Educated Unemployment In J&K
An Enquiry Into The Nature And Causes
Dr Imtiyaz ul Haq
The UT of Jammu and Kashmir is currently overwhelmed with a massive and unprecedented
challenge of educated unemployment, though in rest of the socio-economic parameters it is
well placed in contrast to overall national scenario. It is a well-established fact that every year,
the valley of Kashmir attracts migrant workers from other states in hundreds of thousands for
jobs in both rural and urban areas.
Thus, one could draw an inference that unemployment is not an issue in other segments of the
economy. There are two concerns that I would like to comment upon with respect to the
massive and alarming unemployment of educated youth confronting our region.
Firstly, there is a general notion that for the growth and development of any economy,
investments (capital) and workforce (labour) are pre-requisites. Well, this is a necessary
condition but not sufficient. The sufficient condition requires appropriateness of the human
and non-human capital for the growth story to be complete.
If this second condition is not met, jobless growth is inevitable, culminating into structural
unemployment. This line of reasoning is enough to conclude that educated unemployment in
our economy is structural in nature. This reveals the extent of skill mismatch.
The type of curriculum pursued in our educational institutions, by and large, is colonial legacy
and a continuity of Macaulay’s education system. The major focus of Macaulay’s education
system was to develop cognitive skills among the educated workforce that could be utilized to
produce civil servants to run the administrative affairs, extract the resources and revenues –
the major portion of which was to be expropriated.
The manufacturing base that could set the economy on the standard path of structural change
got neglected altogether, putting pressures on the services sector to absorb all the resource
flow during the course of time at a relatively early stage of its development.
With this educational background and a weak manufacturing base, there has been a
tremendous pressure on the governments to accommodate the supply of the educated
workforce. It also reflects on the inability of our manufacturing sector to absorb the unlimited
supply of unskilled labour force.
Structural change theory states that starting from the initial stages of development, the
resource flow in terms of human and material must happen from the agriculture (primary) to
industrial (secondary) sector. This must happen in such a way that contribution of the
secondary sector reaches about 50 percent to total output (GDP) and employment.
Thus, the secondary sector reaches to maturity and is called the industrialization stage. This
marks the end of first phase of the structural change path. After reaching maturity, resources
continue to outflow from the secondary sector into the services (tertiary) sector. This results in
de-industrialization of the secondary sector and dominance of the services sector. This
systematic path is followed by all the developed countries of the world.
The Indian economy, on the other hand, shows a case of pre-mature de-industrialization
peaking at a very low level around 20 percent and 15 percent in terms of its contribution to
GDP and total employment respectively. This has, in turn, led to premature tertiarization of the
economy. So, the country in the first place has never industrialized in the real sense of the
Fundamental Restructuring Of Curriculum Needed
The educational institutions have turned into unemployment generating industries. What these
institutions are manufacturing is no longer needed by the economy. What the economy
requires is not supplied by these institutions. This type of academic arrangement is sure to give
rise to a classic case of structural unemployment. This I have argued way back in the year 2012
during an interaction with big business tycoons of India including Mr Rattan Tata, Mr Rahul
Bajaj and many others, who were accompanied by Mr Rahul Gandhi at an event titled ‘Building
Bridges’ organized by the University of Kashmir.
An outcome of this conversation was an article titled ‘What Ails Jammu and Kashmir Economy:
Do We Lack Resources, Big Investments or Sound Policies?’ published in the local daily, Greater
Kashmir. The crux of the write-up was an argument that investments by business tycoons, if
they really could do so given the fragile atmosphere in Kashmir valley, shall spark the process of
economic growth associated with huge income inequalities.
Often, it turns out that the major beneficiary of any investment is the investor himself. The
educated youth are reduced to meager wage earners. By ethical standards, this type of
treatment is unfair while dealing with educated unemployment.
A one-time solution to all the problems diagnosed above is a complete overhaul and
fundamental restructuring of the curriculum in the education system at all the ladders from the
elementary to the higher education, perhaps as is expected to be in light of NEP-2020. It must
be done. Put in context of Jammu and Kashmir economy, I would suggest that for the real
empowerment of the youth, their capacity building must be ensured in line with the local
resource endowments, of which there are enough. Horticulture sector, handicraft sector,
tourism sector, and energy sector (hydro, wind and solar) – these are the identified growth
drivers of the economy. These sectors are like sleeping giants as they are operating way below
their potential strength. These and other various sectors/subsectors need to be invigorated by
pursuing appropriate and sound policies. The skills that the economy needs must be made a
compulsory part of the curriculum being taught in our educational institutions.
Possible Value Additions
Let me emphasize a very vital point. In the literature of economic growth and development, it is
often believed that the principle of invisible hand theorized by the father of economics –
Adam Smith – is always at play leading to trickledown effects of private investments. An
individual investor pursuing purely her own self-interest (considered a divine natural instinct)
unwittingly and unintentionally promotes the greater social welfare at the same time.
However, there is a thin line between divinity of self-interest and wickedness of selfish-interest.
Moreover, in the societies with large income inequalities the so-called invisible hand might
actually be more helpful to the rich than to the poor promoting socio-political unrest.
Like in the horticulture sector, we are confined to the trading of apple and other varieties of
fresh fruit. Every year, thousands of tons of C-grade apple could be converted into various by-
products like juice, jam, jellies, apple butter etc.
This will have two important advantages. First, it can result into value additions fetching much
higher returns. Second, it will widen the micro and small industrial base creating more and
more employment opportunities.
Next, the scenic beauty and the topography of Kashmir valley opens great opportunities for
adventure sports like paragliding, mountain tracking, water boating, snow skiing etc. Apart from
hotel management, the tour and travel industry has a great potential to absorb educated youth
plentifully in a dignified way.
Branding and packaging of the handicraft products can make these items more appealing for
penetration into international markets.
Harnessing the 20,000 MW identified as economically and technically feasible using the run-off
the river discharge by installing mini-hydel projects without involvement of any implications on
account of Indus Water Treaty is possible. This has been amply explained by Sajad Gani Lone in
his book titled, “Achievable Nationhood”.
Impact Of Long-Term Low Intensity Conflict
Long-term low intensity conflict has a devastating effect. It may lead to socio-psychological
trauma involving both the mental and physical health of individuals. Furthermore, once if due
to some series of continuous negative shocks people are rendered jobless, it not only
depreciates the human capital but also depresses their enthusiasm and work culture.
Such economies are caught in unemployment traps. This in economics language is referred to
as hysteresis. In technical jargon, hysteresis is defined as “a variable if shocked away from its
initial position shows no tendency to return to its original position even if the cause of the
shock is over.” There is even a possibility that under such circumstances it might culminate into
“a severe attack of contagious laziness”. This was argued perhaps sarcastically by Franco
Modigliani, a great economist of Keynesian brand, to the classical economists while debating on
the causes of severe unemployment during Great Depression of 1930s.
Inculcate The Entrepreneurship Spirit
There is peculiar tendency found among the youth to show more inclination toward
government jobs and shy away from self-employment with every rise in the level of traditional
education (educational deepening) due to cultural stigma.
It is hence important that one of the focuses of policy making must be to inculcate the
entrepreneurship spirit among the educated youth. They must become instruments of
employment generation and not just job seekers. This is a case of attitudinal and behavioural
change. It might take its own course of time to evolve.
It is obligatory on the part of the policy makers to create a market-friendly environment and
fine tune its institutions to provide a conducive atmosphere.
(The writer is Professor & Head, Departments of Economics and History, University of Kashmir,