ECO - Tanmay Rane - IT02460020S23

Unemployment in India
PAL INDIA
TANMAY VIJAY RANE
Batch No. IT0246/C21/B01/S24
Bachelor / BSc In Software Development

Unemployment in India:
Challenges and Solutions
The unemployment rate in India rose to 7.2 percent in February 2019, the
highest since September 2016, and also up from 5.9 percent in February 2018,
according to the latest data compiled by the Centre for Monitoring Indian
Economy (CMIE).
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 labor force.
National Sample Survey Organization (NSSO) defines employment and
unemployment on the following activity statuses of an individual:
 Working (engaged in an economic activity) i.e. 'Employed'.
 Seeking or available for work i.e. 'Unemployed'.
 Neither seeking nor available for work.
The first two constitutes labour force and unemployment rate is the percent of the
labour force that is without work.
Unemployment rate = (Unemployed Workers / Total labour force) × 100
Types of Unemployment in India
 Structural Unemployment:
It is a category of unemployment arising from the mismatch
between the jobs available in the market and the skills of the
available workers in the market.
Many people in India do not get job due to lack of requisite skills
and due to poor education level, it becomes difficult to train them.
 Cyclical Unemployment:
It is result of the business cycle, where unemployment rises during
recessions and declines with economic growth. Cyclical
unemployment figures in India are negligible. It is a phenomenon
that is mostly found in capitalist economies.
 Technological Unemployment:
It is loss of jobs due to changes in technology.In 2016, World Bank
data predicted that the proportion of jobs threatened by automation
in India is 69% year-on-year.
 Frictional Unemployment:
The Frictional Unemployment also called as Search
Unemployment, refers to the time lag between the jobs when an
individual is searching for a new job or switching between the jobs.
In other words, an employee requires time for searching a new job
or shifting from the existing to a new job, this inevitable time delay
causes the frictional unemployment.
It is often considered as a voluntary unemployment because it is
not caused due to the shortage of job, but in fact, the workers
themselves quit their jobs in search of better opportunities.
 Vulnerable Employment
This means, people working informally, without proper job
contracts and thus sans any legal protection. These
persons are deemed ‘unemployed’ since records of their
work are never maintained. It is one of the main types of
unemployment in India.
 Disguised Unemployment:
It is a phenomenon wherein more people are employed
than actually needed. It is primarily traced in the
agricultural and the unorganized sectors of India.
 Seasonal Unemployment:
It is an unemployment that occurs during certain seasons
of the year. Agricultural laborer’s in India rarely have
work throughout the year.
Causes of Unemployment in
India
 Large population.
 Low or no educational levels and vocational skills of
working population.
 Inadequate state support, legal complexities and low
infrastructural, financial and market linkages to small/
cottage industries or small businesses, making such
enterprises unviable with cost and compliance overruns.
 Huge workforce associated with informal sector due to
lack of required education/skills, which is not captured in
any employment data. For ex: domestic helpers, 3/6
construction workers etc.
 The syllabus taught in schools and colleges, being not as
per the current requirements of the industries. This is the
main cause of structural unemployment.
 Inadequate growth of infrastructure and low investments
in manufacturing sector, hence restricting employment
potential of secondary sector.
 Low productivity in agriculture sector combined with lack
of alternative opportunities for agricultural worker which
makes transition from primary to secondary and tertiary
sectors difficult.
 Regressive social norms that deter women from
taking/continuing employment
Government Initiatives to Address
Unemployment
The Government of India has implemented a range of

initiatives and policies to address the unemployment crisis and
promote job creation. These efforts span across various
sectors and target different segments of the population.
Impacts of Unemployment in
India
 The problem of unemployment gives rise to the problem of
poverty.
 Young people after a long time of unemployment indulge in
illegal and wrong activities for earning money. This also leads
to increase in crime in the country.
 Unemployed persons can easily be enticed by antisocial
elements. This makes them lose faith in democratic values of
the country.
 It is often seen that unemployed people end up getting addicted
to drugs and alcohol or attempts suicide, leading losses to the
human resources of the country.
 It also affects economy of the country as the workforce that
could have been gainfully employed to generate resources
actually gets dependent on the remaining working population,
thus escalating socioeconomic costs for the State. For
instance, 1 percent increase in unemployment reduces the
GDP by 2 percent
Promoting Entrepreneurship and
Self-Employment
In addition to addressing the supply-side challenges of unemployment,

the government has also focused on fostering an entrepreneurial
ecosystem and promoting self-employment opportunities.
The Start-up India initiative

provides comprehensive support to
aspiring entrepreneurs, including
access to funding, mentorship, and
a favourable regulatory
environment. This has helped
catalyse the growth of the start-up
ecosystem and create new job
opportunities.
Start-up India
Alongside these initiatives, the

government has also emphasized the
importance of skill development and
vocational training to equip individuals
with the necessary skills to start and
grow their own enterprises, ensuring
the long-term sustainability of self-
employment.
Skill Development
Various self-employment schemes,
such as the Prime Minister's
Employment Generation Programme
(PMEGP) and the Stand-Up India
scheme, provide financial and advisory
support to individuals interested in
starting their own businesses, fostering
an entrepreneurial culture.
Self-Employment Schemes
The government has also focused

on the development of micro, small,
and medium enterprises (MSMEs),
which are a significant source of
employment in the country.
Initiatives such as the MSME
Promotion and Skill Development
Programme aim to support the
growth and sustainability of these
enterprises.
MSME Development
Conclusion: The
Road Ahead
Addressing the unemployment crisis in India is a complex and
multifaceted challenge that requires a comprehensive and sustained
effort from the government, the private sector, and civil society. While
significant progress has been made through various initiatives and
policy interventions, there is still a long way to go to achieve full
employment and ensure a prosperous and inclusive future for all
citizens.
Going forward, it is crucial to continue strengthening the education
and skill development ecosystem, fostering an entrepreneurial
culture, promoting the growth of the manufacturing and industrial
sectors, and implementing effective social security measures. By
addressing the root causes of unemployment and empowering the
workforce, India can unlock its immense potential and create a
brighter future for its people.

ECO - Tanmay Rane - IT02460020S23

Uploaded by

Copyright:

Available Formats

ECO - Tanmay Rane - IT02460020S23

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ECO - Tanmay Rane - IT02460020S23

Uploaded by

Copyright:

Available Formats

Unemployment in India

TANMAY VIJAY RANE

Batch No. IT0246/C21/B01/S24

Bachelor / BSc In Software Development

Unemployment occurs when a person who is actively searching for employment

The Government of India has implemented a range of

In addition to addressing the supply-side challenges of unemployment,

The Start-up India initiative

Alongside these initiatives, the

The government has also focused

You might also like