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Keeping the unemployment rate down to a permissible level is one of the major challenges that the Indian economy is facing at present. Since the outbreak of the COVID-19 pandemic, unemployment rate has increased manifold in the country and it is showing no signs of coming down in the near future. In August, the unemployment rate had risen to 8.3 per cent from 6.8 per cent in July, which is indicative of severe hardships in the coming days. According to the International Labour Organisation (ILO), the rate of unemployment among the youths in India is four per cent. It means that there are not enough jobs for the youths who are joining the job market after finishing formal studies. Several economists have expressed deep concern over this alarming development and have called for an increase in investments from both the public and private sectors to tame the crisis. Investment in India has come down to 30.7 per cent in 2019 from 39.3 per cent in 2009, a backward movement of the economy.
The falling rate of investment in India is perplexing as at present it is among a few countries in the world which is peaceful, politically stable and has huge skilled manpower capable to aid any industry. So, efforts should be made to ascertain the reasons why investments are limited. Are there any shortcomings in attracting investments or is the situation not conducive to new investments? Economists are working to answer these questions as there appear to be no major reasons for such a decline in investments in the country. There is no economic logic involved in terming the falling rupee as the culprit. Rather, it works as a boon in disguise to attract foreign investments as investors may find conditions more favourable. So, there is nothing in the prevailing situation which may act as a deterrent for investments in the country. As a matter of fact, India’s present economic scenario is more attractive to investors than ever before.
Perhaps, the problem lies in the mindsets of our home-grown industrialists who have almost ceased to invest in their motherland, whilst still enjoying various benefits offered by the government to lure investments. Instead of becoming a major player in India’s march to economic prosperity, these investors are now investing in foreign lands anticipating quick returns. There is an urgent need to prevent the flight of India's capital abroad. The trend should be stopped for the sake of unemployed youths of the country. Such industrialists should be encouraged to invest adequately in the country too, else, the government should not hesitate to withdraw sops offered to domestic industries since the adaptation of new economic policy in the early nineties. The disease is a deep-rooted one and only stringent measures can address it.