With the Union Budget presentation for fiscal year 2025 around the corner, Indian business leaders anticipate seeing what the government will do to promote economic activity and elevate consumer sentiment. The mounting void of employment opportunities for Indian youths is raising concerns across the business community.
In 2022, the World Population Prospects report cited India’s population at 1,407,563,842 of which 50% are below 25 years old and over 65% are under 35. Further, according to the International Labor Organization (ILO), 36% of the population, or 506,722,983 people, were unemployed in 2021. Youths accounted for 83% of India’s unemployed population, with educated youths representing 66% of the country’s unemployed population. That’s 420,580,075 job seekers under the age of 25 unemployed and 334,437,168 educated youths (more than the population of the United States) unemployed.
Recently, Nithin Kamath, co-founder of Zerodha (India’s largest stock brokerage firm), took to X (aka Twitter) to share his perspective on how the country can combat structural unemployment:“Part of the solution is to do everything to encourage entrepreneurs, even in small towns and villages in India. VCs will never go to these areas. Which means other wealthy people are the best hope, Kamath posted on X. As a successful financial entrepreneur and former financial advisor, Kamath is a respected voice within the business and finance communities. The 261,200 views, 1,315 likes, 150 bookmarks, 141 reposts, and 51 quotes (and counting) of Kamath’s X post illustrate this. Kamath continued, “One of the things I hope the budget addresses is section 54F. This section offers tax exemptions on the capital gains earned from the sale of any asset if the proceeds are reinvested in a residential property. Including investments in startups and residential property investments can make startup investing mainstream.”
The government has echoed concerns and suggestions similar to Kamath’s. India’s Department for Promotion of Industry and Internal Trade (DPIIT) recently proposed ending the “angel tax, ” the income tax startups and companies face when receiving funding from unlisted or non-publicly traded companies, such as venture capitalist and private equity firms. With India’s surging population growth and youths comprising an increasingly significant share of its workforce, the country faces obstacles it’s never experienced before. The evolution of the economy must keep pace with the evolution of India’s workforce to address the employment challenges Indian youths continue to experience.
As Kamath appropriately described the situation, “One of the biggest challenges the Indian economy faces is structural unemployment among youth. Growth will always be uneven unless this improves.”
