UNEMPLOYMENT

Unemployment occurs when a person who is actively searching for employment is unable to find work.
One of the major hindrances in the growth of any country is unemployment. Unemployment is a serious
issue in India. Lack of education, lack of employment opportunities and performance issues are some of
the factors that lead to unemployment. The government of India must take effective steps to eliminate
this problem.
The current Unemployment rate in India is 6.1 percent, according to NSSO (National Sample Survey
Office) In the long-term, the India Unemployment Rate is projected to trend around 6.40 percent in 2020,
according to our econometric models.Unemployment occurs when a person who is actively searching for
employment is unable to find work. Unemployment is often used as a measure of the health of the
economy. The most frequent measure of unemployment is the unemployment rate, which is the number
of unemployed people divided by the number of people in the labour force.

REASON FOR CHOOSING THE TOPIC:

OBJECTIVES:
 To find out the causes for employment.

 To highlight the measures already taken by the government to control unemployment.

 To observe the unemployment rate in India over a period of time.

 To suggest ways to reduce unemployment.

TYPES OF UNEMPLOYMENT:
 Natural unemployment:

There will always be some level of unemployment, even in a healthy economy. Natural
unemployment consists of two of the three main types of unemployment: frictional and structural.

Frictional Unemployment:
Frictional unemployment occurs when workers leave their old jobs but haven't yet found new ones.
Most of the time workers leave voluntarily, either because they need to move, or they've saved up
enough money to allow them to look for a better job.
Frictional unemployment also occurs when students are looking for that first job or when mothers are
returning to the workforce. It also happens when workers are fired or, in some cases, laid off due to
business-specific reasons, such as a plant closure.
Frictional unemployment is short-term and a natural part of the job search process. In fact, frictional
unemployment is good for the economy, as it allows workers to move to jobs where they can be more
productive.
Structural Unemployment:
Structural unemployment exists when shifts occur in the economy that creates a mismatch between the
skills workers have and the skills needed by employers. A long recession often creates structural
unemployment. If workers stay unemployed for too long, their skills have likely become outdated. Unless
they are willing and able to take a lower-level, unskilled job, they may stay unemployed even when the
economy recovers. If this happens, structural unemployment leads to a higher rate of natural
unemployment.
 Cyclical Unemployment:
Cyclic unemployment is not part of the natural unemployment rate. It's caused by the contraction phase
of the business cycle. That's when demand for goods and services fall dramatically, forcing businesses to
lay off large numbers of workers to cut costs.
 Long-Term Unemployment:
Long-term unemployment occurs for those actively looking for a job for over 27 weeks. The effects are
devastating. Many employers overlook someone who's been looking for that long. The emotional and
financial costs can be very damaging. Sadly, a higher percentage of the unemployed fall into this
category than before the financial crisis or in prior recessions.
 Rural Unemployment:

India has roughly 70% of its population living in rural areas. Agriculture forms the mainstay of the rural
population. But, not enough employment is available for all those living in the rural areas. This leads to
unemployment, which can take three forms open, seasonal and disguised.

Open Unemployment
This refers to the situation in rural areas where people who are willing and actually able to work cannot
find any work.

Disguised Unemployment
This particularly plagues the Indian agrarian scenario. In this case, more workers than required are
engaged on the farm, where not all of them are actually productively contributing to creating output.
Thus, the marginal physical productivity of many workers is zero. This happens when almost the entire
family engages in farm production.

Seasonal Unemployment
The case with this is that workers remain out of work for a particular season. For example, workers hired
only for the harvest season remain unemployed for the remaining part of the year. Or, if the industry
itself is seasonal, workers naturally remain unemployed during the off-season.

 Urban Unemployment:

The unemployed in the urban areas have increased considerably over the years. Normally, the number of
the urban unemployed is registered with unemployment exchange boards. It can also take various forms,
as under-

Industrial Unemployment
Those illiterate persons who are willing and able to work in factories or industries in urban areas but
cannot find work fall in this category. As rural-urban migration increases, urban unemployment also does.

