Unemployment in India | Lucent for GK - UPSC PDF Download

Introduction

Unemployment is a critical issue that affects the socio-economic fabric of any nation. In India, it has been a matter of concern for policymakers and citizens alike. Recently, the National Statistical Office (NSO) released the Periodic Labour Force Survey (PLFS) for July-September 2022, providing insights into the country's employment landscape.

Key Findings of PLFS (July-September 2022)

The PLFS revealed essential indicators related to unemployment in urban areas for individuals aged 15 and above. Here are the key findings:

• Unemployment Ratio: The percentage of unemployed persons among those in the labour force. The unemployment rate decreased to 7.2% from 9.8% compared to the same period in 2021. The rate was 6.6% for men and 9.4% for women.
• Worker-Population Ratio (WPR): The percentage of employed individuals in the population. The WPR increased to 44.5% from 42.3% in 2021. Among men, the WPR was 68.6%, and among women, it was 19.7%.
• Labour Force Participation Rate (LFPR): The percentage of individuals in the labour force who are working or seeking employment. The LFPR rose to 47.9% from 46.9% in 2021. Among men, the LFPR was 73.4%, and among women, it was 21.7%.

Understanding Periodic Labour Force Survey (PLFS)

To address the need for more frequent labour force data, the NSO launched the Periodic Labour Force Survey (PLFS) in April 2017. The survey serves two primary objectives:

• Estimating key employment and unemployment indicators for urban areas every three months in the Current Weekly Status (CWS).
• Estimating employment and unemployment indicators annually for both rural and urban areas, considering both Usual Status and CWS.

Exploring Types of Unemployment in India

Unemployment in India manifests in various forms due to distinct socio-economic factors. Here are the different types of unemployment prevalent in the country:

• Disguised Unemployment: This phenomenon occurs when more people are employed than needed, primarily seen in the agricultural and unorganized sectors in India.
• Seasonal Unemployment: Seasonal unemployment arises during specific periods of the year, particularly affecting agricultural laborers who find work only during certain seasons.
• Structural Unemployment: This type of unemployment results from a mismatch between job opportunities available in the market and the skills possessed by the available workforce. Lack of requisite skills and inadequate education levels often hinder job placement.
• Cyclical Unemployment: Cyclical unemployment is linked to the business cycle, with unemployment rates rising during economic recessions and declining during periods of growth. India experiences negligible cyclical unemployment, mainly observed in capitalist economies.
• Technological Unemployment: Jobs are lost due to technological advancements that render certain job roles obsolete. India faced predictions of 69% year-on-year job loss due to automation in 2016, as per World Bank data.
• Frictional Unemployment: Also known as Search Unemployment, it refers to the temporary time lag between jobs when individuals are transitioning between positions or searching for new employment opportunities.
• Vulnerable Employment: This type of employment involves informal work arrangements without proper job contracts, leading to a lack of legal protection for workers. Many of these individuals are not recorded in official employment statistics.

Causes of Unemployment in India

Unemployment in India is influenced by various factors, contributing to the complex job market. Some of the major causes include:

• Social Factors: The prevalent caste system in India restricts work opportunities for specific castes in certain regions. Moreover, in large joint families with substantial combined income, some individuals may choose not to work.
• Rapid Population Growth: The continuous population growth poses a significant challenge for India, leading to increased competition for limited job openings.
• Dominance of Agriculture: Despite industrial growth, nearly half of the workforce remains dependent on agriculture, which offers seasonal and limited employment opportunities.
• Decline of Cottage and Small Industries: The rise of larger industries has adversely affected cottage and small industries, resulting in unemployment among artisans.
• Immobility of Labour: Low mobility of labor, driven by family attachments, linguistic differences, and climate variations, restricts the workforce from seeking employment in distant areas.
• Deficiencies in Education System: India's education system may not adequately equip individuals with the specialized skills required by modern job markets, leading to unemployment even among willing workers.

Government Initiatives to Curb Unemployment

The Indian government has implemented several initiatives to tackle the unemployment challenge and promote job creation. Some of the notable initiatives include:

• Support for Marginalized Individuals for Livelihood and Enterprise (SMILE): A program designed to provide support and resources to marginalized individuals to establish sustainable livelihoods.
• PM-DAKSH (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi): An initiative focused on promoting skill development and enhancing employability among the youth.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): A flagship social welfare program providing rural households with guaranteed employment opportunities.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): A skill development program aimed at enhancing the employability of youth by providing them with industry-relevant training.
• Start Up India Scheme: An initiative to foster entrepreneurship and support start-ups, encouraging job creation through innovation.

Conclusion

Unemployment in India remains a complex issue with various contributing factors. The recent findings from the Periodic Labour Force Survey indicate positive developments in the urban employment scenario. However, addressing the different types of unemployment and tackling the root causes requires sustained efforts from the government, private sector, and civil society. Through targeted initiatives and policy reforms, India can work towards creating a more inclusive and robust job market, fostering economic growth and prosperity for all.