UNEMPLOYMENT IN INDIA
Submitted to: Submitted by: Mr.. Mr
Vivek Rai Semester-IX
Section-C Roll No.14
Table of Contents Introduction……………………………………………………………………………3 Indian Labour Market……………………………………………………………….....4 Types of Unemployment………………………………………………………………5 Consequences of Unemployment in India…………………………………………….. !easons for Unemployment……………………………………………………………" C#allen$es %it# re$ard to &out# 'mployment………………………………………...(( )olicy Initiati*es for +eneratin$ 'mployment………………………………………....(, Conclusion……………………………………………………………………………...(!eferences………………………………………………………………………………(
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Introduction India/ t#e %orld0s lar$est democracy/ attainin$ independence in ("4/ %as faced %it# t#e t%in problems of unemployment and po*erty. It adopted t#e socialist form of de*elopment to o*ercome t#ese problems. 1ccordin$ly/ it introduced a system of central plannin$ to attain balanced o*erall $ro%t# %#ile fi$#tin$ po*erty and unemployment. 2o%e*er/ 3.5 per cent annual $ro%t# pro*ed insufficient.
In uly (""(/ by introducin$ t#e e% 'conomicIndustrial )olicy 6')7 India implemented a fundamental s#ift in its economic policy/ adoptin$ market8led economic de*elopment. 9y dismantlin$ t#e restricti*e policies of t#e $o*ernment/ t#e ') displaced t#e dominance of t#e public sector. It released most of industries from t#e control of t#e state. T#e ') opened up international trade and in*estment/ dere$ulation/ initiation of pri*ati:ation/ ta; reforms and inflation8controllin$ measures. T#e main ob
9y ,==4/ India #ad become to be kno%n as an information and communication tec#nolo$y 6ICT7 #ub %it# a #u$e stock of employable IT professionals. IT qualified Indians can be found in practically all parts of t#e %orld. In India/ increased acti*ities %ere also *isible in ot#er sectors suc# as construction/ automobiles/ p#armaceuticals/ $arments/ trade and tourism. India/ %it#in a decade/ re$istered remarkably #i$# +>) $ro%t# rates. >urin$ t#e decade follo%in$ t#e introduction of t#e ')/ India0s a*era$e quarterly +>) $ro%t# %as .45 per cent/ %it# a #istoric #i$# of ((. per cent in >ecember ,==3. Incidentally/ t#e ma
) %ere t#e financial/ soft%are and ICT sectors/ %#ic# employed primarily a youn$ %orkforce.
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9y ,==/ India #ad establis#ed itself as one of t#e %orld0s fastest $ro%in$ economies/ %it# +>) almost reac#in$ (= per cent durin$ ,==?,==. 2o%e*er/ t#e ,== $lobal financial crisis %as a ma). +ro%t# slo%ed si$nificantly to -. per cent in ,==?,=="/ but subsequently reco*ered to .4 per cent in ,=="?,=(=.( T#e annual +>) $ro%t# rate fell to around -.5 per cent for t#e ,=((?,=(, fiscal year and to 5.3 per cent by May ,=(,. India0s +>) is e;pected to impro*ed to 5., A in ,=(4. T#e increasin$ population of qualified youn$ Indians/ on t#e one #and/ and t#e slo%in$ of t#e Indian economy/ on t#e ot#er/ #as caused turmoil amon$ t#e youn$ as t#ey are unable to find
Indian Labour Market T#e population of India as of ,=(4 %as (., billion/ (.5 per cent of t#e $lobal population. 1bout -= per cent of t#e population reside in rural areas.
T#e Indian labour market is classified into t#ree se$mentsB 6i7 6ii7
rural/ %#ic# constitutes about -= per cent of t#e %orkforce t#e or$anised or formal se$ment/ %#ic# accounts for about per cent of t#e
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%orkforce and t#e urban unor$anised or informal sector/ %#ic# accounts for 3, per cent of t#e %orkforce.