Educated Unemployment
The most horrifying kind of unemployment is when the educated youth are unable to find appropriate
jobs to suit their qualifications. With an improvement in education over time, skilled workers have
increased in number but the number of available jobs has not increased correspondingly. This causes
educated unemployment.

Technological Unemployment
This type of unemployment takes place every time technology upgrades and the existing workforce are
unable to cope with the new technology. If the skills required to meet the new technology do not match
the existing skill-sets of the employed workers and they cannot adapt, they become unemployed.
Upgradation is a natural process, with cyclical obsolescence as one set of technology becomes irrelevant
and gets replaced by another.
 Classical Unemployment:
Classical unemployment is also known as “real wage unemployment” or “induced unemployment.” It’s
when wages are higher than the laws of supply and demand would normally dictate. It occurs in one of
these three situations:
1. Unions negotiate higher salaries and benefits.
2. Long-term contracts set a wage that has become too high due to a recession.
3. The government sets a minimum wage that's too high.
The result is that companies must pay more per employee, so they can afford fewer employees. Those
that are laid off are victims of classical unemployment.
 Underemployment:
Underemployed workers have jobs, but they aren't working to their full capacity or skill level. This
includes those who are working part-time but would prefer full-time jobs and those who are working in
jobs where they aren't being utilized. Underemployment is often caused by cyclical unemployment.
During a recession, underemployed workers will take what they can to make ends meet.
Some definitions of underemployment include unemployment. Others include segments of society that
are not included in the standard definition of unemployment but are counted in the real unemployment
rate. Awareness of underemployment helps you understand the big picture of unemployment.

URBAN AND RURAL UNEMPLOYMENT RATE: (2018 – 2019)

The unemployment rate in the country in FY18 was at 5.3% in rural India and 7.8% in urban India,
resulting in overall unemployment rate of 6.1%.The highest unemployment rate was witnessed among
urban females at 10.8% followed by males in urban India at 7.1%, rural males at 5.8% and 3.8% in rural
females.

REASONS FOR RURAL UNEMPLOYMENT

 Excessive increase in population or population explosion

 Limited land and great pressure on land
 Seasonal nature of agriculture
 Lack of subsidiary and other village industries
 Too much dependence on nature
 Undeveloped and traditional methods of agriculture

REASONS FOR URBAN UNEMPLOYMENT

 Mass migration
  Disorganization in the economic structure and the dislocation in industries

 Personal factors like physical disability, weak mentality, accidents, defective education and
training.

CAUSES OF UNEMPLOYMENT:
The following are the main causes of unemployment:

(i) Caste System:

In India caste system is prevalent. The work is prohibited for specific castes in some areas. In many cases,
the work is not given to the deserving candidates but given to the person belonging to a particular
community. So this gives rise to unemployment.

(ii) Slow Economic Growth:

Indian economy is underdeveloped and role of economic growth is very slow. This slow growth fails to
provide enough unemployment opportunities to the increasing population.

(iii) Increase in Population:

Increases in population have been considerable over the half century. The country’s overall population is
made up of more than 1.3 billion people, second only to that of China. Moreover, India’s population is
predicted to exceed China’s by the year 2024; it will, furthermore, probably be the most populous
country for the entirety of the 21st century. As the country’s economic growth cannot keep up with
population growth, this leads to a larger share of the society being unemployed.

(iv) Agriculture is a Seasonal Occupation:

Agriculture is underdeveloped in India. It provides seasonal employment. Large part of population is

dependent on agriculture. But agriculture being seasonal provides work for a few months. So this gives
rise to unemployment.

(v) Joint Family System:

In big families having big business, many such persons will be available who do not do any work and
depend on the joint income of the family. Many of them seem to be working but they do not add
anything to production. So they encourage disguised unemployment.

(vi) Fall of Cottage and Small industries:

The industrial development had adverse effect on cottage and small industries. The production of cottage
industries began to fall and many artisans became unemployed.

