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Despite its world-beating growth, India’s youth are in danger due to a lack of jobs.

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The city of Mumbai was the subject of a news report by Reuters. Nizamuddin Abdul Rahim Khan, a 23-year-old individual, is playing cricket on a muddy unpaved road located in the Rafiq Nagar slum situated in Mumbai, which is India’s financial capital, during a hot summer afternoon.

Limited evidence is present in this location to indicate the rapid expansion of India’s economy.

Rafiq Nagar and its adjacent areas, previously used as Asia’s largest garbage dumping ground, are presently inhabited by approximately 800,000 individuals. Most residents reside in cramped quarters along dimly lit, narrow passageways.

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According to Naseem Jafar Ali, an NGO worker in the area, the youth population faces challenges securing employment opportunities. As a result, they tend to spend their time idly.

The COVID-19 pandemic led to a significant increase in urban unemployment in India, with a peak of 20.9% in the April-June 2020 quarter. A decline in wages accompanied this. Although the availability of full-time jobs has decreased, the unemployment rate has also decreased.

According to economists, an increasing number of job-seekers, particularly the youth, are seeking low-paying temporary employment or resorting to precarious self-employment, even though the wider Indian economy is projected to grow at an impressive rate of 6.5% in the fiscal year concluding in March 2024.

With over 1.4 billion people, India is poised to surpass China as the world’s most populous nation. Approximately 53% of individuals within this demographic are under the age of 30, which is often referred to as the demographic dividend. However, tens of millions of young people are negatively impacting the economy due to a lack of employment opportunities.

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The issue of unemployment represents merely the visible manifestation of a larger, underlying problem. According to Radhika Kapoor, a fellow at the economic research agency ICRIER, a significant crisis of underemployment and disguised unemployment remains concealed.

Khan works as a casual laborer for home repairs or construction, earning a monthly income of approximately 10,000 Indian rupees ($122). He utilizes this income to support his father and four sisters. The individual stated that obtaining a permanent job would resolve any issues.

India’s economy faces a potentially vicious cycle of risk. India’s prospects for generating employment opportunities for its expanding and youthful population are being hampered by declining employment rates and earnings, impeding its ability to drive the economic growth required to achieve this objective.

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According to economist Jayati Ghosh, the country’s demographic dividend is a potential threat that is waiting to explode.

She expressed concern regarding the many educated individuals who have invested significant amounts of personal or familial funds into their education yet cannot secure suitable employment opportunities. This situation is alarming.

The issue at hand is not solely related to the potential economic loss but rather the impact on a generation that has been lost.

Small businesses experience a cessation of operations.

In India’s urban areas, unemployment is a more pressing issue due to the high cost of living and the absence of a job guarantee program available in rural regions provided by the government. Despite the prevailing conditions, many individuals from the rural unemployed demographic continue to migrate toward urban areas in search of employment opportunities.

According to government data, the percentage of urban workers with full-time employment decreased from 50.5% just before the pandemic to 48.9% as of December 2022, despite urban unemployment being at 6.8% in the January-March quarter.

Out of the approximate urban workforce of 150 million, only 73 million individuals hold full-time employment.

According to the latest government data available for the April-June 2022 quarter, individuals residing in urban areas with full-time employment earned an average monthly wage of 17,507 rupees ($212) when adjusted for inflation.

The figure recorded was a 1.2% increase from the October-December 2019 period before the pandemic’s onset.

According to a study by Ghosh and C.P. Chandrashekhar from the University of Massachusetts, Amherst, self-employed individuals have experienced a decline in their earnings to 14,762 ($178.67) rupees during the April-June 2022 quarter. The value amounted to 15,247 rupees during the October-December quarter of 2019.

According to Ghosh, a significant event is the downfall of small enterprises, which were the primary source of job opportunities.

According to the user, the small business sector has faced challenges since the Indian government demonetized 86% of the country’s currency in circulation in 2016. The recent pandemic has further exacerbated these challenges.

According to the government’s statement in February, 10,000 micro, small, and medium enterprises ceased operations from April 2022 to March 2023. During the preceding year, 6,000 units of such nature had ceased operations. The government did not specify whether any new enterprises were established during those time frames.

A painter who has completed a graduate degree program.

In Khan’s locality, which is representative of the urban expansion in a city with a population of 21 million, several households have experienced a reduction in earnings and employment opportunities in the recent past. Individuals in the early stages of their careers are at a higher risk of being susceptible to negative outcomes.

A 22-year-old student named Arshad Ali Ansari reported witnessing his siblings losing their jobs in the early stages of the pandemic.

Ansari reported that he and his family of eight reside in a single room with an attached kitchen. They exist on the monthly income of his 60-year-old father, which amounts to approximately 20,000 rupees.

The subject’s sibling, possessing a degree and prior experience in the banking industry, became unemployed due to the pandemic and subsequently began working alongside their father in house painting.

According to Ansari, his brother possessed both education and experience.

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