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What is Unemployment?

People who are searching for jobs are unemployed when they are unable to find them. In many instances, unemployment is used as an indicator of economic health. As a result, there are more unemployed people than working-age people.

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Meaning of Unemployment in India

In spite of the economic system and level of development achieved, unemployment is a common economic malady in every country of the world. Nevertheless, underdeveloped and developing countries have a very different type of unemployment from developed nations of the world.

Developed countries such as the United States are dealing with large numbers of involuntary and frictional unemployment, whereas underdeveloped or developing countries such as India are confronted with high rates of population growth and slow economic growth.

There are two types of structural unemployment: those that are open and those that are disguised. Underemployment, disguised unemployment, and underpopulation growth in rural areas constitute the most serious form of unemployment for undeveloped countries such as India.

There is a serious problem with unemployment. There are fewer job vacancies than there are job seekers in the country, which indicates a recession. An unemployed person who has the willingness and capacity to work is unable to find a meaningful or gainful job even when they are willing to work. Therefore, unemployment is a major waste of human resources.

A huge unemployment problem is afflicting India, one of those underdeveloped countries that are ill-fated. As a result of the shortage of capital equipment and other complementary resources accompanied by a high rate of population growth, the unemployment problem in India cannot be attributed to deficient demand in Keynesian terms.

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Types of Unemployment in India
Types of Unemployment in India

Types of Unemployment in India

  1. Disguised Unemployment
  2. Seasonal Unemployment
  3. Structural Unemployment
  4. Cyclical Unemployment
  5. Technological Unemployment
  6. Frictional Unemployment
  7. Vulnerable Employment

Nature of Unemployment Problem in India

Currently, there is a structural unemployment problem in India.

There are now two broad categories of unemployment in the country:

(a) Rural Unemployment:

Rural areas of India have a higher rate of unemployment.

In rural areas, unemployment is divided into two categories:

(i) Seasonal Unemployment:

While agriculture is the dominant occupation in the rural areas of the country, it is a very seasonal occupation. In rural areas, there is no year-round work for the people. There are many rural people who sit idle 5 to 7 months of the year because there are no multiple cropping systems or subsidiary occupations in the rural areas.

Many agro-based industries are affected by seasonal unemployment, such as tea, Jute, sugar, oil pressing, paddy husking, and sugar mills.

(ii) Disguised or Perennial Unemployment:

A large part of India’s agriculture industry is experiencing hidden or perpetual unemployment because of excessive population pressure. The appearance of disguised unemployment is that everyone seems to be working, but in reality, there is not enough full-time work for everyone.

A large proportion of India’s working population works in agriculture. Over 100 million people were engaged in agriculture and allied activities in 1951, whereas 160 million people were engaged in the same activities in 1991. The surplus population is as high as 60 million people with no jobs in agriculture or allied activities.

(b) Urban Unemployment:

Unemployment in urban areas has two components:

(i) Industrial Unemployment:

Unemployment in the industrial sector is gradually affecting urban areas in this country. Industrialization, because of slow growth, was unable to provide sufficient employment opportunities to the growing number of urban residents owing to the increase in the number of urban residents and the exodus from rural areas to urban industrial areas for employment.

This resulted in huge industrial unemployment in the country as the rate of growth of industrial employment could not match the growth of urban workers.

(ii) Educated or middle-class Unemployment:

The term educated unemployment is also used to describe a distinct type of unemployment that happens mostly in urban areas throughout the country. People in the middle class are particularly affected by this problem. Increasingly, the number of people who are educated is on the rise across the country due to the rapid expansion of general education.

Despite the slow growth of technical and vocational education facilities, the country suffers from an unusually high level of educated unemployment due to an inadequate supply of technical and vocational educational facilities. There was 5.9 lakh educated unemployed persons in 1962. Now there is 230.50 lakh.

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causes of unemployment in india
causes of unemployment in India

Causes of Unemployment in India

There are so many factors contributing to India’s high unemployment rate.

(i) Population Explosion: Increasing India’s labor force after the end of the 1950s has resulted in high unemployment because of the high rate of population growth. Approximately 4 million people join the workforce every year based on the 2.5% annual population growth rate. This huge number of unemployed people must be provided with gainful employment.

(ii) Underdevelopment: Despite a vast quantity of natural resources lying untapped and underutilized in the country, the Indian economy remains underdeveloped. In spite of the size and volume of economic activity, it is still small. Non-agricultural sectors, especially modern industrial sectors, which are able to create a large number of jobs, are growing very slowly.

Additionally, the Indian economy had a slow growth rate during the period preceding independence. Rather than expanding and modernizing indigenous small-scale and cottage industries, the British destroyed them. It has also been found that the industrial sector has not yet met plan targets and requirements during the post-independence period.

