Modi had promised to create more jobs when elected in 2014
Mumbai: The biggest economic challenge India facing is unemployment of youths, opined a group of economists at a poll conducted by wire agency Reuters. However, they hope that world’s most populous country will grow at a healthy rate of 6.5 per cent this fiscal.
Unfortunately, though growing much faster than other Asian peers, the country has miserably failed to generate enough jobs for its large and fast growing young population, a key issue in the ongoing election to select the next national government.
Majority of the economists, 15 of the 26 participated in the poll held from April 16 to 23, are of the view that unemployment will be the biggest challenge for the new government coming to power after the polls.
“Following a decade of near jobless growth, the rising number of discouraged workers had pushed India’s LFPR (labour force participation rate) down well below levels exhibited by the four Asian tigers at comparable stages in their demography,” said Kunal Kundu, India economist at Societe Generale.
“Bharatiya Janata Party’s focus on existing employment drivers (infrastructure, manufacturing, and government jobs) that have not moved the needle much to date is all the more worrying. Without a more concrete plan, India runs the risk of missing out on potential demographic dividends.”
Prime Minister Narendra Modi’s BJP, widely expected to return to power for a third straight term, had promised to create more jobs when elected in 2014.
Despite that promise, the unemployment rate over recent years indicates not enough jobs have been added to make a significant difference. Periodic Labour Force Survey data showed the unemployment rate which stood at 3.4 per cent in 2013-14 was only marginally lower at 3.2 per cent in 2022-23.
According to the Centre for Monitoring Indian Economy, an economic think tank, the unemployment rate was 7.6 per cent in March.
Although job creation has stayed lacklustre, the government ramping up of capital expenditure helped the economy grow a faster-than-expected 8.4 per cent in the October-December quarter.
The economy likely grew 6.5 per cent last quarter and 7.6 per cent in the previous fiscal year that ended on March 31, the survey showed.
