Remittances, Migration and Youth Unemployment in India

My work requires me to take auto rickshaw rides every now and then, and on two such occasions I encountered two young men who spoke fluent English which rather took me by surprise. One of them, Sunil, noticing my raised eyebrow, said, ’Mam, I am a graduate in English Literature but have been unable to find a job  so I have been driving this vehicle now for three years’. He said he was initially frustrated but has now come to terms with his situation and that many of his friends were in a similar position. Unemployment is widespread among the youth in India, especially in the lower and middle classes. I asked him if he had ever thought of going abroad for work. He said he did not have the means.

Unemployment on the rise in India

India is among the top ten performers in terms of  gross economic growth and is the hub of information technology which is the biggest job creator for its people. There are other sectors such as Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), media, biotechnology, banking, finance, management and development which also give job opportunities. Even so, youth unemployment is on the rise. According to the CIA Fact book, the unemployment rate in 2010 was 10.8 percent in India

But why should unemployment be on the rise if all these sectors are booming? Muhammad, another 23 year old disgruntled graduate unable to find suitable work,  is actually doing the job of a daily wage labourer albeit in an international organization. He says that the lack of work to go around and the resultant cut throat competition were two of the main reasons for unemployment. All the young men I talked to said that nepotism and corruption were rampant. In my opinion physical inability or the unwillingness of workers to accept the kind of work offered is another reason. But those who cannot afford to go abroad or who chose not to do so for various reasons remain frustrated and dissatisfied. Although a large number of young people are employed in the above mentioned sectors, many educated youth lack the necessary technical skills for such work as  many education systems do not equip them for the job market and institutions tend just to teach their own syllabus. Traditional skills learnt at home are not formally recognized which has led many companies to set up their own in-house training for employees which can be a waste of resources and time. They would rather hire somebody who already has the technical skill sets needed. These and many other reasons besides have led to people migrating to other countries in search of better opportunities.

Trend of Migration

The history of Indian migration goes back 2500 years. Africa, South East Asia and the Far East are some of the places to which  Indians migrated. Although for the Non Resident Indian (NRI) generation migration goes back only about 70 years. They migrated to places such as Australia, the UK, USA, New Zealand, the Gulf countries and South East Asia in search of skilled and unskilled work with the Gulf countries being more popular with the unskilled and semiskilled workers. Some of the reasons for migration are educational opportunities, better wages and employment opportunities, professional development, networks and  socio economic and political conditions. The  World Bank claims that the top 5 emigration countries in the world are India, Bangladesh, Pakistan, Afghanistan and Sri Lanka and the top 5 migration corridors are Bangladesh–India, Afghanistan–the Islamic Republic of Iran, India–the United States, India–Saudi Arabia and  India–United Arab Emirates.

Inward Remittances

According to the World Bank in 2010, the top recipient countries of recorded remittances were India, China, Mexico, the Philippines, and France. India topped the list with a total of US$ 55 billion the same year which makes a very significant difference from the US$21 billion which it received in 2003.

From the 70s the trend has changed as transfer of remittances increased steadily, remained more or less stagnant in the 80s and picked up sharply once more during the 90s. With many migrants  also investing their money in India, the total value of remittances has been increasing steadily over the past decade as NRIs and PIOs (Person of Indian Origin) have now started sending back more remittances to the country. Although highly skilled migration can be a brain drain for developing countries like India, at the same time remittances worth billions can also contribute significantly to economic growth and poverty reduction. This can be done by building infrastructure and giving the recipient families a better life as well as educational and business opportunities.

Many of them are also returning to India now, either for personal or professional reasons. Reema recently returned from the US with her family after ten years. She did not want to bring up her daughter up there now that she has entered her teens. Many return to take care of their aging parents or even to have the feeling of belonging to one’s own culture and society. Companies here are now scooping up these people with their excellent educational backgrounds and good work experience. Many companies have even introduced relocation packages for these foreign returnees who were once (in tea time conversations) known as “Non Returnable Indian” or “Not Required Indian”.  Today the NRIs and PIOs can give their children an American or British education as there are American or British style crèches, playschools and international schools and colleges in many cities. Earlier on,  NRIs were afraid of returning,  as India  did not offer them a very convenient lifestyle. However, they are doing so now as the India now offers a better standard of living  and  most facilities they enjoyed abroad are now easily available in the country. India offers ample opportunities for growth- not just just money saving options. So when there are better educated and more experienced candidates with global exposure for jobs, the youth back home in India might be at a disadvantage.

Is there a solution?

Although the government has taken some steps for migrant workers, a lot remains to be done to tackle youth unemployment. Since the education system in India is focussed more on getting degrees than on vocational training, skills need to be aligned with industry needs and need to include both theoretical and hands-on learning. The government bodies looking after education, the industries hiring workers and the institutions imparting technical or vocational education (both government and private) should all interface  and come up with a solution for the education system that will make young people more equipped for the job market.