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The cheerless case of jobless graduates in Telangana

Venkatram Reddy Sureddy

A man willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under this sun. – Thomas Carlyle

Let this sink in for a moment: A person is considered to be actively looking for a job if such a person has contacted potential employers / placement agencies for jobs, appeared for job interviews, responded to job advertisements, online employment sites and submitted resumes to potential employers. Reading about jobs or attending training programs is not considered as actively looking for a job.

Now realize the gravity of the situation: In Telangana, four lakh graduates are actively looking for a job and still unemployed. Or to put it in other words, one out of five graduates in Telangana is struggling hard to get a job by attending job interviews etc., but by end of the day comes home with battered shoes and shattered dreams.

Telangana is one of the top four states in India (except: J&K and North East) with unemployment for graduates above 20%. The other states with above 20% unemployment being Andhra Pradesh, Himachal Pradesh and Jharkand. On the other hand, Karnataka, with a competitive IT hub in Bangalore just like Hyderabad has a very enviable unemployment rate of 5% for its graduates. The national average unemployment rate for the graduates is 12%. (See table below)

Is high unemployment of graduates in Telangana because there are more graduates in Telangana?

A very common argument by those justifying high unemployment rate for graduates in Telangana is by arguing that Telangana produces more graduates than other states and hence it is difficult to place all these graduates in jobs. Let this myth be busted once and for all: As can be seen from the above table, the percentage of graduates in Telangana (11%) is only one percentage point above the national average of 10% graduates. Of all the states in India, Goa (15%), Haryana (17%) and Uttarakhand (19%) are the only three states with graduates as a percentage of total population above 15%. It is also interesting to note that these states have considerably lower unemployment rates among their graduates. Goa has 7% unemployment rate for its graduates, Uttarakhand has an impressive less than 4% unemployment rate, while Haryana has almost 15% unemployment rate for its graduates. Clearly, arguing that high number of graduates in Telangana is the cause of high unemployment for those seeking white-collared jobs is simply not true.

Karnataka and Telangana: A comparative study

Karnataka could be taken for comparative study to understand the ground realities in Telangana. Both states posit themselves as South Indian states with strong infrastructure and talent-base to attract the modern industry including Information Technology sector. Bangalore and to a lesser degree Hyderabad have become destinations for MNCs to invest. The GSDP per captia of both the states is also comparable. So, how is Telangana performing in terms of employment creation capabilities vis-a-vis Karnataka?

For the same GSDP per captia, Karnataka has lower overall unemployment rate of 1.7%, while Telangana has an overall unemployment rate of 3.6%. When it comes to graduates’ unemployment: Karnataka has 5% unemployed graduates, whereas Telangana has 21% unemployed graduates. (See table below)

With broad assumptions of graduates venturing only into services sector and services sector solely dependent on graduates, if marginal GSDP Services Sector per graduate job created is calculated: for every extra graduate job to be created, the state’s output should increase by Rs. 8 Lakhs more in Telangana than in Karnataka. Or to put it another way, for every Rs. 100 output Karnataka produces, Telangana needs to produce an output of Rs. 135 (35% more) to generate similar graduate employment.

While Telangana boasts of 14% growth in GSDP in 2017-18, it appears to be a growth in output which is not translating considerably to growth in employment. With one out of five graduates on the street, it is high time Telangana moves away from jobless growth to equitable development, no matter the plethora of welfare schemes the government doles out.