About Unemployment In India

Centre for Monitoring Indian Economy (CMIE) has mentioned that the urban unemployment rate stood at 8.9%, slightly higher than the rural unemployment rate of 8.3%. Key highlights: As per the data released, in October India’s unemployment rate rose to 8.5%, the highest since August 2016.

• Tamil Nadu saw the lowest unemployment rate of 1.1%. 
• Rajasthan saw its unemployment rate double between 2018 and 2019.
• Among States, Tripura and Haryana saw unemployment levels of over 20% (the highest).

• The figures estimated by the CMIE’s are line with the findings of the latest periodic Labour Force Survey that estimated an unemployment rate of 6.1?tween July 2017-June 2018, the worst in 45 years.
• The data released on the eve of other indicators showing a downtown in the economy (Likewise, a decline in growth of automobile sales and August's industrial output shrinking at its fastest rate in more than six years)
• A working paper titled, 'India’s Employment Crisis' estimated that between 2011-12 and 2017-18, employment declined by an unprecedented nine million (2% drop), with agricultural employment declining by 11.5%.
• In the same period, employment in the service sector increased by 13.4%, while manufacturing employment dipped by 5.7%.
• The data also shows that while employment has been declining, those who are "Not in Labour Force, Education and Training" has continued to increase -- from about 84 million in 2011-12, it has now crossed 100 million.
• The report also noted that falling manufacturing employment and decelerating construction employment growth is "bad news for the economy’.

The scenario of Unemployment in India:  The effective measures to check the unemployment rate is the number of unemployed people divided by the number of people in the labour force. In simple terms, unemployment is the situation under which a person who is actively searching for employment is unable to find work. “Unemployment rate = (Unemployed Workers / Total labour force) × 100” Types of Unemployment in India:

• Open Unemployment: It is a situation wherein a large section of the labour force does not get a job that may yield them a regular income. 
• Disguised Unemployment: It is a situation in which more people are doing work than actually required. Even if some are withdrawn, production does not suffer.
• Seasonal Unemployment: It is the type of unemployment that occurs during certain seasons of the year. In some industries and occupations like agriculture, holiday resorts, ice factories etc., production activities take place only in some seasons.
• Cyclical Unemployment: It is caused by trade cycles at regular intervals. Generally, capitalist economies are subject to trade cycles. 
• Educated Unemployment: Among the educated people, apart from open unemployment, many are underemployed because their qualification does not match the job. 
• Technological Unemployment: It is the result of certain changes in the techniques of production which may not warrant much labour. 
• Structural Unemployment: This type of unemployment arises due to drastic changes in the economic structure of a country. These changes may affect either the supply of a factor or demand for a factor of production. 
• Underemployment: It is a situation in which people employed contribute less than their capacity to produce. In this type of unemployment, people are not gainfully employed. 
• Casual Unemployment: When a person is employed on a day-to-day basis, casual unemployment may occur due to short-term contracts, shortage of raw materials, fall in demand, change of ownership etc.
• Chronic Unemployment: If unemployment continues to be a long term feature of a country, it is called chronic unemployment. 
• Frictional Unemployment: Frictional unemployment is caused due to improper adjustment between the supply of labour and demand for labour. 

Causes of Unemployment in India: The important causes of Unemployment in India are as follows:

• Large Population: Rapid growth of population and the increase in labour force into the economy is the major reasons for the high unemployment rate in India.
• Low levels of Education: Low levels of education and lack of vocational skills are the constraints to get employed in the economy as some jobs require minimum educational qualification.
• Huge influx in the informal sector: Huge workforce associated with the informal sector due to lack of required education/ skills, which is not captured in any employment data. 
• Underdevelopment of the economy: Underdevelopment of the Indian economy is another constraint that is not well suited with the financial needs of the economy.
• Slow Growth: Inadequate growth of infrastructure and low investments in the manufacturing sector, hence restricting the employment potential of the secondary sector.
• Low Agri-Productivity: Low productivity in agriculture sector combined with a lack of alternative opportunities for agricultural worker which makes the transition from primary to secondary and tertiary sectors difficult.

Apart from this, there are other causes like-

• Absence of manpower planning.
• Degeneration of village industries.
• Inappropriate technology.
• The slow growth of the industrial sector.
• Immobility of labour.
• Jobless growth.

