Any Jobs For India’s Youth Post-COVID? Is the Govt Doing Enough?
As much as India is struggling to find employment for its youth, companies are struggling to find skilled personnel.
When big convulsive economic events like COVID-19 happen, the implications tend to take years to play out. And no one can exactly predict the long term impact such events may lead to. For example, an indirect consequence of the late 1920s Great Depression was a rise in fascism across the western world, and World War-I and the 1918 flu epidemic led to the replacement of the British pound with the American dollar as the world’s preferred currency. So, I do not think anyone can accurately guess the impediments to the ‘status quo’ that are set to take place across the globe.
But, one thing is certain, in the short term, this crisis is going to lead to massive job losses, furloughs, and young people are likely to bear the brunt. In particular, fresh graduates who were hoping to join the workforce. Even before the crisis, youth unemployment was becoming a big headache for leaders across the world., and this pandemic has only exacerbated the problem. This issue is set to have a profound impact in a country like India, where about 30 percent of the population, numbering 39 crores, are aged between 15-29 years.
Students Have Education Loans to Pay Off – What’s Going to Happen in Post-COVID Situation?
Come June, like every year, scores of Indian youth, numbering around 10-12 million, will enter the workforce. However, even before the coronavirus pandemic, India was grappling to provide her youth with proper employment opportunities. In fact, our pre-crisis unemployment figure was the highest in the last 45 years, and the highest NPAs were registered by banks in the education sector in terms of loans. COVID-19 has only aggravated the situation.
That’s why the government should not remain oblivious to the problems faced by scores of Indian youth. If the government fails to act on this, millions of families risk being financially wiped out. To address this imperative, I propose a three-level policy solution that caters to -the short term, medium-term and long-term requirements:
In the short term, the government should provide a loan relief package – by which the loan repayment for unemployed graduates of 2018/ 2019 can be deferred by at least two years.
The total value of loan dispersed in 2018/2019 amounts to Rs 42,500 crores. So, in the worst case scenario, the amount which the government will have to forego is Rs 8000 crores, which amounts to just 0.3 percent of our annual budget.
Another necessary intervention in the short term is to pursue an expansionary fiscal policy with an emphasis on job creation. The first intervention in this direction would be to increase short term consumption – reduction in taxes for those in middle income groups – would act as a catalyst in propelling consumption; the second intervention would be to increase government expenditure on public infrastructure projects – but the problem with this sector is the long delay in obtaining relevant approvals.
Govt Must Give Loan Packages & Funds – Especially to MSMEs & Startups
More than 30 percent of the infrastructure projects in India have been delayed by over 12 months. So, if the government fails to kick-start its infrastructure projects straightaway, then we risk losing any potential advantage that would result in terms of employment generation. For the sector to have an immediate intended impact, the government should analyse the impediments that prevents timely completion of infrastructure projects, and help overcome the same.
As evidenced by OECD (2013) report, job creation is fostered by small fledging firms and MSMEs; therefore, the government should announce loan packages and funds specifically aimed at MSMEs and startups.
In the medium term, the first intervention from the government would be to increase its expenditure on education.
Why Spending on Education Will Never Be a Loss to Exchequer
Education is a public good, and expenditure on education comes with lots of positive externalities. Better employed people pay higher taxes, and in case of brain drain, we have remittances coming in from those who are abroad.
Therefore, expenditure on education is never a loss to the Exchequer.
As of 2019, the central government’s expenditure on education stood at 3 percent of India's GDP, but in comparison, the OECD countries on average spent 11 percent of their GDP on education.
The expenditure has to be gradually increased to the levels of OECD countries.
Only 30 Out of 100 Students in India Finish School
The second intervention would be to focus on ramping up our skills training and vocational training initiatives. As much as India is struggling to find employment for its youth, the companies are struggling to find people with the right skills. For example, only 4.5 percent of the Indian population is skilled as against 68 percent of British and 75 percent of the German population. India's much-famed skills mission, PMKVY, has failed miserably; now is the right time to overhaul the same and take a more nuanced approach.
It is high time India emulates successful global models of skills education – such as those in Germany and the UK. Germany, through its Vocational Education and Training (VET) programme, has managed to maintain one of the lowest unemployment rates in the world. The government could adopt elements of the German VET system for the Indian situation.
In India, only 30 out of 100 students manage to complete school, others either remain unemployed or underemployed.
What Is Govt Doing For School Dropouts?
The government should create pathways to success for these school dropouts, whereby they could be provided training in specific skills, say, for example, carpentry. The schools and universities should start inculcating special training programs on entrepreneurship – the annual job creation survey by the World Economic Forum identified that startups were 50 percent more likely to expand their workforce than established firms.
Besides, the government should establish incubation programs that will hire and train young people; the university curriculum should be encouraged to give importance to on-job training programs, for example, ‘career internships’. In Italy, students aged 15-18 can enrol themselves in assessed apprenticeship programs with established organisations.
What About ‘Disappearing Jobs’? How Will India Deal With Jobs Replaced By AI?
In the long term, we need a paradigm shift in our education system. We need our schools and universities to emphasise on critical thinking, creativity, communication skills, and emotional skills (EQ), however, instead, our academic institutes focus on rote learning, and train our pupils for jobs that risk being obsolete. As per the OECD report, it is touted that 46 percent of the existing jobs would either completely disappear or radically transform.
Therefore, India will have to come up with policies that will mitigate the adverse impacts associated with AI in the long run.
One step in this direction would be to start giving impetus to areas that would be in higher demand – for example: Physical Therapist Assistants.
Lastly, our rural education centres lack quality – over the past one decade, only about 25 percent of children enrolled in Class V could read simple English sentences, and only 26.1 percent of children enrolled in Std V could do basic arithmetic. When Indian students last tested for OECD PISA test, they were ranked second from the last.
Education Policies Should Shift from ‘Teacher-Driven’ to ‘Child-Driven’
The government should shift its focus from transmission of knowledge to social construction of knowledge, and emphasise upon new roles for teachers. Since not everybody learns at the same pace, the policy should move from teacher-driven to child-driven. The most effective way of tackling the above mentioned challenges is to learn from best practices – one such best practice is Escuela Nueva. It has led to a massive success in Colombia alone, covering more than 20,000 Escuela Nueva schools. This pedagogic approach helped Colombia to solve its rural education problem – as the model emphasises upon teaching and community engagement. The government can emulate the same for India’s rural areas.
Thus, it is the responsibility of the government to act as tutelage to the youth of our nation and enable them to find a better future. If the government does not act with alacrity, we risk losing out on one of our biggest strengths – the demographic dividend.
(Dharanidharan holds an MBA from the University of Oxford, and an MPA from Sciences Po, Paris. He runs a consulting company that advises Indian Governmental Organisation and International Organisations. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.