Unemployment has increased youth suicide rate by 33% in last 6 years: Prof. Santosh Mehrotra to Karan Thapar for The Wire.

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In an interview to discuss the situation in the unorganized sector of the economy and the consequent impact on jobs and employment, one of our most highly regarded labour economists points out, relying on NCRB data, that the suicide rate for unemployed youth has increased by 33% between 2018 and 2024. Prof. Santosh Mehrotra says that NCRB data shows the suicide rate was 3 every 2 hours in 2018 but today it has increased to 2 every hour. He says this means that not only are the young failing to find jobs but are opting out of the labour market and their frustration and unhappiness is pushing them to suicide.



In a 34minute interview to Karan Thapar for The Wire, Prof. Mehrotra, who is a Professor at the Centre for Development Studies at the University of Bath in the United Kingdom, said that between 201516 and 202223 we experienced jobless growth in the unorganized sector. During that period the number of establishments increased by 2 million but the number of people employed decreased by 1.7 million.



Relying on calculations he has done, Prof. Mehrotra says that if the rate of growth in the unorganized sector had continued as it was between 20102011 and 20152016 right up till 20222023, we should have seen 7.98 million new establishments (as opposed to just 2 million) with 6.3 million more jobs (as opposed to a decrease of 1.7 million).



Prof. Mehrotra says the reason why the number of establishments increased by 20222023 but the number of workers diminished is because a very large number of these new establishments were Own Account Enterprises i.e. one man operations which are probably like roadside vendors. In other words, pakodawallas. Prof. Mehrotra says: : “This predominance of OAEs is the underlying symptom of, and a reason for, widespread poverty and a distressed job market condition.”



Within the unorganized sector the segment worst hit between 20112016 and 20222023 is manufacturing. Here the number of establishments shrank by 9.33% whilst the number of workers shrank by 15.03%.



Prof. Mehrotra said there are three explanations for what has happened to the unorganized sector. They are demonetization, a poorly thoughtout GST and Covid.



Given that the unorganized sector is said to be effectively 45% of the economy and 8085% of jobs this is clearly not good news for the Indian economy.



In the interview, Prof. Mehrotra also discusses what steps are necessary to create jobs and boost the economy. He explains how efforts to create jobs will boost consumption, create demand and thus provide the incentive for private sector investment to grow. He then identifies three areas where the Finance Minister should take steps to boost jobs. I will leave you to see the interview to find out more about this.

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