T#is means t#at "3 per cent of %orkers are in t#e unor$anised or informal sector/ self8employed or employed as casual %a$e labourers/ de*oid of any effecti*e le$al protection. T%ot#ird of t#e %orkforce of India is employed in a$riculture and rural industries. Dne8t#ird of rural #ouse#olds are a$ricultural labour #ouse#olds subsistin$ on poor %a$e employment. India0s labour force
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makes up about 3" per cent of t#e total population. 1ccordin$ to t#e Eorld 9ank/ t#e Indian labour market in t#e (""=s %as better/ despite acceleration in
T#ese conclusions are based on t#ree main factsB
6i7
a comparison of
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su$$ests t#at
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%orkin$ poor #as increased in t#e past fi*e years and lo%8payin$/ relati*ely unproducti*e/ informal sector
India as a nation is faced %it# massi*e problem of unemployment. Unemployment can be defined as a state of %orklessness for a man fit and %illin$ to %ork. It is a condition of in*oluntary and not *oluntary idleness. Fome features of unemployment #a*e been identified as follo%sB (. T#e incidence of unemployment is muc# #i$#er in urban areas t#an in rural areas. ,. Unemployment rates for %omen are #i$#er t#an t#ose for men. 3. T#e incidence of unemployment amon$ t#e educated is muc# #i$#er t#an t#e o*erall unemployment. 4. T#ere is $reater unemployment in a$ricultural sector t#an in industrial and ot#er ma
Types of Unemployment
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'conomists and social t#inkers #a*e classified unemployment into *arious types. +enerally unemployment can be classified in t%o typesB (1) Voluntary unemployment
In t#is type of unemployment a person is out of
(2) In voluntary unemployment
In t#is type of situation t#e person %#o is unemployed #as no say in t#e matter. It means t#at a person is separated from remunerati*e %ork and de*oid of %a$es alt#ou$# #e is capable of earnin$ #is %a$es and is also an;ious to earn t#em. @orms and types of unemployment accordin$ to 2ock are. a. Cyclical unemployment 8 T#is is t#e result of t#e trade cycle %#ic# is a part of t#e capitalist system. In suc# a system/ t#ere is $reater unemployment and %#en t#ere is depression a lar$e number of people are rendered unemployed. Fince suc# an economic crisis is t#e result of trade cycle/ t#e unemployment is a part of it. b. udden unemployment 8 E#en at t#e place %#ere %orkers #a*e been employed t#ere is some c#an$e/ a lar$e number of persons are unemployed. It all #appens in t#e industries/ trades and business %#ere people are employed for a
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c. Unemployment caused by failure of Industries 8 In many cases/ a business a factory or an industry #as to close do%n. T#ere may be *arious factors responsible for it t#ere may be dispute amon$st t#e partners/ t#e business may $i*e #u$e loss or t#e business may not turn out to be useful and so on. d. Unemployment caused by deterioration in Industry and business 8 In *arious industries/ trades or business/ sometimes/ t#ere is deterioration. T#is deterioration may be due to *arious factors. In efficiency of t#e employers/ keen competitions less profit etc. are some of t#e factors responsible for deterioration in t#e industry and t#e business. e. easonal unemployment 8 Certain industries and traders en$a$e %orkers for a particular season. E#en t#e season #as ended t#e %orkers are rendered unemployed. Fu$ar industry is an e;ample of t#is type of seasonal unemployment. T#e problem of unemployment #as becomin$ a colossal. Harious problems #a*e caused t#is problem. T#ere are indi*idual factors like a$e/ *ocational unfitness and p#ysical disabilities %#ic# restrict t#e people. ';ternal factors include tec#nolo$ical and economic factors. T#ere is enormous increase in t#e population. '*ery year India adds to #er population afres#. More t#an t#is e*ery year about 5 million people become eli$ible for securin$ ue to t#ese industries often face economic loses and production comes do%n. Fince %orkers do not $et any salary or %a$es durin$ t#e strike period t#ey suffer from economic #ards#ips. T#ey become permanently or temporarily unemployed. Today youn$ people are not ready to take
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$eneratin$ sc#emes and pro$rammes o*er t#e years but in t#e absence of proper implementation and monitorin$ #a*e failed to ac#ie*e t#e required tar$ets. !ecently U)1 +o*ernment #as come up %it# !ural 'mployment +uarantee pro$ram %#ic# aims to pro*ide minimum days of employment to people li*in$ in t#e *illa$es. T#is is a laudable pro$ramme if implemented sincerely because it %ill pro*ide employment to people durin$ natural calamities like drou$#t/ floods etc. T#e remedial measures for reducin$ unemployment may lay $reater emp#asis on creation of opportunities for self 8employment/ au$mentation of producti*ity and income le*els of t#e %orkin$ poor/ s#ift in emp#asis from creation of relief type of employment to t#e buildin$ up of durable producti*e assets in t#e rural areas and instead of attemptin$ to re*ert some%#at to protectionist policies t#e pace of pri*ati:ation may be accelerated.
