Unemployment In India PDF

CHAPTER - 7 : UNEMPLOYMENT IN INDIA Unemployment Employment Fig. 7.1 : Unemployment in India Introduction : Meaning of Unemployment :...

CHAPTER - 7 : UNEMPLOYMENT IN INDIA Unemployment Employment Fig. 7.1 : Unemployment in India Introduction : Meaning of Unemployment : India is a developing economy and one Normally anyone who is not gainfully of the fastest growing economies of the world. employed in any productive activity is said to be The problem of unemployment is considered to unemployed. In economics, unemployment is to be studied with respect to be the biggest challenge to the development of a) nature India. Fig. 7.1 gives an idea about the problem b) working age group of unemployment in India. Unemployment c) demand for and supply of labour leads to a waste of human resources. Long term d) prevailing wage rate. unemployment results in mass poverty and slow The rate of economic growth is not fast economic development. Mostly, young people enough to generate adequate jobs to absorb the face the problem of unemployment. Young expanding labour force. 'Unemployment is a situation in which people are a major human resource, key agents people in the age group of 15 to 59 years are able for social change and driving force for economic and willing to work at the prevailing wage but development and technological innovation. unable to get a job'. India has considerable young population For a person to be considered employed, it hence unemployment among youth is the most is essential that the person should be engaged critical challenge of the 21st century. There is an in work for a minimum number of hours per imbalance between employment opportunities week. According to National Sample Survey and increase in population. This has resulted Organization (N.S.S.O.) in large scale unemployment. So generally i) In India, a person is considered unemployed if he works for less than fourteen hours unemployed people are involved in unproductive per week. work like gambling and indulge in anti-social ii) Those who work for 15 - 28 hours a week and anti-national activities. are considered as underemployed. 43 iii) Person working for eight hours per day A) Rural Unemployment : i.e. 273 days of the year is considered The unemployment found in villages is 'employed' on a standard basis. called rural unemployment. Following are the types of rural unemployment : You should know : 1) Seasonal Unemployment : A large number 1) Involuntary unemployment : It refers to a situation in which people are willing to of people remain unemployed during the work, but there is no work for them due to slack season or in the off season. Agriculture excess of labour force in relation to demand being a seasonal occupation, farmers have for labour. to depend upon monsoon for cultivation. Majority of the labour force in the agricultural 2) Voluntary unemployment : It is a type sector remain unemployed for nearly 5-7 of self unemployment where a person is fit months in a year. Seasonal unemployment is to work but not willing to work. also found in tourism, marriage bands, sugar 3) Underemployment : It is a situation factories, ice factory, fisheries etc. where a person’s capacity to work is under utilised. 2) Disguised Unemployment : It is also known as invisible unemployment. Disguised 4) Full employment : It is a hypothetical unemployment is generally found in situation in which all available resources are being used in the most efficient manner. villages in India. It is a situation in which more people are doing work than actually Types of Unemployment : required. Even if some are withdrawn, There are various types of unemployment. production does not suffer. In other words We can classify unemployment into various it refers to a situation of employment categories. with surplus manpower in which some Unemployment workers have zero marginal productivity. Rural unemployment Urban unemployment The excessive pressure on land leads Seasonal Educated to disguised unemployment in rural areas. unemployment unemployment It is estimated that nearly 20% of the Disguised Industrial labour force is disguisedly unemployed unemployment unemployment in rural areas. Joint family system, lack of alternative job opportunities result in Technological Cyclical overcrowding in agriculture. These are the unemployment unemployment main reasons for disguised unemployment. Frictional Structural unemployment unemployment Five workers = Ten quintals of jowar Sixteen workers = Ten quintals of jowar Fig. 7.2 : Disguised Unemployment 44 B) Urban Unemployment : lack of proper