What is common among GM, GE, Disney,
, Electronic Arts, HP, Microsoft, Adobe, Uber, Stripe, Airbnb, Whatsapp, Venmo, Groupon, Slack? All these companies were started during depressions, or right after.
When big, convulsive economic events like COVID-19 happen, the implications and long-term impacts tend to take years to play out.
“India, a youthful nation known for its innovative zeal, can take the lead in providing a new work culture,” Prime Minister Narendra Modi said in a post on LinkedIn, appealing for developing business models that attach primacy to care for the poor, the most vulnerable as well as the planet. “Rather than playing catch up, India must be ahead of the curve in the post-Covid-19 world. Let us think about how our people, our skill sets, our core capabilities can be used in doing so,” the PM said. He said the next big ideas from India should find global relevance and application.
COVID-19 and the nationwide lockdown has resulted in humongous job loss. Data from CMIE’s Consumer Pyramids Household Survey reveals that youngsters (20-24 years) accounted for 8.5% of the total employed persons in the country, in 2019-20. However, they accounted for 11% of those who lost jobs. Over 1.3 crore youngsters lost their jobs in the lockdown. Another 1.4 crore jobs were lost in the age-group of 25-29 years.
In the short term, this crisis is going to lead to massive job losses and furloughs, and young people are likely to bear the brunt. Even before the crisis, youth unemployment was a big headache for leaders across the world. This issue is set to have a profound impact in India, where about 30% of the population, numbering 39 crores, are aged between 15-29 years.
Students have education loans to pay off – what’s going to happen in post-Covid situation?
Come June, like every year, 10-12 million Indian youth will enter the workforce. Even before the pandemic, India was grappling to provide her youth with proper employment opportunities. Our pre-crisis unemployment figure was the highest in the last 45 years, and the highest loan NPAs were registered by banks in the education sector. COVID-19 has only aggravated the situation.
In the short term, the government should provide a loan relief package, deferring the loan repayment for unemployed graduates of 2018/ 2019, by at least two years.
As of 2019, the central government’s expenditure on education stood at 3% of India’s GDP, but in comparison, the OECD countries on average spent 11% of their GDP on education.
The second intervention would be to focus on ramping up our skills training and vocational training initiatives. While India is struggling to find employment for its youth, companies are struggling to find people with the right skills. For example, only 4.5% of the Indian population is skilled as against 68% of British and 75% of the German population.
It is high time India emulates successful