(vii) Immobility of labour:

Mobility of labour in India is low. Due to attachment to the family, people do not go to far off areas for
jobs. Factors like language, religion, and climate are also responsible for low mobility. Immobility of
labour adds to unemployment.

(viii). Defective Education System:

The education system in our country too has failed to respond to the existing inter-generation gap. It
simply imparts general and literary education devoid of any practical content. India’s education policy
merely produces clerks and lower cadre executives for the government and private concerns. The open
door policy at the secondary and university level has increased manifold unemployment among the
educated that are fit only for white collar jobs.

(ix). Lack of Vocational Guidance and Training Facilities:

As, already discussed, our education system is defective as it provides purely academic and bookish
knowledge which is not job oriented. The need of the hour is that there must be sufficient number of
technical training institutions and other job oriented courses at village level. Most of the students in rural
areas remain ignorant of possible venues of employment and choice of occupation.

(x). Less Means for Self-Employment:

Another hurdle in generation of more employment opportunities is that there are inappropriate means
for self-employment in rural and semi-urban areas of the country.

EFFECTS OF UNEMPLOYMENT:

1. Loss of Human Resources:

The problem of unemployment causes loss of human resources. Labourers waste their maximum time in
search of employment.
2. Increase in Poverty:
Unemployment deprives a man of all sources of income. As a result, he grows poor. Therefore,
unemployment generates poverty.
3. Social Problems:
Unemployment breeds many social problems comprising of dishonesty, gambling, bribery, theft etc. As a
result of unemployment social security is jeopardized.
4. Exploitation of Labour:
In the state of unemployment, labourers are exploited to the maximum possible extent. Those labourers
who get work have to work under adverse condition of low wages. All this tells upon the efficiency of
labourers greatly influence the pattern of employment opportunities in the country. Being poor, a person
does not make any gainful use of existing resources.
5. More Emphasis on Capital Intensive Techniques:
In India, capital is scarce and labour is available in surplus quantity. Under these circumstances, the
country should adopt labour intensive techniques of production. But it has been observed that not in
industrial sector, also in agriculture sector; there is substantial increase of capital than labour. In the case
of Western countries, where capital is in abundant supply, use of automatic machines and other
sophisticated equipment are justified while in our country abundant labour, results in large number of
unemployment.

STEPS TAKEN BY THE GOVERNMENT TO REDUCE UNEMPLOYMENT:

POLICIES IMPLEMENTED:
The following steps have been taken by Government, to increase employment opportunities:

1. Integrated Rural Development Programme (IRDP):

IRDP stands for Integrated Rural Development Programme. It is a rural development program of
Government of India launched on 2 October 1980 across the country. It aims to provide self-employment
program to poor rural families to help them increase their income and cross the poverty line. It mainly
targets the poor families which are living below the poverty line such as small farmers, agricultural
labourers including the rural artisans.

2. Rural Self Employment Training Institutes (RSETIs) :

Rural Self Employment Training Institutes (RSETIs) was developed for unemployed rural youth to
generate self-employment through short term training intervention. The primary objective of the RSETIs
is to impart quality training programme in skill development to the rural youth at free of cost. The main
objective of this programme is to reduce unemployment among the youth.

3. Jawahar Rozgar Yojana:

Jawahar Rozgar Yojna was largest National Employment Program of India at that time with a general
objective of providing 90-100 Days Employment per person particularly. In 1989, National Rural
Employment Programme and Rural Landless Employment Guarantee Programmes were merged in the
yojana.