training, e.g. computerisation, Urban unemployment refers to introduction of robotic technology etc. unemployment found in the urban areas i.e. ii) Frictional Unemployment : Frictional towns and cities of the country. Following are the unemployment is caused due to breakdown types of urban unemployment. of machinery, power failure, shortage of raw 1) Educated Unemployment : When people materials, strikes by workers etc. Frictional are educated and willing to work but do not unemployment is temporary by nature. get jobs is known as educated unemployment. This type of unemployment is found among iii) Cyclical Unemployment : Cyclical matriculates, undergraduates, graduates unemployment is the result of cyclical and post graduates. Casual approach fluctuations in the level of business activity. to education, imbalance between job The economy passes through phases of opportunites and number of educated youth, prosperity and depression. During the preference for white collar jobs, lack of period of depression, effective demand employable skills, lack of awareness about falls which leads to a fall in the prices available educational opportunities are the and profits earned by the producers. As a main reasons for unemployment among result, there is a corresponding decline in educated youth in India. investment and production of commodities. A fall in production leads to a fall in 2) Industrial Unemployment : It refers to employment. As a result, workers are thrown unemployment in the industrial sector. out of jobs during the period of depression. The unemployed workers may be skilled or unskilled. This is generally a form iv) Structural Unemployment : This type of of open unemployment. Slow industrial unemployment arises due to drastic changes growth, rapid growth of population, lack in the economic structure of a country. These of training facilities, low adaptability to changes may affect either the supply of or modern technology, inconvenient location of demand for a factor of production. Structural industries, low mobility of labour etc. are the changes in the economy are caused by main reasons for industrial unemployment. changes in government policies, shortage of capital, shifting of industry from one region Following are the types of Industrial to another etc. Structural unemployment unemployment : is a long term phenomenon. Structural i) Technological Unemployment : unemployment takes place because of a Technological unemployment arises mismatch between the skills of workers because of changes in technology. Modern and the jobs that are actually available, technology is capital-intensive and requires e.g. i) horse carts had been replaced by auto less labourers. When new techniques are rickshaws. ii) introduction of computerised introduced in the industrial sector, existing typing has caused unemployment among workers are displaced from their jobs due to manual typists. Extent of Unemployment in India : Employment and Unemployment (in million) Year Labour Force Employed Unemployed Unemployment rate in (%) 1993 - 94 381.94 374.45 7.49 2.0 1999 - 2000 406.85 397.88 8.97 2.2 2004 - 05 468.73 457.56 11.17 2.4 2009 - 10 472.32 462.49 9.84 2.1 2011 - 12 483.75 472.91 10.84 2.2 Table : 7.1 Source : Economic and Political Weekly (June 7, 2014) 45  Do you know? State-wise unemployment rates in India (2015-16) Ranks State Unemployment Ranks State Unemployment (Per 1000) (Per 1000) 1 Tripura 197 16 Manipur 57 2 Sikkim 181 17 Odisha 50 3 Kerala 125 18 West Bengal 49 4 Himachal Pradesh 106 19 Meghalaya 48 5 Assam 96 20 Haryana 47 6 Arunachal Pradesh 89 21 Madhya Pradesh 43 7 Nagaland 85 22 Tamilnadu 42 8 Jharkhand 77 23 Andhra Pradesh 39 9 Uttar Pradesh 74 24 Mizoram 30 10 Jammu and Kashmir 72 25 Telangana 28 11 Rajasthan 71 26 Maharashtra 21 12 Uttarakhand 70 27 Chhattisgarh 19 13 Goa 61 28 Karnataka 15 14 Punjab 60 29 Gujarat 09 15 Bihar 60 Source : Report on Fifth Annual Employment-Unemployment Survey (2015-16), GoI. Find out : Calculate Q2 from the above leading to unemployment. data. Use the ranks of the States given as 3) Excessive use of machinery : In India, numerical data. Identify the state on the manpower is available in large quantities. basis of the obtained partition value. Under these circumstances, the country would have labour-intensive technique of Causes of Unemployment : production. However, not only in industries, Following are the major causes of but also in agriculture, producers are unemployment : increasingly substituting capital for labour. Where capital is in abundant supply, use of 1) Jobless growth : Since independence, the automatic machines and other