Unemployment in India | Famous Books for UPSC Exam (Summary & Tests) PDF Download

Introduction

Unemployment is a critical issue that affects the socio-economic fabric of any nation. In India, it continues to challenge policymakers and citizens alike. Recently, the National Statistical Office (NSO) released the Periodic Labour Force Survey (PLFS) for October–December 2024, offering valuable insights into the country's urban employment scenario.

Key Findings of PLFS (October–December 2024)

The PLFS captured essential indicators related to unemployment in urban areas for individuals aged 15 and above. The key statistics are:

• Unemployment Rate (UR): The percentage of unemployed persons among those in the labour force stood at 6.3%, a decline from previous periods. The rate was 5.6% for males and 8.2% for females.
• Worker-Population Ratio (WPR): The proportion of employed individuals in the population rose to 47.5%. Among males, the WPR was 71.0%, while for females it was 23.7%.
• Labour Force Participation Rate (LFPR): The share of the population either working or seeking work reached 50.6%. The LFPR for males was 75.4%, and for females, it was 25.8%

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

• Support for Marginalized Individuals for Livelihood and Enterprise (SMILE): Launched in February 2022, this scheme supports transgender persons and those engaged in begging, with a budget of ₹365 crore (2021–26).
• PM-DAKSH: Focuses on skill development for SCs, OBCs, and other marginalized groups. Budget allocation for FY 2024–25 is ₹80 crore.
• MGNREGA: Guarantees rural employment and acts as a safety net for the poor.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides industry-relevant skill training to enhance employability.
• Startup India Scheme: Encourages innovation and entrepreneurship as a route to job creation.

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.