Conse!uences of Unemployment in India Dne of t#e consequences of unemployment mentioned in t#e article is t#at t#ere %ill be and increase in informal employment %#ere ). Fince t#ere are less people %orkin$/ t#e amount of output is less t#an t#e le*el t#e economy is capable of producin$. 1lso/ t#ere %ill be a decrease in t#e amount of ta; re*enue t#e $o*ernment $ets. Fince people are unemployed/ t#ey don0t earn any income/ t#at means t#ey don0t #a*e to pay income ta;. Lastly/ unemployed people may #a*e difficulties
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findin$ anot#er
"easons for Unemployment
T#e economic sur*ey in ,=(3 stresses t#at in order to ac#ie*e inclusi*e $ro%t#/ India must crea te adequate employment opportunitiesB t#e number of unemployed is lar$e and t#ere are more yout# enterin$ t#e
T#e reasons includeB
Shortage of Jobs
1$riculture #as been t#e dominant sector of labour concentration. Fince (""(/ t#e s#ares of t#e manufacturin$ and ser*ice sectors #a*e $ro%n faster %it# re$ard to +>) and muc# slo%er %it# re$ard to employment/ as %orkin$ met#ods became more capital8intensi*e. 1ccordin$ to *arious estimates/ producti*ity durin$ t#e period from ,==4 to ,=(= $re% 34 per cent. India0s economic $ro%t# %as t#us more due to producti*ity t#an employment. In t#e %ake of t#e limited creation of additional
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situation forced t#em eit#er to opt for unskilled or casual %ork in t#e informal sector or to enrol for furt#er studies. Many %#o could not afford to $o for furt#er education opted for selfemployment %it# e;tremely lo% returns. T#e lar$e number of self8employed or/ for t#at matter/ casual %orkers is an instance of self8e;ploitation since suc# %orkers are %it#out any effecti*e protection.
Employability
In order to take full ad*anta$e of t#e Jdemo$rap#ic di*idendK/ it is imperati*e for India to transform its labour force into an asset. 1s of no%/ only 5 per cent of t#e %orkforce #a*e under$one any kind of *ocational trainin$/ but e*en many of t#ose are not employable/ since t#e skills acquired #a*e limited market application 6C#andrasek#ar et al. ,==-7. @urt#ermore/ India0s education system is primarily of a $eneralist nature and is not connected to t#e labour market. 1ccordin$ to 1FFCDM/, almost 4= per cent of t#e skilled %orkforce is not employable because t#e acquired education and trainin$ are of substandard quality. T#e +DI recently initiated ma
Skills Mismatch
India is $enerally seen as a labour surplus economy %it# a ma
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Women – Security and Social Restrictions
T#e openin$ up of t#e Indian economy #as created increased employment opportunities for female %orkers/ particularly in IT/ retail/ tra*el and tourism. T#eir full en$a$ement/ #o%e*er/ remains restricted due to problems of personal security/ biased attitudes of co8%orkers and social customs. @aced %it# ineffecti*e protection/ youn$ female %orkers eit#er select
Decent Work Deficit
India #as some of t#e most de*eloped labour le$islation $rantin$ compre#ensi*e protection to its %orkforce. T#e enforcement of t#ese la%s is/ #o%e*er/ lackin$/ resultin$ in unabated e;ploitation/ especially of t#ose employed in t#e informal sector. In addition/ most of t#e ne%
C#allen$es %it# re$ard to &out# 'mployment In an en*ironment of e*er8increasin$ costs of li*in$ and non8e;istent social protection/ a youn$ %orker is condemned to fend for #im8 or #erself and also to pro*ide for dependents. In desperation/ t#ey accept any
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T#e ot#er c#allen$e t#at youn$ people are facin$ is insecurity at t#e %orkplace. !e$ular and continuous formsnof employment #a*e been replaced %it# non8permanent
1s already mentioned/ t#e ma
@inally/ t#e flo% of information on t#e a*ailability of trainin$ andor
1s a result/ youn$ people in India face an en*ironment t#at is not renderin$ t#e desired support. It pro*ides neit#er affordable opportunities to acquire andor up$rade skills nor sufficient information on suitable employment opportunities. In t#e absence of suc# support and any form of social security/ youn$ people/ in desperation/ accept e;ploitati*e employment conditions.
