Unemployment threatens to collapse India’s economy

Millions of young people face it in India, where unemployment in the country is sharply rising, a development that threatens to undermine India’s economy at the moment when it was already expected to take off.

The world relied on India’s status as the world’s most populous nation for a young new driver of the global economy as China’s population began to shrink and age.

Unlike China, India’s working-age population is young, growing, and expected to reach 1 billion over the next decade, an enormous pool of employment and consumers that one US administration official called Joe Biden an “economic miracle.”

Unlike China, where economists fear there will not be enough workers to compensate for the growing number of older people, India’s concern is that there are not enough jobs to support the growing number of workers.

While people under the age of 25 account for more than 40 percent of India’s population, nearly half (45.8 percent) were unemployed as of December 2022, according to the Centre for Indian Economic Surveillance, an independent think tank based in Mumbai.

Economists say India has different options to address these demographic problems, including developing a globally competitive and labour-intensive manufacturing sector, which accounted for less than 15 percent of employment in 2021, but such macro-level reforms will do little to help those now struggling.