RBI MPC member advocates skill development amidst transient unemployment

Youth unemployment transient: Addressing concerns over youth unemployment, Ashima Goyal, a member of the RBI Monetary Policy Committee (MPC), emphasised the transient nature of unemployment among younger age brackets, as reported by PTI. She highlighted that Indian youths often spend more time acquiring skills and exploring entrepreneurship opportunities, contributing to a dynamic employment landscape.

Goyal's remarks come in response to an International Labour Organisation (ILO) report, which revealed that youth unemployment accounted for nearly 83 per cent of India's total unemployed population in 2022. However, she noted a declining trend in youth unemployment, with rates dropping from 17.5 per cent in 2019 to 10 per cent in 2023.

While discussing policy interventions, Goyal stressed the importance of creating opportunities for youth through improved health infrastructure, education, and skill acquisition facilities. She emphasised the need to focus on enhancing domestic industries and reducing dependency on single-country imports, particularly from China, to bolster economic resilience.

Regarding foreign direct investment (FDI), Goyal highlighted potential factors contributing to its slowdown, including re-shoring efforts in advanced economies and election-induced policy uncertainty. She stressed the need for policy consistency, regulatory simplification, and ease of doing business to attract investment and boost domestic firms.

Goyal also highlighted success stories such as Apple's contribution to India's transition from a mobile phone importer to an exporter and Tesla's growing interest in the Indian market. She emphasised the importance of avoiding hasty conclusions based on short-term fluctuations in FDI and advocating for a diversified investment landscape to mitigate risks.

As FDI inflows to China decline, various countries are witnessing significant gains in their global market share, presenting opportunities for India to attract investment and strengthen its position in the global economy.

(with PTI inputs)