Class 12 Economics Long Questions with Answers - Employment: Growth, Informalisation, and other issues

Q.1 What are the causes of informalisation of workforce in India?
Ans. The following are the causes of informalisation of workforce in India:
(i) Close Down of the Enterprises: Many enterprises were incurring losses during 1980’s and 90’s and hence, were closed down. This had driven a large number of workers in informal sector. For example, in the early 1980’s, textile mills all over the country began to close down. In Mumbai, the mills closed rapidly. But in Ahmedabad, the close-down process spread over 10 years due to strong trade unions. Approximately 80,000 permanent workers and over 50,000 non-permanent workers lost their jobs and were driven to the informal sector.
(ii) Losses Making Public Sector : Due to the losses incurred by public sector enterprise, the Government of India either disinvests or closes down these enterprises. This causes informalisation of workforce.
(iii) Increasing Population: Employment generation in the formal sector fail to match the needs of rapidly increasing population. As a result, people are forced to take up casual jobs to earn a living.
(iv) Unemployment: The number of unemployed persons in India is increasing. Due to limited job opportunities in government or formal sector, they have to work in informal sector.

Q.2. How are the activities in the economy classified on the basis of employment conditions?
Ans. The activities in the economy on the basis of employment conditions are classified as organised sector and unorganised sector.
(i) Organised Sector: It covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. Its features are:

• Formal processes and procedures 
• Proper rules and regulations 
• Job security 
• Fixed number of job hours, paid overtime for working more 
• Get paid leave, payment during holidays 
• Get provident fund, gratuity and pensions on retirement 
• Safe working environment

(ii) Unorganised Sector : Unorganised sector comprises of small and scattered units, which are largely outside the control of the government. Its features are: 

• No rules and regulations 
• Irregular and low-paid jobs
• No provision for overtime, leaves, etc. 
• No job security 
• Social discrimination

Q.3. What are the causes of unemployment in India?
Ans. The following are major causes of unemployment in India:
(i) Increase in Population: There has been tremendous increase in the population in India since 1951. Consequently the number of working population has also increased. Thus, increasing pressure of population has accentuated the problem of unemployment.
(ii) Failure of Planning: Planning could not create as many jobs as the number of jobs-seekers. Thus, faulty planning is also responsible for unemployment.
(iii) Neglect of Agriculture: Agriculture was not paid due attention during different plans. Comparatively less expenditure was made on this sector. As a result, agriculture could not develop fully.
(iv) Neglect of Small Scale and Cottage Industries: Small scale and cottage industries are labour intensive. But these industries could not develop in India appreciably. The plans laid more stress on capital intensive heavy, basic and large industries.
(v) Slow Industrial Growth: Industrial growth rate has been very slow in India due to various reasons. It has increased urban unemployment.
(vi) Defective Education System: Our education system lays more emphasis on ‘general’ education rather than ‘vocational’ one. It is not job-oriented and this leads to rapid increase in white-collar unemployment.

Q.4. Explain the various self-employment and wage generation programmes initiated by the government to solve the problem of unemployment.
Ans. The various self-employment and wage generation programmes initiated by the government to solve the problem of unemployment are:
(i) Food for work Programme (FWP): FWP was launched in the 1970s for the upliftment of the poor. Under this programme, foodgrains are distributed against the wage work.
(ii) Prime Minister’s Rozgar Yojana (PMRY): This programme has been implemented by the Khadi and Village Industries Commission, which aims at creating self-employment opportunities in rural areas and small towns. One can get financial assistance with bank loans to set up small enterprises under this programme. Under PMRY, the educated unemployed from low-income families in both rural and urban areas can get financial help to set up any type of industry, which generates employment.
(iii) Swarna Jayanti Shahari Rozgar Yojana (SJSRY): It aims at creating employment opportunities, both self-employment and wage employment in urban areas. Individuals were given financial assistance under self-employment programmes.
(iv) Swarnajayanthi Gram Swarozgar Yojana: Sawarnajayanthi Gram Swarozgar Yojana was launched in April 1999 and is the only self-employment programme currently being implemented. It aims at promoting micro enterprises and to bring the assisted poor families (Swarozgaris) above the poverty line by organising them into Self-Help Groups through the process of social mobilisation, training and capacity building and provision of income generating assets through a mix of Bank Credit and Government subsidy.
(v) Sampoorna Grameen Rozgar Yojana (SGRY): SGRY was launched in September 2001. The schemes of Jawahar Gram Samridhi Yojana and Employment Assurance Scheme have been fully integrated with SGRY. The objective of the scheme is to provide additional wage employment along with food security, creation of durable community, social and economic assets and infrastructure development in the rural areas. The scheme envisages generation of 100 man days of employment in a year.
(vi) National Food for Work Programme (NFWP): National Food for Work Programme was launched on November 14, 2004 in 150 most backward districts of the India. It is implemented as a 100 per cent centrally sponsored scheme and the foodgrains are provided to States free of cost. The objective of the programme was to intensify the generation of supplementary wage employment.