A steadily worsening youth unemployment rate could end up converting the country’s demographic dividend into a disaster and, if that happens, it could effectively tip the country into an abyss. This was the dismal and depressing scenario sketched out by Dr Rathin Roy, a former member of the Prime Minister’s Economic Advisory Council and the director of the National Institute of Public Finance and Policy.Speaking to Karan Thapar in an exclusive interview for The Wire, Roy said that the number of young Indians without jobs but also not looking for jobs and, additionally, not in any institute for training or education has almost tripled in the last ten years. It was estimated to be 30-35 million a decade ago. It’s now believed to be 100 million or more. If you remove the retired and those too young to work, this 100 million constitutes a very sizeable section of the population of working age.Roy was asked whether the government was conscious of this looming problem which, additionally, is steadily getting worse, and first said: “I wouldn’t know” but then went on to add, “I hope so”. His answer implied that it was the job and duty of the government to be aware of such problems and respond to them but even though he had served for two years on the Prime Minister’s Economic Advisory Council (his term ended this June) he had no proof or evidence of the government’s awareness of the problem or of the opposite.In a wide-ranging interview, Roy spoke at length about the seriousness of the situation facing the economy, the effectiveness of the steps the government has taken and what more it needs to do. He said quarter two growth of 4.5% was extremely bad news particularly when you bear in mind that India needs, at the minimum, to grow at 6%. He believes that the growth rate will “dance around” 5% for the next four quarters. And he does not believe India will achieve 6% growth for at least one year more.Asked whether he agrees with finance minister Nirmala Sitharaman that this is “not a recession yet and it won’t be a recession ever” or whether he accepts the view of T. N. Ninan, the chairman of the Business Standard, that “when growth drops precipitously from 7 to 4.5% in four quarters, it’s for all practical purposes a recession”, Roy said that in a narrow and technical sense the finance minister is right. A recession only happens when an economy experiences two consecutive quarters of negative growth. That isn’t the case in India and its very unlikely it will ever come to pass. However, he also added if you look at the performance of the economy and its 5 and 4.5% growth rates in the light of the need to grow at “at least” 6% then you could say that there is “a growth recession”.Asked about Dr C. Rangarajan, the former RBI governor’s comment that “reaching 5 trillion by 2025 is simply out of question”, Roy said that it all depends on whether the government takes dramatic action in the months and years ahead. However, he agreed that if the present situation continues till 2025 – which he said was extremely unlikely – then a 5 trillion economy would not be possible. He hoped that the government would take the radical and dramatic action necessary.Speaking about the immediate measures necessary to respond to the present situation, Roy said the government needs to boost demand and if to do so the fiscal deficit target slipped to 4% or even 4.5% he would have no qualms provided he had a guarantee that the money was going to people who would spend it rather than save it. However, he isn’t confident that the government can give such an assurance.In fact, Roy painted a picture of a sclerotic and bureaucratic government that is sitting on bills without paying them and also not fulfilling commitments, like PM Kisan, even though it has the money to do so. Instead, a task force has been appointed to inquire into why the money it has is not being spent. This, despite the fact the government knows there is an urgent need to increase expenditure so as to boost demand and create growth.Speaking about Raghuram Rajan’s call to make land acquisition easier, Roy said there is a need for steps to make it simpler, faster and more transparent but, he added, not necessarily cheaper.Speaking about Rajan’s call for “more flexibility” in labour employment, he said that there is no need for a hire and fire policy because already the majority of workers in most enterprises are retained on contracts. In fact, Roy said the government’s proposed fixed term employment scheme was a way of giving such contract employees security and proper treatment.Finally, Roy did not seem to agree with former prime minister Manmohan Singh’s claim that “there is a palpable climate of fear in our society today” or the assertion that this is “is a fundamental reason for our sharp economic slowdown”. However, in response to a question about Rahul Bajaj, Roy did say that rich and privileged people could not take recourse to a plea of apprehension or fear. He added that he would be more concerned if ordinary Indians were fearful and apprehensive. But he simply does not know if that is the case.Watch Rathin Roy’s interview below.