India’s rate of unemployment doubled in the past two years, according to the State of India’s Environment (SoE) In Figures, 2019. This has particularly affected young graduates.
According to the report, the unemployment rate has gone up from four per cent to 7.6 in the last two years (May 2017-April 2019). The unemployment rate in April 2019 was the highest in two years. The rate for rural areas in this month was also the highest in this period.
SoE in figures was released by Delhi-based non-profit Centre for Science and Environment (CSE) on World Environment Day. The data for it has been provided by the Centre for Monitoring Indian Economy (CMIE), New Delhi.

Young Indians (aged 15-24 years) constitute nearly a fifth of India’s total population, according to the country’s 2011 Census. By 2020, they are predicted to make up a third of the country’s population.
The report notes that the youth (between 20-24 years), who constitute around 40 per cent of India’s labour force, have an unemployment rate of 32 per cent.
The unemployment rate among the educated is even worse. The rate among people with at least a graduate degree was 13.17 per cent in September-December 2018, up from 10.39 per cent in May-August 2017.
The Periodic Labour Force Survey for 2017-18 released by National Sample Survey Office too shows that unemployment rate increased with education level.
According to SoE in Figures, 2017, a major cause for high unemployment rates in India is the lack of skills required for jobs that are available. This is worrying because India is a young country — home to 20 per cent of the world’s young population — and a major portion of this young workforce, though educated, is unskilled.
Official figures validate this. The Union Ministry Of Skill Development and Entrepreneurship says 4.69 per cent of India’s total workforce is formally skilled, as against 52 per cent in the United States, 68 per cent in the United Kingdom, 75 per cent in Germany, 80 per cent in Japan and 96 per cent in South Korea.
So why do young, educated Indians have poor job skills? One reason is that India has a limited number of quality institutes in spite of growth in the number of higher education providers.
A ray of hope
The World Bank recently estimated that India needs to create 8.1 million jobs a year to maintain its employment rate, which has been declining.
Given India’s demographic dividend and urgency to create jobs, the manufacturing sector could prove to be a large employer that provides decent income opportunities.
For example, rapid modernisation of the food processing sector could be one way of increasing its export potential as well as improving employment elasticity-to-growth and investment in it.
With a rise in per capita income, domestic demand for processed food would also rise, making the sector a viable option for pushing manufacturing growth and employment.
Removing structural bottlenecks to the manufacturing sector is key to promoting job creation in more productive and better-paid activities, according to an OECD report on economic outlook released in May 2019.
The International Labour Organization predicts India will have 18.9 million jobless people in 2019. Even as India’s economy is projected to grow 7.5 per cent by 2020, will this growth translate into jobs?
Santosh Kumar Gangwar, who took charge as the Minister of State (Independent Charge) for Labour and Employment in the newly elected government, has a tough job ahead.

The latest Periodic Labour Force Survey (PLFS) states that the unemployment rate (UR) in both rural and urban India is at its highest since 1972.
The unemployment rates among men and women in both rural and urban groups, are also the highest ever. The increase in the UR is more than three times among rural men and more than double among rural women according to the usual status since 2011-12.
In urban areas, the UR among men is more than twice and has increased twice among women since 2011-12. It is to be noted that the UR between 1972 and 2012 was almost static or did not have many differences (See Table 1). Besides, the UR rose sharply among youth of ages between 15-29 years and those who got better education.
The measurement of unemployment is based on the Usual status and Current Weekly status. The Usual Status (ps+ss) approach to measuring unemployment uses a reference period of 365 days i.e. one year preceding the date of the survey of the National Sample Survey Organisation (NSSO) for measuring unemployment.
The Current Weekly Status (CWS) approach to measuring unemployment uses seven days preceding the date of survey as the reference period. A person is considered to be employed if he or she pursues any one or more gainful activities for at least one hour on any day of the reference week.
The Union Ministry of Statistics and Programme Implementation had constituted PLFS under the chairmanship of Amitabh Kundu. The data was collected by NSSO from July 2017 to June 2018. The survey was spread over 12,773 first-stage sampling units (7,014 villages and 5,759 urban blocks) covering 1,02,113 households (56,108 in rural areas and 46,005 in urban areas) and enumerating 4,33,339 persons (2,46,809 in rural areas and 1,86,530 in urban areas).
The unemployment rates in urban areas are higher than those in rural areas. In rural areas, the UR is 5.3 per cent, whereas in urban areas, the UR is 7.8 per cent according to the usual status. The overall unemployment rate is 6.1 per cent in India according to the usual status. According to CWS, the rural employment rate is 8.5 per cent whereas the urban rate is 9.6 per cent. The overall unemployment rate is 8.9 per cent.
In urban areas, the unemployment rates for females are higher than those for males.

Table 1: Unemployment rate (in per cent) according to the usual status and current weekly status from 1972-73 to 2017-18
 

Table 2: Unemployment rate (in per cent) among youth (15 to 29 years) in usual status during 2004-05, 2009-10, 2011-12 and 2017-18
The unemployment rate among youth between 15 and 29 years has risen sharply since 2011-12. Among rural males and females, the UR is almost three times since 2011-12, whereas among urban males and females, this rate is more than double.
The UR has also sharply increased among those who are more educated. Since 2011-12, the UR among rural males has increased by almost three times, from 1.7 per cent to 5.7 per cent. Those who have higher degree of education and those who are completely not-literate have witnessed almost the same level of unemployment.
Interestingly, unemployment among rural not-literate females has reduced and among urban females, the number of those who are literate up to primary-level jobs, is the same as 2011-12. (See table below)

Table 3: Unemployment rates (in per cent) according to usual status for the persons of age 15 years and above with different educational attainments during 2004-05, 2009-10, 2011-12 and 2017-18
Among social groups, the highest UR is among the ‘General’ or ‘Others’ category — 6.7 per cent. This groups is followed by Schedule Castes (6.3 per cent), Other Backward Classes (6 per cent) and Scheduled Tribes (4.3 per cent).
Among religious groups, Christians have the highest UR in both urban and rural areas. In rural areas, Christians have a UR of 7.4 per cent, Muslims have a UR of 6.5 per cent, Sikhs 6.3 per cent and Hindus 5.2 per cent.
In urban areas, Christians have a UR of 11 per cent, Sikhs 9.1 per cent, followed by Muslims 8.5 per cent and Hindus 7.6 per cent.