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Almost all countries in the world have employment and unemployment problem. A total number of 191.

.8 million persons were unemployed in the year 2005 in the world. The unemployment rate was around 6.3% of the labour force 1.37 billion people though employed were earning less than US$2 a day. 520.1 million people though employed were earning less than US$ 1 a day. The problem therefore is of the order of 711.9 million if at least one dollar a day is considered.


EMPLOYMENT AND UNEMPLOYMENT Total Population as on Jan. 2005 1092.96 Million SCENARIO IN INDIA (Projected)
Total Labour Force Million Total Employment Million Total number of open Million Unemployment Unemployment rate as percentage of total labour force 469.94 459.10 10.84 Around 2. 3 %






Employment in Organised Sector(2004) 26.4 Million



Employment in Unorganised Sector

432.7 Million


No. of Jobseekers Registered with 39.3 Million Employment Exchanges (as on 31-12-2005) No. of youth registered with Employment Million Exchange as on 31-12-2004 Working Poor i.e Persons working but living below poverty line(1999-2000) Million 28.8



Around 130

Note: openly unemployed are those who did not carry out any gainful activity during last 365 days.

Sector World India Agriculture 40.1% 58.5% Industry 21.0% 18.1% Services 38.9% 23.4% Vast majority of workers in Agriculture A significant proportion of them are below poverty line

Various countries are trying to address the problem of unemployment through various means. Developed countries are trying to have separate employment policies. Developing countries are relying on economic growth as well as special employment generation programme. Export of labour force to other countries will not be easy unless labour force in developing countries can claim better skills.

Planning in India focused on economic growth. Generation of employment was viewed as part of the process of development and not as a goal in conflict with, or to be pursued independently of economic development Thus there is no employment policy as such and additional employment generation is attempted through growth process and through special employment generation programme

quite low($3.05), compared to the advanced countries like USA($40.72),UK($30.92), Even China ($4.39) has better labour productivity than that of India. Economic development, productivity and employment growth are still positively correlated.The extent of correlation varies from sector to sector. While in services sector these have high correlation, the industrial and agriculture sector the correlation is low. Unlike in developed countries, in developing countries like India where demand has not yet reached the saturation point Productivity increase had no retarding effect on employment. Technological development in various sector has not yet reached to that level which leads to Economic growth without any employment growth.

Population growth and consequential increase in the labour force. 10 to 12 million persons are entering the labour force every year. Productivity and income generation from employment are low.

Though, open unemployment is only2.3%(11 million) the percentage of the population below the poverty line is high. The fact of being employed is obviously no guarantee of escaping from poverty,which in our situation refers to a very basic level of subsistence.

Out of around 470 million work force as many as 130million are working poor. Therefore the problem is of the order of 130+11=141 million.

There are primarily two main issues namely:Issue no-1 How to provide employment to the new entrant to the labour force and to the unemployed. That is how to create additional employment opportunities needed. Issue no-2 How to improve quality of employment so that productivity and income level of the workforce increases.

Basic Assumption

Economy has the capacity to provide gainful employment to all the persons in the labour force The workforce is not able to get decent work because of non availability of skill required in the labour market

Planned Initiative. Tenth Plan envisages creation of around 10 million jobs each year, around 6 million from normal growth process and around 4 million through special employment generation programme proposed for various sectors. Economic growth and employment growth being correlated attempts are made to achieve 8% growth rate of the economy so that anticipated employment generation takes place. As against a target of 10 million per year around 12 million persons per year were provided employment during 20002005

Provide skill training to the new entrants to the labour force

Improving skill level of the work force.

Organise Skill training as per the market demand. That is, it should cater to the needs of both organised and unorganised sector.

Skill is acquired by the new entrants to the labour force through two channels namely:1.


Formal skill training through various institutions run by Government and Private. Around 2.5 million through Government Institutions and few hundred thousand through private institutions(exact estimates are not available for private sector). Informal means i.e through on the job training, learn while working, apprenticeship training, helping the master craftsman,etc. Majority of the work force acquire skill through this channel . Such skills are not certified and their skill level not known and hence such workers suffer from mobility for betterment, up gradation of their skill and consequential improvement in their living.

Training is imparted in various trades designed primarily to suit organised sector Around 2.5 million get training each year through various ministries/ departments of central government. Industries are associated with training through institute management committee. Formal test conducted and certificate issued.


Skill acquisitions through informal means can not be avoided. Skills thus obtained require testing and certification. ( for construction industry it has been taken up. For other industry it is being worked out) For those skills which are required and normally not obtained through informal channels/ not available in sufficient number special efforts are made to organise modular practical oriented course by utilizing existing infrastructure( i.e ITI, polytechnics, schools etc) and master craftsman. In the Institute of Excellence being developed it is aimed that side by side with production of world class workman modular course will help them in self employment and engagement in informal sector. Various Ministries and Departments also are addressing the needs of informal sector while designing skill training for the sector dealt by them.