Another obstacle in the way of realizing agriculture, industry, and infrastructure growth potential is the slow rate of capital formation. The underdevelopment of the country is thus primarily responsible for slow employment expansion.

(iii) Inadequate Employment Planning: In India, employment opportunities were not increased adequately in the first phase of economic planning, and very little has been done to exploit the Nurksian variety of rural labour surplus. Indian planning also suffers from a serious shortage of manpower.

In various regions of the country and also in diverse skills, less effort is being made to balance the manpower needs and supplies.

Due to this, there is a shortage of trained and educated personnel in fields such as engineers, technicians, cost accountants, plain graduates, port graduates, administrators, etc. Consequently, the enormous resources used to develop manpower were not much help due to faulty manpower planning.

(iv) Slow Rate of Growth: Compared to the targeted rate of growth, India’s economy grows at a very poor pace and even the actual rate of growth is quite low. As a result, the increased employment opportunities under successive plans could not keep pace with the increases in labour force taking place annually in the country, resulting in an increasingly large backlog of unemployed workers each time.

(v) Backwardness of the Agriculture: There is colossal rural unemployment and underemployment due to heavy population pressure on land and traditional agricultural methods.

(vi) Insufficient Industrial Development: A very inadequate amount of industrial development has taken place in the country. A full realization of industrial development has not yet been achieved. Due to a lack of capital, inadequate technology, scarcity of industrial raw materials, shortage of electricity, and lack of labor-intensive investment, the country’s industrial sector was unable to gain momentum and also wasn’t able to generate sufficient employment opportunities.

(vii) Prevailing Education System: There are lots of defects in the current education system in India because it fails to provide any vocational or technical education. Every year, matriculants, undergraduates, and graduates are graduating in great numbers, putting an increasing strain on job opportunities for the educated middle class.

A huge number of educated young people cannot access the opportunities of self-employment due to the lack of vocational education and professional guidance, making them frustrated and dissatisfied.

(viii) Slow Growth of Employment during Economic Reforms: To conclude, India has seen a certain amount of jobless growth during its current phase of reform. A large number of surplus workers have been laid off as a result of economic reforms and the downsizing of workers in various industries.

Employment growth was 2.40 percent between 1983 and 1994 but fell to a mere 0.98 percent between 1994 and 2000. In the 1999-2000 period, unemployment growth rates climbed from 5.99 percent to 7.32 percent.

Unemployment in India Essay

Remedial Measures to Solve Unemployment Problem in India Essay

An economy with a large populace like India faces the serious problem of unemployment. In light of this, it is reasonable to suggest some methods to solve the problem. It is best to separate the problem of rural unemployment from that of urban unemployment before suggesting appropriate countermeasures.

A. Remedies to Rural Unemployment Problem:

In view of the different nature of rural unemployment, it would be more appropriate to suggest some specific measures to address it.

Following are some of these measures:

  • Expanding Volume of Rural Works: Expanding opportunities for work, especially in rural areas, is one of the most important measures to resolve the unemployment issue. Adding to the existing workforce and creating jobs for those who join it, the rate of expansion in the scale of works must be rapid both in wage employment and in self-employment.

Considering that large-scale industries cannot provide enough employment opportunities, it would be better to place more focus on developing agriculture, related industries, small and artisanal industries, as well as the unorganized sector and services sector.

  • Modernisation of Agriculture: Almost all states should modernize their agricultural sector in order to eradicate the problem of rural unemployment. The result would be a considerable surplus of agricultural products, which would ultimately boost rural economies and also create more jobs. It is also important to develop wasteland and diversify farming methods.
  • Development of Allied Sector: Rural unemployment can be addressed effectively by developing allied sectors such as dairying, poultry farming, beekeeping, fishery, horticulture, sericulture, and agro-processing that is capable of generating employment and self-employment in rural areas of the country.
  • Development of Rural Non-Farm Activities: For rural areas to create employment opportunities, rural non-farm activities, such as rural industries, decentralized and small-scale industries, agro-based industries, the informal sector, and health and educational services should be developed throughout the country with active government support. As part of the Eighth Plan for generating rural employment, the Government has adopted this strategy.
  • Appropriate mix of Production Techniques: Mahalanobis developed a strategy of development that favored capital intensive techniques, but in order to combat rural unemployment, a mix of labour intensive and capital intensive production techniques should be used selectively in the new fields of production to increase employment as well as efficiency.
  • Rural Development Schemes: To eradicate rural unemployment, the Governments at both the Central and State levels must act seriously to introduce and implement rural development schemes so that the benefit of such development can be reaped as soon as possible.
  • Decentralisation: The optimal solution to combat rural unemployment would be to distribute industries around small towns, taking into account the local endowment level in order to control migration from rural to urban areas.
  • Extension of Social Services: Likewise, extra educational, medical and other services should be provided in rural areas in order to empower the people in rural areas in general. An indirect consequence of such a situation is that people will be inspired to start their own businesses.
  • Population Control: In the rural and backward areas of the country, it would be worthwhile to put adequate emphasis on controlling population growth through family welfare programs. This solution would be conducive to solving the growing issue of rural unemployment throughout the nation.
  • SHGs and Micro Finance: Be sure to take appropriate steps for promoting self-help groups (SHGs) to generate self-employment possibilities. In this regard, NGOs can play a crucial role in resolving rural unemployment by channeling microcredit to SHGs.

