213 million Indians will be unemployed by 2020

NEW DELHI (IANS) August 16,2006

A national report on the employment situation in India has warned that nearly 30 percent of the country’s 716 million-strong workforce will be without jobs by 2020.

The report prepared by the recruitment agency TeamLease Services said that the shortage of employment in India can trigger many social security problems as the bulk of the unemployed - 85 to 90 per cent - will be in the age group of 15-29.

The study titled India Labour Report presents the shortage of jobs as the flip side to the much-touted young workforce in the country. It said 213 million Indian without jobs would be a huge task for the government to manage.

It said the quality of those employed in the future is not very encouraging as only 88 million will be graduates, while another 76 million will have passed their senior secondary level.

The bulging population and the expanding workforce will require about 15 million new jobs every year, against the 10 million new jobs being projected by the government.

The scarcity of job opportunities in the organised sector is likely to create a major shift towards the unorganised sector, which is already expanding and absorbing additional workforce.

Of India's 402 million-strong workforce, only about 7 per cent is in the organised sector.

The unorganised sector is absorbing more labour and has improved upon its '80s pace of 29.62 per cent growth to 30.29 per cent in the '90s.
The organised sector, which is under the purview of labour laws, remains more rigid than the unorganised sector, which remains outside the reach of most labour laws.

The report estimates the annual financial "damage" to the exchequer due to the unorganised sector's leakages in terms of tax revenues at 32 per cent of the total manufacturing sector GDP at Rs 162,000 crore (Rs 1620 billion).

"Unfortunately, labour legislation has been hijacked by a small minority of organised labour," says Manish Sabharwal, chairman, TeamLease Services. The report lays stress on reducing unnecessary state intervention and over-legislation in the field of labour.