Unemployment in India

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What is Unemployment?

Unemployment refers to a situation in which the workers who are capable of working and willing to work do not get employed or fail to secure work or any other activity which gives them income or means of livelihood. People who are unfit for work due to physical reason or do not want to work are excluded from the category of unemployment.

Basic Definitions

1. Workforce: A worker is one who participate in any economic activity.

2. Labour Force: It refers to the segment of population which supplies or offers to supply labour for production and therefore includes both employed and unemployed persons.

3. Labour Force Participation Rate (LFPR): It is defined as the percentage of persons in labour force (i.e. working or seeking or available for work) in the population.

4. Work Participation Rate: It is defined as the percentage of employed persons in the population.

5. Unemployment Rate: Is is defined as a number of unemployed people divided by the number of people in the labour force.

Rate of Unemployment = (Number of unemployed person/ Total labour force) x 100

Types of Employment

1. Structural Unemployment: It refers to a situation, which arises due to change in the structure of the economy. The transformation of economy from Labour intensive economy to a Capital intensive economy creates a structural unemployment due to skill gaps.

2. Seasonal Unemployment: It is an unemployment, which occurs during certain season of the year.  For instance, in seasonal occupations like agriculture, tourism sector etc activities take place only in some season.

3. Voluntary Unemployment: It is a situation where workers are either not seeking work or are in transition from one job to another (quitting one job in search of another better job).

4. Involuntary Unemployment: It refers to the situation where workers are seeking jobs and are willing to work but are unable to get work.

5. Frictional Unemployment: The minimum amount of unemployment that prevails in an economy due to workers quitting their previous jobs and are searching for new jobs.

6. Cynical Unemployment: It arises due to deficiency or fall in effective demand from consumers which leads to fall in production and low demand for labour.

7. Disguised Unemployment: When too many people are employed than what is required to produce efficiently.

8. Underemployment: It is a situation under which people with a higher level of skills are employed in less productive jobs and thus fails to utilize Labour force fully as per their skills and expertise.

Causes of Unemployment

The unemployment problem in India has assumed alarming dimensions since independence. Among the many factors that have contributed to this, some are discussed below:

1. High Population Growth: The galloping increase in population of our country during the last decade has aggravated the unemployment problem in the country. Due to rapidly increasing population of the country, a dangerous situation has arisen in which the magnitude of unemployment goes on increasing each year.

2.Insufficient Rate of Economic Progress: Although India is a developing country, the rate of growth is inadequate to absorb the entire labour force in the country. The opportunities of employment are not sufficient are not sufficient to absorb the additions in the labour force of the country, which are taking place as result of the rapidly increasing population in India.

3. Absence of employment opportunities in activities other than agriculture: As enough other employment opportunities are not available, agriculture is the principal area of employment on our country. A major of rural unemployment is the extremely low rate of growth of agriculture. Thus, pressure on land is high, as about 2/3rd of the labour force is engaged in agriculture. Land is thus overcrowded and a large part of the work force is underemployed and suffer from disguised unemployment.

4. Seasonal Employment: Agriculture in India offers seasonal employment; thus agriculture labour remains idle during off-season.

5. Increasing turnout of students from Indian Universities: During the last decade, educated unemployment has increased due to rapid turnout of graduates by the Indian Universities. Moreover, in the Indian educational system, more emphasis is placed on engineering and other technical subjects rather than on Art subjects. But there is unemployment amongst technical graduates as well. There is a lack of proper vocational education in the country.

6. Slow Developing Industries: Industrialization is not rapid in our country and industrial labour finds few job opportunities. The agricultural surplus labour force is not absorbed by the industrial sector.

Anti Poverty and Unemployment Programmes

1. Integrated Rural Development Programme (IRDP): The objective of the scheme is to create productive assets for the families in rural areas living below poverty line. Bank Loans are provided to create productive assets to take up self-employment activities. They include agriculture horticulture, animal husbandry, poultry and weaving etc.

2. Jawahar Rozgar Yojana/Jawahar Gram Samriddhi Yojana: It is now became a programme for the creation of rural economic infrastructure with employment generation as the secondary objective.

3. Rural Housing – Indira Awaas Yojana: It was first merged with the Jawahar Rozgar Yojana (JRY) in 1989 and in 1996 it broke away from JRY into a separate housing scheme for the rural poor.

4. Sampoorna Gramin Rozgar Yojana (SGRY): The main objective of the scheme continues to be the generation of wage employment, creation of durable economic infrastructure in rural areas and provision of food and nutrition security for the poor.

5. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: The main objective of this scheme is to provide at least 100 days of unskilled manual work to one person from each rural family at the minimum wage fixed by the State Govt. If the manual work is not provided to beneficiary within 15 days, he will be given unemployment allowance.

6. National Rural Livelihood Mission: Ajeevika (2011) It is a part of National Rural Livelihood Mission (NRLM)–the mission for poverty reduction is called Ajeevika (2011). It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income on monthly basis. Self Help groups are formed at the village level to help the needy.

7. Pradhan Mantri Kaushal Vikas Yojna: The cabinet on March 21, 2015 cleared the scheme to provide skill training to 1.4 million youth with an overall outlay of Rs. 1120 crore. This plan is implemented with the help of Ministry of Skill Development and Entrepreneurship through the National Skill Development Corporation. It will focus on fresh entrant to the labour market, especially labour market and class X and XII dropouts.

8. National Heritage Development and Augmentation Yojna (HRIDAY): HRIDAY scheme was launched (21 Jan. 2015) to preserve and rejuvenate the rich cultural heritage of the country.

There is need for faster employment growth for not only absorbing the addition to the labour force, particularly with the ongoing demographic changes, but also reducing the unemployment rate. There is also a need to formulate a comprehensive policy to create adequate employment opportunities in New and Inclusive India.
Location: Ahmedabad, Gujarat, India

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