Understanding the Unemployment Predicament in India: Reasons and Solutions

Key take:

1. The rising unemployment situation in India is a result of unsound economic strategies, slow growth sectors, lack of quality jobs, and inefficient use of resources, among other factors.
2. Changing the scenarios is a long haul, riding on capital expenditure in the productive sector, innovations in education, fostering service sector jobs and talent retention.
3. Individually, Indians can leverage on continuous upskilling, getting involved in small businesses, and cultivating an entrepreneurship mindset towards wealth creation.

Why Unemployment is Soaring in India

First, a look at the core reasons why unemployment is a major issue in India:

1. Traditional growth sectors like IT and Manufacturing have witnessed steady decline in job generation. For instance, major IT firms cut jobs in 2023-2024 except for TCS. Conversely, the manufacturing sector hasn't shown significant growth over the past few years.
   • A case in point is the startup domain. Amid decreasing venture capital funding, startups have had more focus on profitability rather than high hiring numbers, hurting job creation.
2. Disparity in the employment rate between Public Sector Undertakings (PSUs) and private firms. PSUs typically hire more employees, but with the government divesting its stake in PSUs, private firms need to step up to balance the employee to market capital ratio.
   • An example is the contrast between jobs in State Bank of India and private sector firms like Adani. The former offers more jobs despite having almost double the market capital.
3. The majority of India's labor force is involved in unorganized sector jobs. Statistics show that over 90% of Indian workers operate in the informal sector, limiting opportunities for organized labor.

Can Unemployment Situation Change in India?

A sobering fact in India's unemployment issue is the declining labor force participation rate. Four major factors influence the continuous decline for both males and females in rural and urban areas:

1. Inefficient Capital Expenditure: Reserved funds for improving Healthcare and Education systems (productive sectors) remain underutilized, stalling overall growth.
2. High Compliance Cost for Small and Medium Enterprises (SMEs): SMEs traditionally drive job growth. However, high taxes and varying compliance regulations have throttled their potential to flourish.
3. Focus on Manufacturing over Service Sector Jobs: As a direct result of high real estate costs and black money influx, manufacturing is less lucrative than service-oriented industries. Investments in service sector jobs can trigger an exponential economy shift.
4. Inability to Retain Talent: The lack of high paying jobs in India compels highly skilled and qualified individuals to seek opportunities abroad, hitting hard on the nation's talent pool.

Surviving the Unemployment Bubble in India

Despite the grim unemployment situation, individual measures can help navigate the crisis:

1. Apprenticeship Based Model: You can approach leaders in your field of interest via platforms like LinkedIn and request to work on practical projects with them.
2. Institute Reward System: Educational institutes should be made accountable to ensure job placement for its students. If they fail in their promise, a penalty mechanism should be put in place.
3. Entrepreneurship Mindset: Individuals are encouraged to start small, profitable businesses. Despite the often daunting hurdles of entrepreneurship, one can start small based on their skillset and resources.
4. Positive Mindset Towards Wealth Creation: Cultivating a positive mindset and taking inspiration from industry practitioners can help in learning from practical experiences. Avoid negativity and pessimism.

Remember, continuous upskilling and harnessing the power of education are crucial in this ever-evolving job market. A proactive approach towards your career can certainly help you stand strong in the face of a challenging economic environment.