India’s Unemployment Crunch- The Way Ahead

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Unemployment Gauged

Our nation is in the severe grip of mass unemployment and there doesn’t seem to be any easy way out. To put things into perspective, we have 31 million unemployed citizens, which is almost the population of Canada. Perhaps even more worryingly, according to an OECD report (Organization of Economic Coordination and Development) 30% of India’s youth (aged between 15-29) are neither employed nor in any sort of education or training. The foreseeable future does not look bright as the estimated number of jobs which will be created in 2018 are speculated to be around 600,000.

Tourism’s Revenue

There are paths ahead however which we could take and it would be well advised to heed indicators from the rest of the world. Tourism for instance, has emerged as the largest employer of labor power in the world. It is estimated, that by 2019, tourism will emerge as the second largest employer of labour power domestically. The sector has created employment for 40.3 million citizens in 2016, accounting for 9.3% of the total jobs in this country.

We are however far behind international standards. Receiving approximately 10.18 million foreign tourists every year, ranking us 40th out of 136 countries by the Travel and Tourism Competitiveness Report. The industry leader, France receives 82.6 million tourists every year and this disparity is reflected in our gross earnings rather starkly. Our annual revenue from the sector being 22.427 million $ pale compared to the US which grosses over 205 billion $ annually from international tourists, which is almost 2/3rd of our annual budget.

Governmental and Infrastructural Limitations

There are crucial factors that are dampening what tourism could bring to our economy. To begin with, the cost of travel and accommodation in India is often more expensive than flying to a neighboring country.The implementation of GST for instance may have solved the nuisance of a number of indirect taxes by levying a standardized direct tax, however it also seems to have affected the decisions of high end tourists because of the raised air fares and the increased cost of holidaying. Tourists in Goa, which is largely recognized as a top holiday hub, were down by 30% last Christmas season. We need to lower taxes on commercial airlines and build more hotel rooms. This is a crucial area if we are to become an attractive destination. The whole country for instance has just 100,000 hotel rooms while the city of New York alone has around 80,000.

Underbelly of the Industry

Worryingly, market constraints aside we have harbored the dark legacy of terroristic violence – the 2008 Mumbai attacks by the Lakshar-e-Taiba stand out as the instance which is seared into popular perception. That said, there are governmental decisions which may have dissuaded prospective travelers.  A less incidental and far more virulent aspect of the picture is the fact that the social unrest which grips this country is now is spilling into vacation havens. The rape and murder of Danielle McLaughlin, a 28 year old British woman by Vikat Bhagat being the most recent reminder of a sickness that plagues the psyche of this nation. Far from being an isolated incident in a tropic paradise, Goa bears in its recent history the rape and murders of Scarlett Keeling,15 and Denyse Sweeney 34. These incidents do point to what appears to be a targeting of British women and the culprits seem largely to be not locals, but domestic travelers from Delhi and Mumbai.

The Way Forward

Rectificatory measures seem to be self evident. Demi Owens, a personal trainer from Liverpool says that “I feel safer in the main clubs, the beach shacks are fine in the daytime but at night there is no CCTV (cameras) or doormen.” The installation of these cameras and the posting of doormen ought to be made a priority if establishments are to be able to guarantee the safety of their customers.

Funnelling into the larger point however, this is but one aspect within the sector that could be consolidated and demands an investment in fixed capital (CCTV cameras) while also providing low skill jobs, which is what a country with 36% of the population illiterate – is well equipped to provide. And it would be in the interest of the government to incentivize such measures since it has repeatedly failed at ensuring them at its owns behest. It is also the most elementary step if we are to realize the marketing potential of a country with 36 World Heritage Sites. Creating a tourist friendly and safe environment is essential if we are to cash in on the potential that the hospitality sector can provide.

Author | Arsh K.S.