Unemployment soars in Indian states despite claims of economic growth

India’s claims of being the world’s largest economy. However, unemployment and poverty have surged to alarming levels in several states, despite the country’s projected economic growth of 6.5% for the current fiscal year.

While the Modi government continues to tout economic growth, data from the Labour Force Survey has revealed widespread unemployment, undermining these claims. The report highlights that unemployment, particularly among youth, has reached critical levels.

In Kerala, the unemployment rate among young people aged 15-29 has risen to 30%.

Unemployment among women in the state stands at 47%, while the rate for men is 19%.

According to the Periodic Labour Force Survey (PLFS), overall unemployment has increased from 2.9% to 3.2% in 2023-24, with no significant improvement despite the government's promises.

The report also found that youth unemployment remains high in Kashmir, Nagaland, Manipur, and Arunachal Pradesh. Previous reports had already revealed that 83% of India’s unemployed population consists of young people, forcing many educated youth to take on low-paying jobs out of desperation.

Kunal Kundu, an economist at Societe Generale, expressed concern over the current government’s approach to employment, warning that India's focus on traditional job drivers like infrastructure and manufacturing may not be enough to address the issue. “Without a more concrete plan, India risks missing out on its demographic dividend,” Kunal Kundu said.

Despite the Bharatiya Janata Party (BJP) promising to create jobs in 2014, unemployment remains a persistent issue.

Data from the Periodic Labour Force Survey showed that while the unemployment rate was 3.4% in 2013-14, it had only marginally decreased to 3.2% in 2022-23. The Centre for Monitoring Indian Economy reported that the unemployment rate stood at 7.6% in March 2024.

However, fiscal prudence may limit the boost in growth, warned Alexandra Hermann from Oxford Economics, adding that last year’s growth was largely driven by government spending.

Research indicates that nearly 70% of construction workers in India are working at minimum wage due to unemployment pressures. Many citizens, frustrated by joblessness, have resorted to illegal migration to the US and UK. The rising unemployment has also led to a surge in human trafficking.