20 August 2017

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Entrepreneurship: A tool to eradicate unemployment

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The unemployed youth is considered as a disruptive force of the nation. While the India’s GDP growth rate has reached up to 7.6% in the year 2015-16, jobs have increased by just 1.1% in the year 2015-16, according to the Labour Bureau’s 2016 report covering eight key sectors of the non-farm economy.

Clearly, rise in economic growth rate does not render itself to creation of job opportunities. Unemployment rate in India has shot up to a five-year high of 5 per cent in the year 2015-16. Is this the era of ‘Jobless growth’? The discussion about ‘Jobless growth’ came up in the 2000s when the economy was rising at 8% but with a seemingly small increase in employment.

According to NSS report (2012), persons aged 15-29 years, who were considered as youth, accounted for 26 to 29 per cent of the total population in India. According to a recent study conducted on “Changing profile of unemployed and underemployed in India”, it was found that more than 60 per cent of the total unemployed were youth (age 15-29 years) and the percentage of those reached to 82.6 per cent in 2011-12. It was also revealed that maximum numbers of unemployed lying in the age group of 19-24 years, are those who have attained secondary education and above. Further, the unemployment was highest among those who did not attain any technical education or cleared courses that are directly results in employment. Thus, the study highlights that unemployment among youth increased irrespective of the level of education received. The major cause for large-scale unemployment of various kinds is not only absence of jobs but absence of employability skills among the educated youth.

Surprisingly, the results burst the bubble that educated people are unlikely to be unemployed. Earlier, a degree was considered as a passport to suitable employment, but in this era of joblessness, even an advanced degree cannot guarantee a rightful employment. In this contemporary scenario of jobless economy, we are no longer distraught by the fact that several lakh job aspirants applying for few hundred junior-level job applications. Such a dismal state of affairs in the job market does not only disempower the youth but also call for societal reforms at various levels.

As per National Sample Survey Office data, the number of persons in the workforce increased from 398 million in 1999-2000 to 458 million in 2004-05, an increase of nearly 60 million (nearly equally divided between the agriculture and non-agriculture sectors) or 15 per cent in five years. This increased further to 473 million in 2011-12, an increase of 15 million or 3.3 per cent over a span of seven years. Over the years, there was a decline in the workforce in the agriculture and allied sector by over 36 million between 2004-05 and 2011-12. On the other hand, the number of persons in the workforce in the non-agriculture sector increased by 51 million with industry and services contributing nearly 31 million and 20 million respectively. The results indicate a revival in employment growth in manufacturing from 11 per cent in 2009-10 to 12.6 per cent in 2011-12. This is significant given that the National Manufacturing Policy 2011 has set a target of creating 100 million jobs by 2022. Promoting growth of micro, small, and medium enterprises (MSME) is critical from the perspective of job creation and has been recognized as a prime mover of the development agenda in India.

Skills gap and Inadequate learning facilities are the critical issues to be addressed. Instead of pushing the youth towards limited job options available in different sectors of the economy, we could encourage them to take up entrepreneurship and consider self-employment opportunities. Such new enterprises can in turn generate more jobs and address the gaps in a functioning market. Therefore, skill-based vocational training and entrepreneurial orientation can play as effective interventions. Such a training mission must be propelled by positive industrial growth and supported by an enabling environment involving stakeholders from various industries. Government also encourages innovation and entrepreneurship through various initiatives such as Make In India, Startup India, Digital India and other Skill-Development Training Programmes and Schemes. Through promoting novel ideas and facilitating disruptive technology that can be commercialized, government intends to promote job-creating entrepreneurs in the country. Concerted efforts from various change agents in the society towards full employment of the youth will save them from destructive mind-set.

Authors:

Dr. Monika Dhochak, Assistant Faculty & Dr. Satya Ranjan Acharya, Associate Sr. Faculty,  Entrepreneurship Development Institute of India, Ahmedabad

Last Updated ( Friday, 11 August 2017 13:00 )  



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