B. Remedies to Urban Unemployment Problem:

It is important for the country to follow certain important measures in order to combat urban unemployment.

These are some of the measures:

  • Rapid Development of Industries: We need to improve industrial efficiency immediately in order to combat urban unemployment. Therefore, immediate efforts must be made in order to expand and modernize existing industries in a cost-effective manner, as well as to set up new industries.

We need to modernize some basic and heavy industries already present in the fields of iron and steel, chemicals, defense goods, heavy machines, power generation, atomic energy, etc., and add more new industries to the existing and new fields for creating a huge number of employment opportunities. It makes sense to set up more industries based on demand and resources that can generate employment opportunities.

  • Revamping Education System: There is a great deal of backwardness in Indian education and it does not meet the demands of current industries and administrative structures. As opposed to giving too much emphasis to general education, there should be a greater emphasis on vocational education, which will lead to young people getting involved in small scale and cottage industries and also in services.
  • Motivation for Self-Employment: By enhancing the opportunities for career counseling within the organizational framework, government and non-profit agencies can motivate young people to accept the path of self-employment in the context of narrowing employment options for them.
  • Development of SSIs: By adopting a labor-intensive approach, a good number of small-scale and cottage industries should be developed, given the high unemployment rate. In urban and semi-urban areas, such as S.S. It would generate many employment opportunities, as they would produce need-based products.
  • Development of Urban Informal Sector: The informal sector of urban employment employs a fair number of urban residents; therefore, there are adequate measures that need to be taken for the improvement and modernisation of the informal sector so that the number of urban unemployed individuals increases.
  • Revamping the Role of Employment Exchange: The role of Employment Exchanges in the country needs to change in order to maximize the resources available to the government, in order to motivate and guide the young generations towards self-employment alongside their existing roles of registration and placement.
  • Banking Support: SSIs should be developed, various units in the services sector and also the informal sector should be developed sympathetically as part of the solution to the urban unemployment problem.
  • Works of National Interest: Creating sufficient employment opportunities in the urban areas is essential to solving urban unemployment.
  • Changing Pattern of Investment: Additionally, it should be attempted to transform the way in which investments are made in order to generate employment from an economic and social perspective.
  • Government Support: The government should come up with effective urban employment generation plans in the vein of PMRY, NRY, etc. to provide assistance to the unemployed in becoming self-employed.
  • Growing Participation of FDI: As a means of tackling urban unemployment, the government should follow a policy in the same spirit as China for promoting the smooth flow of foreign direct investment (FDI) into our country to encourage its participation in various important industrial and infrastructure projects.

C. General Remedies to Unemployment Problems:

(i) Special Employment Programmes:

A special employment program needs to be implemented as an interim measure until the economy can mature to the point of guaranteeing jobs for everyone.

Furthermore, these kinds of supplementary programs are extremely important for the poor living in rural and urban areas as well as in small towns and medium-sized cities.

In such special employment programs, seasonal jobless workers can also be offered seasonal employment. Such programs can also benefit backward populations such as landless agricultural workers, marginalized farmers, rural artisans, and the people of remote regions and hills.

Programs may consist of providing direct wages via rural capital works or by providing assets or inputs that would allow those people to work on their own. The government is taking the right steps in implementing NREGA at present.

(ii) Raising the Rate of Capital Formation:

Raising the country’s capital formation rate is essential for reducing unemployment in general. In order to increase the amount of work, the rate of capital formation needs to be increased.

Employment in capital goods can be generated directly by capital formation. By increasing capital formation, the country’s capital stock increases, and thereby employees’ productivity increases by increasing the amount of capital available to them.

(iii) Manpower Planning:

For the problem of unemployment to be solved, it is crucial that human resources are managed right and scientifically. In order to promote employment opportunities and to develop the economy, this is crucial. The following measures are necessary for effective manpower planning.

