Economists associated with the government have been arguing that there is not much unemployment since enough employment is being generated. Further, they argue that the employment required to be generated annually is not too much. Bibek Debroy, Chairperson of the Prime Minister’s Economic Advisory Council, wrote in an article in The Indian Express that analysts are ignoring the drop in the population growth rate from 1.5% earlier to (possibly) 0.8% now. He asks “…how many jobs India needs to create every year.” He says, “When one encounters figures like 10 million or 12 million, one often doesn’t realise these are dated figures…circa 2003-04”. He suggests, “A rough range might be 5 [million]-8 million.”
Labour force
His statements reflect the thinking of the government and need to be analysed. First, how is the current population growth rate relevant to the present increase in the labour force? The labour force comprises those in the age group of 15-64 (International Labour Organization definition) who are looking for work. The current population increase will impact the labour force 15 years later when those born this year will potentially join the labour force. So, even though Mr. Debroy discounts circa 2003-04, children born then are precisely the ones who have been entering the labour force since 2018-19 after obtaining a high school degree. In 2020-21, those obtaining an intermediate degree could have joined. And so on.