sophisticated rate of growth of employment in India equipment is both rational and justified. has been considerably less than the rate But in India, this policy results in large scale of economic growth. Moreover, the rate of unemployment. economic growth has not been adequate enough to absorb the increasing labour 4) Lack of skill development programmes : force. As a result, there is widespread Vocational skill development courses unemployment. which are compatible to Indian industry are comparatively less in number. So, there is a 2) Increase in labour force : Death rate has dearth of skilled man power needed by the rapidly declined without a corresponding industry. fall in birth rate, therefore the country has registered an unprecedented population 5) Expectations towards employment : growth. This was naturally followed by Educated youth in India aspire for white an equally large expansion in labour force collar job. There is a lack of innovative and 46  entrepreneurial spirit to organize economic activities where they can be self-employed. You should know : Graduates prefer to remain unemployed General Measures to reduce till they get a job which is upto their Unemployment : expectations in terms of salary and nature 1) Development of agricultural sector of work. 2) Provision for alternative occupation 6) Seasonal nature of agriculture : Agriculture in India is seasonal by nature. 3) Development of infrastructure It depends on monsoon. Lack of irrigation 4) Reforms in the educational system facilities, poor soil fertility, outdated 5) Development of Tourism production techniques, non-availability of certified seeds and fertilizers are the factors 6) Use of labour-intensive techniques that reduce the capacity of agriculture for 7) Development of Information technology other gainful employment throughout the and communication year. The labourers are employed only for a few months in a year. For the rest of the 8) Provision for vocational training and skill year, the labour force remains jobless. development facilities 7) Slow rate of economic development : 9) Rural industrialization The overall economic development of 10) Motivation for self employment India is very slow. Inadequate irrigation facilities, fertilizers, unsatisfactory Specific Measures undertaken by the growth of infrastructure are all due to Government to generate employment inadequate industrial expansion. As a opportunities : result, employment opportunities have not increased enough in the rural sector to 1) Employment Guarantee Scheme (EGS) : absorb the growing labour force. Employment Guarantee Scheme was 8) Migration of rural population : There has first introduced by the Government of been a continuous migration of people from Maharashtra on 28th March 1972. This rural to urban areas in search of jobs. This scheme was intended to provide productive has increased the problem of unemployment employment to the rural population in urban areas. and thereby solve the problem of rural unemployment and poverty. Under this You should know : scheme, government assures to provide Effects of Unemployment minimum employment opportunities. Due to its success in Maharashtra, EGS was Economic effects Social effects implemented in other states as well. 1) Waste of human 1) Social tension 2) Swarnjayanti Gram Swarozgar Yojana resources   and unrest (SGSY) : This scheme was launched in 2) Difficult to implement 2) Loss of human April, 1999 after restructuring the Integrated welfare schemes   dignity Rural Development Programme (IRDP) and 3) Poverty and income 3) Helplessness allied schemes. It is the only self-employment inequality scheme for the rural poor in India. 4) Growth of informal sector 3) Swarna Jayanti Shahari Rozgar Yojana 5) High dependency ratio (SJSRY) : This scheme was launched 47  in December, 1997. It provides gainful 8) Deen Dayal Upadhyaya Grameen employment to the urban unemployed Kaushalya Yojana 2014 : It is the most and underemployed. It included self- important placement linked skill training employment, women self-employment programme under the Ministry of Rural programme, skill training for employment Development announced on September promotion and urban wage employment 23, 2014. The mission of this scheme is to programme. For this scheme, Central reduce poverty as well as provide gainful Government shares 75% of the cost and and sustainable employment through State Government shares 25% of the cost. regular wages. The focus of this programme 4) Pradhan Mantri Rozgar Yojana (PMRY) : is on the rural youth from poor families, in This scheme is being implemented since the age group of 15-35 years. 