Violent protests by job seekers that gripped two Indian states this week have turned the spotlight on India’s unemployment crisis, especially among young and educated people, economists say.

Angry mobs burned train cars and tires, and blocked rail traffic in Bihar and Uttar Pradesh, two of India’s most populous states, over alleged flaws in the recruitment process for jobs in the government-run rail sector.

They complained of lack of transparency and said that the process unfairly gives an advantage to graduates applying for low-skilled jobs.

There were more than 12 million applicants for the 35,000 openings, reflecting the acute job scarcity. Even before the pandemic battered the economy, unemployment was running at a four-decade high, reflecting the inability of the job market to cater to the more than 10 million new applicants every year.

The situation has worsened in the last two years even though the economy is recovering. It is most stark in states such as Bihar, where the unemployment rate is double the national average. One of India’s least developed states, it has very few avenues for private sector employment, which is why government jobs that are better paid and offer security are highly prized.

Among the applicants for a rail sector job is Guddu Kumar Singh, a 32-year-old resident of Bihar, who has spent nearly 15 years applying unsuccessfully for a variety of government jobs. After failing to make the cut for a clerk in the Indian army after graduating from high school, he focused on improving his educational qualifications and earned a degree in economics — he and his brother were the first generation in his farming family to get college degrees. Like millions of others, the family saw education as the path to a brighter future.

“I was a sincere student – I spent 13, 14 hours a day studying to get my degree. I was so positive. I never thought I would not get a job,” Singh said. “I am totally dejected. My family also asks me, what did I achieve by studying?”

According to the Center for Monitoring Indian Economy, an independent think tank, India’s unemployment rate was nearly 8% in December. It says, however, that this number does not reflect the true scale of unemployment in India because millions of educated people have stopped looking for jobs.

They are people like Singh — if he does not get a railway job he could simply drop out of the job market, returning to what he has been doing while he searched for a job – tutoring school students.

“Unemployment is higher among younger and more educated people because appropriate jobs are not available,” economist Arun Kumar, a former professor with New Delhi’s Jawaharlal Nehru University, said.

“The organized sector barely generates about 300,000 jobs a year, so where do the other aspirants go? There is a crisis of unemployment.”

The huge gap between supply and demand has resulted in qualified people taking jobs of much lower skills.

Earlier this month, graduates, post-graduates, engineers, and civil judge aspirants were among the more than 10,000 young people who turned up for interviews for 15 government jobs such as drivers and watchmen in the central state of Madhya Pradesh, according to a report by local broadcaster NDTV.

Economists say that part of the problem is that, unlike several other Asian countries, India never created a large-scale manufacturing sector — its growth is being powered by its booming services sector, which creates fewer jobs.

The government says job creation is a priority – in recent years, it has been trying to pitch India as an attractive investment destination to woo global manufacturers. Those efforts have intensified since the pandemic as India eyes the opportunity of luring companies that are looking to move some manufacturing out of China.

“India is committed to becoming a trustworthy partner for the world’s global supply chains,” Indian Prime Minister Narendra Modi told a virtual meeting of the World Economic Forum earlier this month. “We are making way for free trade agreements with many countries. India’s capacity to adopt to innovative technologies and its spirit of entrepreneurship can give new energy to all our global partners. This is why now is the best time to invest in India.”

Economists like Kumar, though, point out that even if India is able to attract companies to set up factories, modern manufacturing generates far fewer jobs than it did in the past because of automation.

“India must invest more resources in more employment-intensive sectors like health and education that provide jobs for more qualified people like teachers, nurses, technicians,” he said. “The frustration among the young and educated is boiling over.”

Indian commentators have called the recent protests a wake-up call in a country where half the population of 1.3 billion is under 25. The Indian Express newspaper said they were a “sobering message.”

The government has suspended the examination for rail jobs and said a committee has been formed to investigate candidates’ concerns.

For those like Singh, who sees it as his last chance to secure employment, the uncertainty is unbearable.

“I feel really anguished when I think of the years I spent getting a college degree. If I had spent the same time doing something else, I would have had better earnings.” 

 
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