Updated: December 30, 2019 10:24:13 am
I was a marginally above-average student in both school and college. All I had on passing out was a second class Bachelor of Arts (Honours) degree in economics from Delhi University. But I was lucky to enter the job market that was just starting to boom. It was a rising tide that lifted all boats, including people like me.
The Nineties, Noughties and the first half of this decade were a great period for enterprise and employment. A host of industries, both new and old, grew: IT, media, advertising, financial services, accounting, telecom, aviation, hospitality, restaurants, auto, pharma, healthcare, education, construction, real estate, organised retail and food processing. Even agriculture did well as farmers diversified beyond foodgrains to horticulture, dairying and poultry, while embracing new technologies such as hybrid seeds (especially in vegetables and maize), Bt cotton, tissue-culture planting, drip irrigation and laser leveling. As all these sectors thrived, jobs were aplenty, even for those passing out of ordinary private engineering colleges or science and arts graduates.
Simply put, if India’s first middle class was created by the public sector, the second one was largely a product of private enterprise, unleashed after the economic reforms of 1991. While many of our parents were government employees, we are the beneficiaries of growth and investment activity in the first 25 years or so after liberalisation.
The significant point to note, however, is that the boom in jobs during those 25 years did not happen at a time of a “bulge” in India’s working-age population. That, if anything, is taking place now when there aren’t too many new jobs and even the existing ones are under threat.
According to the United Nations population database, the proportion of Indians aged between 20 and 59 years — those one would consider to be the most active work seekers — actually fell from 46.9 per cent in 1950 to 45.8 per cent in 1990. It rose thereafter to 51.7 per cent in 2010. But, the real bulge is yet to come: The ratio of those aged 20-59 years to the country’s total population is projected to rise to 54.6 per cent in 2020, peaking at 56.7 per cent in 2035.
In other words, the challenge of finding jobs would be far greater for my niece and daughter than for me, despite them being smarter and brighter, unless the economy churns out jobs like it did in the two decades or more from when I joined the workforce in 1991.
There are many who believe that India is on the cusp of a demographic dividend which comes with the share of any country’s working-age population exceeding that of its non-working-age population. The more the number of people in a position to work and earn, not only are there lesser numbers to support — those either too old or too young — but also, greater is the potential for savings from the generation of income. As those savings are directed to finance investments, a virtuous cycle of growth is set in motion. This was seen, for instance, in Japan, and more recently in China.
The Japanese economic miracle from the mid 1950s to the late 1970s happened when the median age of its population ranged between 23.6 and 32.5 years. The median age of China was 21.9 years in 1980 when its growth story took off, and rose to 35 years in 2010, by which time the peak was over.
Meanwhile, Japan’s demographics had worsened — the median age reached 41.2 years in 2000, rising to 44.7 years in 2010 — reflecting in its economic performance.
In India’s case, the tipping point of the proportion of the population aged 20-59 years crossing 50 per cent was reached in 2010. The median age, too, that year was just 25.1. Moreover, it is projected to hit 30 years in 2025 and reach 35 years only by 2040. Logically speaking then, this decade, and the next two as well, ought to have been India’s, just as the 1950s to 1970s was Japan’s and the 1980s to 2000s China’s. But it hasn’t been, at least so far.
Much of this decade has been a lost one and is ending even worse than when it began. The part about a flood of young men and women entering the labour market is certainly true; you can see and feel it by simply taking a Delhi Metro train ride. This youth bulge, though, is yet to deliver the promised demographic dividend that Japan, China or the East Asian economies successfully harnessed in their time. On the contrary, the cohort of young people of my generation found productive employment and experienced upward mobility far more than the ones who have come out of college or have migrated from the hinterlands in the present decade. And the irony is, we did well even before the golden age of growth, resulting from favourable demographics, was supposed to have dawned on India.
The ongoing protests against the Citizenship Amendment Act are a manifestation of the pent-up frustration of our millennials/Gen Z at what they clearly perceive is a bleak future. We saw it initially in the Jat, Maratha, Patidar and Kapu agitations, demanding reservation in government jobs and education institutions from around 2015, which also coincided with the deepening of the crisis and the lack of upward mobility options within agriculture. The current protests are, by contrast, not confined to any particular community or sector. Their universality derives precisely from the fact that the economy is today faced with a general growth slowdown sparing no sector or industry.
Two things must be borne in mind here. The first is, of course, diminishing employment opportunities in government. The organised public sector workforce fell from a high of 19.56 million in 1996-97 to 17.61 million in 2011-12 (we have no published data for subsequent years).
The second is an even more profound crisis: The collapse of enterprise. Some of that may have to do with the legacy of the twin balance sheet problem, of debts accumulated by private corporates during the investment boom of 2004-11 turning into bad loans of state-owned banks. But, far from fixing the problem, the current regime has worsened it by subjecting the economy to successive shocks — demonetisation, the goods and services tax, cattle slaughter restrictions, and now, uncertainty over citizenship, whose impact on investor and consumer sentiment is not to be underestimated.
Unfortunately, it is the young, vibrant and energetic generation of job-seekers who are bearing the brunt of all this. The least the government can do is to listen to them. They aren’t on the streets for nothing.
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