Jobs in Nagaland: Theory vs Reality

Nagaland, a vibrant state in Northeast India, reveals a stark disconnect between textbook economic theories and the realities of its job market. While conventional strategies emphasise industrialisation and formal employment to boost economies, Nagaland’s unique circumstances—rugged terrain, cultural traditions, and heavy reliance on government jobs—make these approaches less effective, leaving unemployment a persistent challenge.

Unemployment in Nagaland: The Data

According to the Periodic Labour Force Survey (PLFS) for July 2023–June 2024, Nagaland’s unemployment rate for individuals aged 15 and above surged to 7.1%, up from 4.3% the previous year. This shows a 65% increase, which puts Nagaland as the state with the second-highest unemployment rate in India, trailing only Goa (8.5%). Youth unemployment is particularly alarming, with 27.4% of those aged 15–29 jobless, and this rate rises to 39.6% in urban areas. Among educated individuals (those with secondary education and above), the unemployment rate rose to 13.4%, with postgraduates facing a staggering 27% unemployment rate. Historically, the state’s unemployment rate peaked at 25.7% in 2019–20 and 19.2% in 2020–21, indicating that while progress has been made, job creation remains a significant challenge.

Heavy Dependence on Government Jobs: A Budgetary Burden

Nagaland has the highest government service ratio in India, with government employment accounting for a disproportionate share of formal jobs. Approximately 50 government jobs are available annually for every 14,000 candidates competing through examinations, highlighting the intense competition and scarcity of opportunities. This reliance stems from a lack of private sector investment, driven by decades of conflict, insurgency, and limited industrial growth. As a result, the public sector is the primary employer, with 31.9% of employed individuals receiving regular wages or salaries, mostly from government roles.

This dependence places a significant strain on Nagaland’s budget. In the 2024–25 fiscal year, the state’s committed expenditure—covering salaries, pensions, and interest—amounts to Rs 12,177 crore, consuming 68% of its estimated revenue receipts of Rs 18,034 crore. With only 12% of revenue (Rs 2,250 crore) generated internally and 88% (Rs 15,783 crore) coming from central government transfers, Nagaland’s fiscal flexibility is severely limited. The state’s fiscal deficit is targeted at 3% of its Gross State Domestic Product (GSDP) (Rs 1,450 crore), but high committed expenditures restrict investments in job-creating sectors like infrastructure or education, perpetuating the cycle of unemployment and reliance on government jobs.

Why Textbook Employment Theories Fall Short

Economic theories often advocate for industrialisation and large-scale businesses to drive job creation. However, these strategies struggle in Nagaland due to several unique factors:

• Challenging Geography: The state’s hilly terrain complicates the construction of factories, roads, or large-scale infrastructure, deterring private investment.
• Cultural Preferences: Many Nagas value traditional livelihoods like farming, weaving, or handicrafts, which are often informal and don’t align with formal factory or office jobs promoted by mainstream theories.
• Education-Job Mismatch: Despite high education levels, many graduates lack skills suited to available jobs. For instance, 45.2% of postgraduates and 40.7% of graduates were unemployed in 2020–21, reflecting a disconnect between education and market needs.
• Weak Private Sector: Decades of instability and “taxation” by insurgent groups have stifled private sector growth, leaving government jobs as the default aspiration for many.

The Role of Self-Employment

With constrained formal job opportunities, self-employment is a mainspring of Nagaland’s economy. According to PLFS 2023–24, 60.1% of the employed population is self-employed, with 51.5% as own-account workers and 8.6% as household enterprise helpers. In rural areas, 87% of working women are self-employed, engaging in activities like agriculture, handicrafts, or small retail. While this reflects resilience and entrepreneurial spirit, most of these ventures are informal, offering limited scalability, low income, and no social security, which underscores the need for support to make self-employment sustainable.

Solutions Tailored to Nagaland’s Needs

To address unemployment and reduce the burden of government job dependency, Nagaland requires strategies that align with its geography, culture, and economic realities. Here are practical solutions:

1. Skill Development Programs: Introduce vocational training tailored to local industries like tourism, handicrafts, and organic farming. Programs should bridge the gap between education and market demands, equipping youth with relevant skills.
2. Support for Small Businesses and Entrepreneurs: Provide low-interest loans, marketing assistance, and training to help self-employed individuals and small businesses scale up. Schemes like those promised by the Nationalist Democratic Progressive Party (NDPP) for merit-based youth employment and industrial policies could be expanded.
3. Infrastructure Investment: Improve roads, electricity, and internet connectivity to attract private businesses and tourism. Enhanced infrastructure could also support local entrepreneurs in accessing broader markets.
4. Promote Tourism and Cultural Industries: Leverage Nagaland’s rich cultural heritage and natural beauty to create jobs in hospitality, eco-tourism, and cultural events. The state’s focus on promoting heritage sites is a step in the right direction, but it needs consistent investment.
5. Diversify the Economy: Encourage private sector growth in sectors like agro-processing or renewable energy to reduce reliance on government jobs, easing budgetary pressures.

The Bottom Line

Nagaland’s unemployment crisis and heavy dependence on government jobs highlight the limitations of one-size-fits-all economic theories. The state’s high government service ratio, while providing stability for some, strains its budget and limits investments in job-creating sectors. By focusing on local strengths—self-employment, cultural heritage, and natural resources—and addressing structural challenges like infrastructure and skill mismatches, Nagaland can forge a path to sustainable job creation. Tailored policies that respect the state’s unique context are essential to building a brighter, more inclusive economic future.

Degree of Thought is a weekly community column initiated by Tetso College in partnership with The Morung Express. Degree of Thought will delve into the social, cultural, political and educational issues around us. The views expressed here do not reflect the opinion of the institution. Tetso College is a NAAC Accredited UGC recognised Commerce and Arts College. The editorial team includes Chubamenla, Asst. Professor, Dept. of English and Rinsit Sareo, Asst. Manager, IT, Media & Communications.

For feedback or comments please email: dot@tetsocollege.org