4. Nehru Rozgar Yojana:

In order to alleviate the conditions of urban poor, a Centrally Sponsored programme - Nehru Rozgar
Yojana - was launched at the end of the Seventh Five Year Plan (October 1989) with the objective of
providing of employment to the urban unemployed and underemployed poor. The Central Government
indicated its overall contribution while the essential task of identifying, earmarking and coordinating the
relevant sectoral inputs was undertaken by the State Governments.
The NRY consisted of three schemes namely
(i) the Scheme of Urban Micro Enterprises (SUME)
(ii) the Scheme of Urban Wage Employment (SUWE) and
(iii) the Scheme of Housing and Shelter Upgradation (SHASU). During the Eighth Plan, 92% of the available
funds were utilised and but for the shortfall in the number of dwelling units upgraded/in progress under
SHASU, the targets have been achieved under all the other schemes.

5. Prime Minister’s Integrated Urban Poverty Eradication Program (PMI UPEP):

Recognising the seriousness and complexity of urban poverty problems, especially in the small towns
where the situtation is more grave due to lack of resources for planning their environment and
development, the PMI UPEP was launched in November, 1995. The Programme was being implemented
on a wholetown/ project basis extending the coverage to all the targetted groups for recuring a visible
impact. Most of the States are in the preparatory stages of the Programme, such as house-to-house
survey, patial mapping, need assessment, developing lternative project reports, building community
structures etc., which take quite some time.This programme aims at to provide employment to the urban
poor.

6. The Swaran Jayanti Shahari Rozgar Yojana:

The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in operation since 1.12.1997, has been
comprehensively revamped with a view to addressing the drawbacks observed in implementation. The
Revised Guidelines have come into effect from 1.4.2009.

Key Objectives of the revised Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

 Adressing urban poverty allevialtion through gainful employment to the urban employed or
under employed poor;

 Supporting skill development and training to enable the urban poor to have access to
employment opportunities provided by the market or undertake self-employment;

7. Jawahar Gram Samridhi Yojana:

Jawahar Gram Samridhi Yojana (JGSY) is the restructured, streamlined and comprehen-sive version of the
erstwhile Jawahar Rozgar Yojana (JRY). Launched on 1st April 1999, it has been designed to improve the
quality of life of the rural poor by providing them additional gainful employment.This Yojana has been
formulated to improve the quality of life of the rural poor by providing the additional gainful
employment.

8. Other Programmes:
Govt, of India launched other employment and poverty alleviation programme as under:
(i) Pradhan Mantri Gramodaya Yojana (PMGY)
(ii) Pradhan Mantri Gramodaya Yojana (Gramin Awas)
(iii) Pradhan Mantri Gramodaya Yojana-Rural Drinking water project.
(iv) Pradhan Mantri Gram Sadak Yojana (PMGSY)
(v) Autyodya Anna Yojana.
(vi) Jai Prakash Rozgar Guarantee Yojana (JPRGY).
(vii) Valmiki Ambedkar Awas Yojana (VAMBAY).
IMPACTS OF THE POLICIES IMPLEMENTED:

1. Integrated rural development program:

Since the beginning of the program till 1997, around 51 million families have been benefited from IRDP at
an expenditure of Rs. 11434.27 crore, 45% of these families were Scheduled Castes/Scheduled Tribes and
27% were women.
The beneficiaries of this program are as follows:
 Rural artisans
 Laborers
 Marginal Farmers
 Scheduled castes and scheduled tribes
 Economically backward classes with an annual income of less that Rs 11,000.
Subsidies are provided to the following people as follows:
 Small farmers (25%)
 Marginal farmers and Agricultural laborers (33.33%)
 SC/ST families and differently abled people (50%)

2. Training for Self-Employment:

In 1995-96 training was to be provided to 2.8 lakh rural youth under this programme.
Impressed by RSETI model, Departments of MANAS, National SC/ ST Development Corporation and
Women and Child Welfare Department have came forward for collaborative efforts to train persons
belonging to Minorities, SC or ST and Women applicant through RSETIs.

3. Jawahar Rozgar Yojana:

A special feature of the scheme is that 30% of the employment generated will be reserved for women.
The Yojna was implemented on rural scale. Every village was to be covered through Panchayati Raj
Institutions. The village got aide and support from District Rural Development Authority.