olicy Initiatives for eneratin$ 'mployment T#e concerns of youn$ people #a*e al%ays been at t#e centre of India0s policy formation. T#e )lannin$ Commission of t#e +DI #as stated t#at t#e reco$nition of yout# is *ital for t#e community. 2o%e*er/ yout# unemployment #as not recei*ed t#e necessary attention 6Hisaria (""7. India0s first ational &out# )olicy/ formulated in ("/ reco$nised t#at t#e most important component of a yout# pro$ramme #as to be t#e elimination of unemployment. Considerin$ t#e limited ac#ie*ement of t#e ob
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&out# )olicy %as announced in ,==3 t#at %as aimed at $al*ani:in$ youn$ people to rise up to ne% c#allen$es. T#e ,==5 ational Council for Fkill >e*elopment 6CF>7 tar$eted skills de*elopment as a ma
Right to Work
T#e Constitution of India/ under 1rticle 4(/ pro*ides t#at Jt#e Ftate s#all %it#in t#e limits of its economic capacity and de*elopment/ make effecti*e pro*ision for securin$ t#e ri$#t to %ork/ to education and to public assistance in cases of unemployment/ old a$e/ sickness and disablement/ and in ot#er cases of undeser*ed %antK. 1rticle 3 states t#at t#e state s#all stri*e to promote t#e %elfare of t#e people 1rticle 43 states it s#all endea*our to secure a li*in$ %a$e and a decent standard of li*in$ to all %orkers. T#ese promises are part of t#e >irecti*e )rinciples of state policy of t#e Constitution of India.
Employment Exchange
T#e 'mployment ';c#an$e or$anisation/ operated by t#e @ederal Ministry of Labour/ runs more t#an "== indi*idual employment e;c#an$es in order to better matc# demand and supply %it# re$ard to %ork opportunities. ob seekers re$ister %it# t#ese employment e;c#an$es and are notified as soon as any *acancy in t#e $o*ernment sector matc#es t#eir profile. 1ccordin$ to t#e 'mployment ';c#an$es 6Compulsory otification of Hacancies7 1ct of ("5"/ in any Ftate or area t#ereof/ t#e employer in e*ery establis#ment in t#e public sector in t#at Ftate or area s#all ? before fillin$ any *acancy in any employment in t#at establis#ment ? notify t#at *acancy to suc# employment e;c#an$es as may be prescribed. 'mployment e;c#an$es play a si$nificant role in assistin$ youn$ people in findin$ employment. T#ey also assist t#em in startin$ self8employment *entures t#rou$# *ocational $uidance acti*ities. !e$isterin$ t#e applications of
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Vocational raining
India needs to train = million people in *ocational skills o*er t#e ne;t fi*e years. In addition/ t#ere is a need to retrain anot#er 3-= million %orkers. T#e $o*ernment0s tar$et is to train 5== million people by ,=,,/ also by encoura$in$ t#e participation of entrepreneurs and pri*ate or$anisations. T#e tar$et is #i$#. T#e %orkability of t#e structure t#at India #as de*eloped %ould depend on t#e capacity of t#e people %#o are responsible for reac#in$ t#e ob
1$ainst t#e back$round of a #u$e $ap bet%een skills demand and supply/ India #as taken t#e initiati*e to de*elop a system of *ocational trainin$. Under t#e system/ youn$ people are pro*ided %it# skills8related trainin$. T#e >irectorate +eneral of 'mployment and Trainin$ under t#e Ministry of Labour of t#e +DI formulates policies/ layin$ do%n norms and standards and conductin$ trade tests and certification of *ocational trainin$ under t#e ae$is of t#e trainin$ ad*isory body/ t#e ational Council of Hocational Trainin$. T#e main ob
J1 t#ree8tier institutional structure consistin$ ofB 6i7 t#e )rime Minister0s ational Council on Fkill >e*elopment/ 6ii7 t#e ational Fkill >e*elopment Coordination 9oard and 6iii7 t#e ational Fkill >e*elopment Corporation/ #as been set up to take for%ard t#e Fkill >e*elopment Mission 6+DI ,=(=B ,=57.T#is is an important initiati*e 6F. Man#endra >e* ,=((7.
Employment !eneration "rogrammes
In recent years/ 'mployment +eneration )ro$rammes 6'+)7 #a*e emer$ed as an important employment policy tool/ particularly in de*elopin$ countries suc# as India. T#is policy packa$e
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includes a %ide ran$e of acti*ities intended to increase labour demand 6for e;ample/ direct
T#e ma
Ma#atma +and#i ational !ural 'mployment +uarantee 1ct 6M+!'+17/ F%arna
T#e M*"'+ pro*ides for (== days of unskilled manual labour per year on public %orks pro
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Conclusion Ee li*e in an increasin$ly interdependent %orld. T#ere is $ro%in$ a%areness of t#is follo%in$ t#e $lobal financial crisis from ,== on. T#e e*er8increasin$ si:e of t#e yout# %orkforce/ bot# skilled and unskilled/ in an en*ironment of
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!eference B #ttpB%%%.a:adindia.or$social8issuesUnemployment8in8India.#tml #ttpBblo$s.s%a8
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