1993 to create and provide sustainable self- 9) National Policy for Skill Development employment opportunities to more than one and Entrepreneurship - 2015 : The first million educated unemployed youth. National policy on skill development was 5) Training Rural Youth for Self-employment notified in 2009 to promote private sector (TRYSEM) : It was initiated in 1979 with participation via innovative funding models. the objective of tackling unemployment The objective of this scheme is to problem among the rural youth. It aimed at co-ordinate and strengthen factors training about 2 lakh rural youth every year essential for growth of entrepreneurship to enable them to become self-employed. across the country. This would include : TRYSEM was merged into Swarnajayanti i) Promote entrepreneurship culture Gram Swarozgar Yojana in April 1999. ii) Encourage entrepreneurship as a viable 6) Jawahar Rozgar Yojana (JRY) : On 1st career option through advocacy April 1989, the Government announced a iii) Promote entrepreneurship among women new wage employment scheme, the Jawahar Rozgar Yojana for intensive employment 10) Start up India Initiative : It was introduced creation in 120 backward districts. It was in January 2016 with an aspiration to impart restricted to rural area. With effect from more "strength and inspiration to the talented April 1999, it was renamed as Jawahar young generation of India to do something Gram Samrudhi Yojana (JGSY). new for India and humanity." 7) Mahatma Gandhi National Rural 11) Pradhan Mantri Kaushal Vikas Yojana- Employment Guarantee Scheme (2016-20) : The objective of this scheme (MGNREGS) : Since 2nd October 2009, is to encourage skill development among National Rural Employment Guarantee youth by providing monetary rewards for Scheme has been renamed as Mahatma successful completion of approved training Gandhi National Rural Employment programmes. The government has allocated Guarantee Scheme. This scheme provides a budget of ` 12,000 crores till 2020 for at least 100 days of guaranteed wage implementation of the scheme. employment in a financial year to at least one member of every rural household whose adult member volunteers to do unskilled manual work. 48  EXERCISE Q. 1. Find the odd word out : Q. 4. Observe the following chart and answer the 1) Urban unemployment - following questions. Educated unemployment, Industrial Unemployment unemployment, Disguised unemployment, Rural unemployment Urban unemployment Technological unemployment Seasonal Educated 2) States with high rates of unemployment - unemployment unemployment Goa, Punjab, Maharashtra, Tripura Disguised Industrial unemployment unemployment 3) Employment Guarantee Scheme 1972, Jawahar Rozgar Yojana 1989, Technological Cyclical unemployment unemployment Swarnajayanti Gram Swarozgar Yojana 1999 Frictional Structural Development of Tourism unemployment unemployment Q. 2. Identify and explain the concepts from the given 1) Production does not increase if additional worker illustrations : is employed and production does not decrease if worker is reduced from the work. Mention the type 1) Hussain Shaikh employed seven workers less than of unemployment. the usual number of workers on his farm, in spite of 2) A worker is thrown out of job because of this, output remained the same. computerisation. Name this type of unemployment? 3) Sharad was forced to return back to India from 2) Use of new technology in the printing industry has USA due to depression in IT sector. led to unempolyment among several workers. 4) In spite of being a graduate, Vasant is sitting idle 3) Satish has completed his post graduation and is at home. desperately expecting a job. Q. 5. Find out Q1 and Q3 using unemployment rates as 4) In certain agricultural areas of Maharashtra only numerical data : kharif crops are grown, therefore employment is Year Unemployment Rate % available till the month of October. 2009 3.75 2010 3.54 Q. 3. Complete the correlation : 2011 3.53 1) Seasonal unemployment : Tourist guides; 2012 3.62 : Graduates 2013 3.46 2) : Disguised unemployment; Urban 2014 3.41 unemployment : Industrial unemployment 2015 3.49 2016 3.51 3) Frictional unemployment : Shortage of raw 2017 3.52 materials ; : Fluctuations in business activity Q. 6. Answer the following in detail : 1) Explain the types of Industrial unemployment in 4) MGNREGS : guaranteed wage employment; India. TRYSEM : 2) Explain the causes of unemployment in India. 5) : Waste of resources. Social effect : loss 3) Explain the measures taken by the government to of human dignity reduce unemployment.  49