To begin with, beyond the simple focus of matching the supply and demand of skilled personnel, effective ways must be taken to reduce the growth rate of the population, which in turn reduces the growth rate of labour supply after a period of inactivity and therefore reduces unemployment.

The second factor is that expert labor has to be tailored according to specific sectors’ requirements so that oversupply or shortages of skills do not occur.

Furthermore, it is critical to increasing the capability of a large number of general people for their development, while continuing with the present strategy promoting high-level skill formation through education and training.

The provision of sufficient food and nutrition, elementary education, adequate health facilities, and training for jobs are some of the measures needed.

Additionally, as part of introducing special programs for employment, it is crucial to ensure that the programs match the characteristics and abilities of targeted groups as well as the overall development plans of various sectors. Schemas will become quite useful and meaningful as a result.

Measurement of Unemployment in India Essay

A company under the Ministry of Statistics and Programme Implementation (MoSPI), known as the National Sample Survey Office (NSSO), measures unemployment through the following methods:

  • Usual Status Approach: By using this approach, only those individuals are categorized as unemployed who have been unemployed for at least 365 days before the survey date.
  • Weekly Status Approach: In this approach, those classified as unemployed are only those who had no gainful work for even a short time in the seven days before the survey.
  • Daily Status Approach: Using this method, every day of reference week is measured to calculate unemployment status. For a particular day, an individual who is unable to find work is described as unemployed.

The latest unemployment figures (based on CMIE’s latest data):

  • India’s unemployment rate jumped from 5.9 percent to 7.2 percent in February 2019, the highest it’s been since September 2016.
  • In February 2019, there were an estimated 400 million employed people, compared to 406 million the year prior and 407.5 million employed in February 2017.
  • As of February 2019, 43.2% of adults were on the job, down from 42.7% in January.
  • In the labour market, labour participation rate describes the number of working-age people who are employed or seeking employment in an economy.

Short Essay on Unemployment in India in 300 Words

When people seeking jobs are unable to find employment, they are said to be unemployed. By the same token, an economy can be said to be in a state of unemployment when skilled labor cannot find careers due to a lack of demand or an excess supply of labor.

In relation to the available jobs in a given market, the number of unemployed measures the rate of unemployment. In addition to seasonal, frictional, cyclical, and structural unemployment, there are other types of unemployment. According to its population density, India is the second-largest country in the world. Due to the many people who cannot find jobs, the unemployment rate in the country is high.

Causes of unemployment in India

  • Without sufficient employment opportunities, the economy grows. India’s Gross Domestic Product is said to be at 7.5% but this does not always translate to jobs.
  • There remain fundamental flaws in the Indian education system, even though literacy rates have risen over the last decade.
  • India is experiencing rapid population growth, which is a major reason for unemployment. It has been more than 10 years since more than 136 million people have been added to the population, and unemployment has also increased.
Strategies to Reduce Unemployment
Strategies to Reduce Unemployment

Solutions to reduce unemployment rate in India Essay

  • An increase in industrialization. There are more job opportunities in India due to the increased number of industries.
  • Universities and colleges should emphasize vocational and technical training.
  • Increasing the number of self-employed people. Financing citizen projects should be the government’s responsibility.
  • The development of agriculture’s infrastructure.
  • Attracting a larger amount of capital
  • Implementation of policies that are focused.

FAQs on Unemployment in India Essay

Q1. Why there is a problem of unemployment in India?

The problem of unemployment in India is caused by overpopulation and the lack of appropriate skills.

Q2. How can we prevent unemployment?

Unemployment Reduction: 6 Strategies
1. Use of Labour-intensive Technology
2. Accelerating Investment in Agriculture
3. Diversification of Agriculture
4. Labor-intensive Industrial Growth
5. Services and Employment Growth
6. Education, Health, and Employment Generation

Q3. What are the different types of unemployment in India?

Types of Unemployment in India
1. Disguised Unemployment
2. Seasonal Unemployment
3. Structural Unemployment
4. Cyclical Unemployment
5. Technological Unemployment
6. Frictional Unemployment
7. Vulnerable Employment

Q4. What is the effect of unemployment?

Unemployed people have no income, so they cannot meet their financial obligations. As a result of unemployment, people can become homeless, sick, and stressed. As a result, workers may be forced to work at jobs that are below their skill level and result in underemployment.

Q5. What is the conclusion of unemployment?

Any economy faces the problem of unemployment. The unemployed suffer a negative impact because they are jobless and have poorer prospects of finding new jobs, while those who are employed feel less secure about their jobs in the future.

Conclusion

In India’s economy, is there a rural unemployment rate as well as an urban unemployment rate? Urban unemployment is especially high because of technology, while rural unemployment is highest during the summer months.

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