4. Nehru Rozgar Yojana:

The scheme served the urban poor who belong to the Below Poverty Line (BPL) segment. The task of
classifying families under this category is vested with the Planning Commission of India.During the Eighth
Plan, 92% of the available funds were utilised and but for the shortfall in the number of dwelling units
upgraded/in progress under SHASU, the targets have been achieved under all the other schemes.

5. Prime Minister’s Integrated Urban Poverty Eradication Program (PMI UPEP):

The programme was implemented entirely at the village panchayat level. Preference is given to the SC/ST
families, living below the poverty line and physically handicapped persons.
The physical achievements as reported by the States are as under:

 House-to-house survey has been completed in 213 towns.

 Town-wise project reports have been prepared for 229 towns.
 Under the self-employment component, 20775 applications have been forwarded to banks, out
of which 3080 cases have been approved.
 Under the Shelter Upgradation Component, 10386 applications have been forwarded to
banks/HUDCO, out of which 4743 cases have been approved by HUDCO.
  As many as 8382 Neighbourhood Groups, 1200 Neighbourhood Development Committees and
444 Thrift and Credit Societies have been formed.

6. The Swaran Jayanti Shahari Rozgar Yojana:

During the year 1991-92, 253 man-days of employment per beneficiary was
generated of which 156 man-days were in the enterprise set up under the scheme and 97 man-days in
other works.

The delivery of inputs under the Scheme shall be through the medium of Urban Local Bodies (ULBs) and
community structures. Thus, SJSRY calls for strengthening of these local bodies and community
organisations to enable them to address the issues of employment and income generation faced by the
urban poor.

7. Jawahar Gram Samridhi Yojana:

People living in villages constitute the target group of JGSY. Preference is given to the SC/ST families,
living below the poverty line and physically handicapped persons.

EMPLOYMENT RATE (1991 – 2019):

SUGESSTIONS TO REDUCE UNEMPLOYMENT:

Control on Population Growth:

To control unemployment appropriate controls on population growth should be made.

Development of Non-agricultural Subsidiary Industries:

In India agriculture witnesses’ seasonal unemployment. Thus, in villages the agriculture related industries
must be developed so that the farmer is able to earn something in free time. For this, the subsidiary
activities of animal husbandry, poultry farming, gardening, milk business etc. can be developed.

Development of Small Industries:

Small and cottage industries must be established, so that people get employment at low capital
investment. For this, such small scale industries must be developed which are labour intensive.

Full Capacity Utilization:

Many industries in India are working at less than their full capacity. Such industries must be encouraged
to utilize their full capacity, so that employment opportunities may be increased in such industries.
Increase in Investment:

To increase the employment opportunities, household savings must be encouraged, so that more capital
formation may be done and investment increases. This would assist in the establishment of new
industries and employment opportunities would increase.

Demand and Supply of Labour:

The demand and supply of labour should be coordinated in various production areas. For this, the future
demand and supply of labour should be estimated and arrangements for their training etc. be made
accordingly, so that the labourers in excess of the demand may find employment, elsewhere.

Suggestions of the Labour Commission:

The National Labour Commission gave the following suggestions for the solution of the problem of
unemployment and underemployment

 Change in the education policy

 Rapid industrial development

 Survey the human resources of the country

 Strengthen the job counselling services

CONCLUSION:
India is a fast growing economy. There has been enormous improvement in the unemployment scenario
since the time it was recognized as a challenge. The government is implementing various measures for
increasing the employment rate and has succeeded to a great extent. Participation of women and the
marginalized groups speaks about the success of the policy measures. The wide spread skill development
programmes have gained popularity across the nation.

LEARNING OUTCOME:
With better enforcement of the strategies mentioned above, the employment level can be significantly
improved.

BIBLIOGRAPHY:
www.intelligenteconomist.com

www.yourarticlelibrary.com

www.gktoday.in

www.investopedia.com

planningcommission.nic.in

www.economicsdiscussion.net
nationalconference.org.in