India’s millennials have been hit hard by the Covid recession

An unemployment crisis is crushing the country’s growth.

Indian students in New Dehli, July 2020. (Photo By Yawar Nazir/Getty Images)

Last August, Indore, a bustling city of two million people in India’s Madhya Pradesh state, earned the title of the country’s cleanest city for the fourth consecutive year. When I visited Indore in 2019, however, it wasn’t the clean streets I was struck by, but the hundreds of private coaching and test preparation centres attracting students from all over the country.

Part of a $7.5bn industry, these academies have been propelling increasing numbers of Indian students towards a limited number of government jobs and places at prestigious engineering colleges and medical schools. Jeet Singh, 24, has devoted three years following his engineering degree to studying full-time for the UPSC examination, a civil service exam which would enable him to join the Indian government as a bureaucrat. “By any means necessary, I need to find a government job. It’s the only way I will have stability in my life,” he told me over tea.

Singh’s story is far from unique. Over the last two years I have spoken to more than 900 of the country’s 440 million 25- to 40-year-olds as part of my research into the aspirations and anxieties of Indian millennials. What I found in nearly every town was a version of the same story: that India has a serious youth unemployment crisis on its hands.

In 2019, before Covid-19 brought global economic activity to a near standstill, data released by India’s Ministry of Statistics showed unemployment in the country was at a 45-year high. Unemployment among the well-educated was also at record levels: nearly three times the national average, according to a 2018 study by the Azim Premji University.

This has now been exacerbated by the fallout from the pandemic. The absence of uniform government data makes it hard to source exact unemployment rates, but an October-November 2020 survey of nearly 10,000 millennials conducted by Mint newspaper found 17 percent had lost their jobs since the pandemic began.

Many young adults around the world have faced huge job losses in the last year, but India’s lack of a safety net makes its youth particularly vulnerable to poverty and economic insecurity. “Other countries are ageing while India gets younger. This means that lower wages and a decline in economic productivity due to the pandemic will compound the magnitude of the problem in India,” the economist Radhicka Kapoor told me.

“Human capital accumulation, job growth, and skill development were all suspended during the pandemic,” Kapoor added. As millions lost their jobs, many had to turn to MGNREGA, a government programme that guarantees 100 days of unskilled manual labour in rural areas and pays roughly $3 a day. Almost 17 million new workers applied to access the programme between April and September 2020, and 60 million households participated in the programme during that period – the highest number in its 14-year history.

A visit to any town outside the country’s major population centres makes India’s unemployment crisis stark. Scores of young men, seemingly unemployed and disengaged from economic activity, spend their time in an activity so widespread it has earned its own term: “timepass”, or the act of killing time playing games and hanging out with friends in town squares.

These young men and women are supposed to be India’s “demographic dividend”, a term used by investors, economists and academics to refer to the potential economic contribution of the country’s youth. Prime Minister Narendra Modi wants India to become a $5trn economy by 2024, and millennials are supposed to power this nation-building effort by pushing up levels of earning and spending.

But India currently lacks the most important pillar of this growth: jobs. In 2018, a job advertisement put out by the state government of Uttar Pradesh to fill 62 “messenger” (or postman) positions received more than 93,000 applications, including from 3,700 people with PhDs, 28,000 post-graduates and 50,000 college graduates. The same year, when 63,000 positions within railway maintenance, 19 million Indians applied. These are some of the most junior positions in the country’s sprawling bureaucracy, paying roughly $250 a month.

Government jobs, defined by a reputation of stability, are in particular demand among Indian millennials. An extensive survey of Indian youth conducted by the Centre for the Study of Developing Societies found that 65 per cent of young adults listed a government job as a top priority, and only 7 per cent wanted a job in the private sector. This is because the private sector has not been able to create the volume of stable employment that India’s youth needs.

The Indian government has used the pandemic to pass labour reforms that make the country more competitive for foreign investment in the private sector. These reforms make it easier to lay off workers and limit the power of trade unions in the country, changes which big businesses say will facilitate investment in India. But they may also continue to push young Indians towards government jobs, as private employment becomes even less secure than before.

In other cases, local politics has undermined national policy: state governments in the country have begun ordering private industry and businesses to reserve jobs for locals. In 2019, the state government of Andhra Pradesh passed a bill to reserve 75 per cent of private industrial jobs for its own people, becoming the first province to take such a step. Last week, the state government of Haryana, a wealthy IT and industrial hub that is home to the offices of nearly 250 Fortune 500 companies including Google and IBM, implemented a similar bill, reserving 75 per cent of all private jobs with a pay ceiling of nearly $800 for its own citizens.

Instead of creating the conditions for long-term job growth, state executives are increasingly reserving existing jobs for their voters. These moves could not just hurt further investment in India and challenge the free movement and employment of people within their own country, but also accelerate poverty in poorer states by making it harder for people to secure jobs elsewhere.

Such state intervention does nothing to create new jobs and is akin to putting a plaster on a bullet wound. It could also Balkanise the country when it needs to come together to create a national consensus prioritising widespread employment creation for its youth. Writing about Haryana’s new job reservations, the academic Pratap Bhanu Mehta called the law “constitutionally indefensible” and “politically cynical”, stating that “the fact that states feel the need to enact these bills is an indictment of the economy as a whole”.

Meanwhile, time is of the essence for India’s millennials because, as Pronab Sen, a former chief statistician of India, told me, “the last thing you want is a generation which has squandered the best years of its life. It will create huge social problems as well”.

Vivan Marwaha is a technology consultant and the author of the forthcoming “What Millennials Want” (Penguin Random House). He tweets@VivanMarwaha