemployment is off the charts in many countries across the world, in developed and developing economies. Fixing this will not just take a national effort but a coordinated global push. And innovative new solutions will have to be found. For example, should a “Universal Basic Income”, like that initiated by Finland, be followed? The rationale is that if people know that they are getting a decent level of income, they can focus their energies on doing something creative and economically worthwhile. But the question arises whether India can afford such a scheme? The other crucial fact that is becoming increasingly clear in some of the job surveys that have been released is the fact that India’s higher education system is also broken. Many young men and women have qualifications but cannot get jobs, in no small part due to their qualifications not being worth the paper they are printed on. Poor language and social skills are the biggest problem of all. In many other parts of the world, such as in France, the issues around youth unemployment have driven thousands of people on to the streets. India has so far been spared mass protests and while election season will pass off peacefully, the fact is that by May-end India will have another batch of freshly-minted graduates with fancy degrees but with few jobs. How long can any government keep them off the streets? And the problem is menacing. India’s unemployment rate rose to 7.2 per cent last month, up from 5.9 per cent in February 2018, according to data compiled by CMIE.