Unemployment in India

Unemployment in India

According to the latest Periodic Labour Force Survey (PLFS) released by the National Statistical Office (NSO):

• India’s urban unemployment rate jumped to 12.6 per cent in the April-June quarter of 2021, compared to 9.3 per cent in the January-March quarter.
• It, however, eased from the 20.8 percent level seen during the first wave of the Covid pandemic.

Impact of the pandemic:

The biggest casualty of the pandemic will be joblessness. The country’s unemployment rate has risen through much of April, having hit 7.4%, and threatens to climb further to around 8% significantly higher than the 6.5% in March, according to CMIE.

• Approximately 10 million salaried jobs have been lost, across urban and rural India, and one is not sure how many people will get back their livelihoods.
• Urban females fared worse than urban males. In the 15-29 age group, the unemployment rate for urban females stood at 31 per cent compared with 24 per cent for males during April-June 2021.
• The unemployment rate for urban females and males stood at 36 per cent and 34.3 percent, respectively, in April-June 2020.

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 unorganised sectors of India.

Seasonal Unemployment:

• It is an unemployment that occurs during certain seasons of the year.
• Agricultural labourers in India rarely have work throughout the year.

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 jobs due to lack of requisite skills and due to poor education level, it becomes difficult to train them.

Cyclical Unemployment:

• It is a 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 the 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 is 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 frictional unemployment. It is often considered as voluntary unemployment because it is not caused due to the shortage of jobs, 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.

Causes of Unemployment:

• Large population.
• Low or no educational levels and vocational skills of the 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 the informal sector due to lack of required education/ skills, which is not captured in any employment data. For ex: domestic helpers, construction workers etc.
• The syllabus is 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 the agriculture sector combined with lack of alternative opportunities for agricultural workers which makes transition from primary to secondary and tertiary sectors difficult.
• Regressive social norms that deter women from taking/continuing employment.

Impact:

• 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 an 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 the 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.

Steps Taken by Government:

Integrated Rural Development Programme (IRDP) was launched in 1980 to create full employment opportunities in rural areas.

Training of Rural Youth for Self-Employment (TRYSEM): This scheme was started in 1979 with the objective to help unemployed rural youth between the age of 18 and 35 years to acquire skills for self-employment. Priority was given to SC/ST Youth and Women.

RSETI/RUDSETI: With the aim of mitigating the unemployment problem among the youth, a new initiative was tried jointly by Sri Dharmasthala Manjunatheshwara Educational Trust, Syndicate Bank and Canara Bank in 1982 which was the setting up of the “RURAL DEVELOPMENT AND SELF EMPLOYMENT TRAINING INSTITUTE” with its acronym RUDSETI near Dharmasthala in Karnataka. Rural Self Employment Training Institutes/ RSETIs are now managed by Banks with active cooperation from the Government of India and State Government.

By merging the two erstwhile wage employment programme – National Rural Employment programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) the Jawahar Rozgar Yojana (JRY) was started with effect from April, 1, 1989 on 80:20 cost sharing basis between the centre and the States.

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): It is an employment scheme that was launched in 2005 to provide social security by guaranteeing a minimum of 100 days paid work per year to all the families whose adult members opt for unskilled labour-intensive work. This act provides Right to Work to people.

Pradhan Mantri Kaushal Vikas Yojana (PMKVY), launched in 2015 has an objective of enabling a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood.

Start Up India Scheme, launched in 2016 aims at developing an ecosystem that promotes and nurtures entrepreneurship across the country.

Stand Up India Scheme, launched in 2016 aims to facilitate bank loans between Rs 10 lakh and Rs. 1 crore to at least one SC or ST borrower and at least one women borrower per bank branch for setting up a greenfield enterprise.

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