Job Crisis Begins in India as Unemployment Rate Increases by 23% Amid Lockdown

Unemployment is another major crisis of growing India. According to the International, Labor Organisation unemployment rate in India is showing an increasing trend since 2011 when it was 5%.The same rose to 6% in 2012 and climbed to 7% in 2013.A large pool of youth in the age group of 18 -25 years despite being skilled are facing unemployment issues.

The youth unemployment rate refers to those in the workforce who are aged 15 to 24 years and without a job but actively seeking one. Generally, youth unemployment rates are higher than the adult unemployment rates, and India is no exception: youth unemployment in India is significantly higher than the national unemployment rate.

Apart from the rising overall unemployment rate, the increase in youth unemployment has also drawn attention. According to the data, youth unemployment reached 22.6% in September, up from 20% in the same period last year. The jobless youths numbered some 1.16 million, or nearly a third of the country’s unemployed.  estimate that overall unemployment might reach 14-15%, and youth unemployment might hit 23-25% amid the crisis.

India’s unemployment rate, in general, is not remarkably high when compared to those of other countries. Both India’s unemployment rate and youth unemployment rate are below their global equivalents. In a comparison of the Asia-Pacific region countries, India ranks somewhere in the middle, with Cambodia’s unemployment rate being estimated to be below one per cent, and Afghanistan’s the highest at 8.8 per cent.

In India, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. This page provides - India Unemployment Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. India Unemployment Rate - actual data, historical chart and calendar of releases

There were approx  4,900 jobs created in March (like mgnrega , NREGA etc )  but the trend rate of unemployment increased. Moreover, the rate of long-term unemployment is increasing quickly, exposing the labour force to hysteresis. This week also saw the IMF release their latest World Economic Outlook, with the global economy forecast to grow at 9% in 2019. However, the lingering effects of the Global Financial Crisis could prevent this growth from eventuating.

The financial crisis also impacted the global unemployment rate. In 2009, the global unemployment rate jumped to around 6.2 per cent, and it is not expected to recover to pre-crisis levels anytime soon.: In 2008, the unemployment rate in India was around 8.4 per cent, much higher than the global unemployment rate for the same year. It has, however, now decreased significantly, even though it is still not below the global level, the country itself has reached lower levels than before the crisis.

Demand-side factors: Youth unemployment rates are very sensitive to the level of aggregate demand, and thus the pace of economic growth in an economy. As such, youth unemployment rates are usually the first to increase when aggregate demand in an economy cools. Additionally, potential mismatches between the demand and supply side of the labour market have contributed to higher unemployment rates, and this is especially true for new labour market entrants like the youth.

Job scarcity coupled with job instability has resulted in higher unemployment rates and growing numbers of youth emigrating for job opportunities.  While on one hand, migration can be the consequence of lacking appropriate job opportunities for youth, on the other it can provide an effective response to the challenge posed by the growing populations of unemployed youth in the countries of West and