Until recently, due to its large working population, India was touted as one among few countries that enjoyed a ‘demographic dividend’. But
with one of the fallouts of the global crisis being job losses, this could become a demographic nightmare.
With most of the ‘officially reported’ 500,000 job losses during the last quarter exports related, both the fiscal stimulus packages implemented so far lay a special emphasis on exports. While the government has increased outlays for its social sector schemes, which will boost rural employment, more needs to be done on the urban front.
While India’s unemployment rate is 8.3%, similar to most developing economies is the concept of disguised unemployment (i.e. more people are engaged in an activity than those actually required, which is commonly seen in agriculture).
The organized sector accounts for less than 10% of total employment: Despite a workforce of 402m, the organized sector (i.e. those receiving provident fund/social security benefits) comprises less than 10% of the total. While the government was able to meet its 10th Plan estimate of generating 49m new jobs, given the current global downturn, the prospects of meeting the 11th Plan estimate of 58m incremental jobs are not as bright.