Reasons For Jobless Growth In India: 

• Unskilled Labour Force: Skills are essential to perform most of the jobs being created in India, starting from manufacturing to working in the services sector. But lack of skills makes people unemployable. 
• Insufficient Investment: Investment is needed in both the areas of creating jobs as well as creating employable people. India lacks investment in both the areas, which compounds the problem leading to jobless growth. 
• Rigidity in Labour Laws: Multiplicity of labour laws and their rigidity makes their compliance extremely difficult. They also act as an impediment to industrial development and employment creation. 
• Education System in India: As per an ILO report, around half of Indian graduates are unemployable. This is a cause which furthers unemployment in India.
• Automation: Most jobs created in the manufacturing sector are automated, and any employment they need is highly skilled, which most people in India lack. 
• Unorganized Sector: Along with the lack of jobs creation, there is also a lack of good jobs being created. Majority of the Indian workforce is involved in the unorganized sector.
• Entrepreneurship: Entrepreneurs face several challenges, which act as an impediment to their growth, leading to a reduction of jobs.

Government Measures: Labour Welfare Schemes Major Schemes:

• Integrated Rural Development Programme (IRDP): 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):  It was launched with the intention to help unemployed rural youth between the age of 18 and 35 years to acquire skills for self-employment.
• MNREGA: This employment scheme 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.
• Make in India Initiative: The programme was launched in order to transform India into a global manufacturing hub. Along with boosting manufacturing in India the scheme enhances employment opportunities in the country by manifolds.
• Start-Up India scheme: The scheme initiated with the objective to build a strong eco-system for nurturing innovation and startups in the country which will drive economic growth and generate large scale employment opportunities. 
• Stand Up India: Stand Up India is an initiative of the government of India launched in 2016 to support entrepreneurship among women and SC and ST communities. 
• Pradhan Mantri Kaushal Vikas Yojana: The objective of this Skill Certification Scheme is to enable a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood. 

Social Security Scheme:

• Rashtriya Swasthya Bima Yojana: It was launched in 2008 to meet the out-of-pocket health expenses of unorganized sector workers.
• Atal Pension Yojana: It provides a guaranteed minimum pension beginning from Rs. 1,000 per month to the age group 18-40 on attaining the age of 60.
• Pradhan Mantri Suraksha Bima Yojana: It provides accident and disability cover up to Rs. 2 lakh at an annual premium of Rs.12 
• Pradhan Mantri Jeevan Jyoti Bima Yojana: It provides a life insurance cover of Rs.2 lakh at an annual premium of Rs.330

Employment Generation Schemes:

• National Career Service (NCS): The NCS provides a variety of employment-related services. National Career Service Project brings employers, trainers and unemployed on a single platform. 
• Quarterly Employment Surveys: Labour Bureau initiated QES (New series) by extending scope and coverage with the objective to measure the relative change in employment situation over successive quarters in the sizeable segment of Non-farm Industrial economy.
• Survey on Pradhan Mantri Mudra Yojna: Labour Bureau has been entrusted by the Ministry of Labour & Employment to conduct the survey to estimate the employment generated under the Pradhan Mantri Mudra Yojna (PMMY).
• Shram Suvidha Portal: The Ministry of Labour & Employment has developed a unified Web Portal ‘Shram Suvidha Portal’, to bring transparency and accountability in the enforcement of labour laws and ease the complexity of compliance

Others Scheme:

• National Apprenticeship Promotion Scheme: The scheme provides reimbursement of 25 per cent of prescribed stipend subject to a maximum of Rs. 1500/per month per apprentice.
• Pradhan Mantri Kaushal Vikas Yojana: This skill development programmes launched for the new entrants so that they get better-paying jobs 
• Ease of Doing Business Initiative: Under-Ease of Doing Business initiative the process of registration, compliance to labour laws, inspection etc has been simplified to encourage more number of enterprises to be set up and provide quality jobs. 

Way Forward: We have moved from agriculture-led growth to service-led growth even much before the technological revolution started impacting livelihoods. The services sector has adopted digital technology impacting a large pool of young labour force looking forward to job opportunities in the service sector. 

• Sectoral bifurcation of jobs may fade out in the years to come with the integration of digital technology in all job roles across sectors and the prospectus would be for IT integrated job roles. 
• Areas of Big Data Analytics, Artificial Intelligence, Robotic Process Automation, Internet of Things, Cloud Computing and Virtual Reality, BlockChain and Electric Vehicles will create highly skilled and high paid jobs in the future. 
• However, for the large segment of poorly educated and low skilled labour force, opportunities lie in apparel; textile and leather; tourism and hospitality sector; construction as also in the tech-based entrepreneurship which has seen rapid growth both in rural and the urban areas.
• Government initiatives like Start-up India; Mudra; Stand up India is creating significant employment opportunities for a low skilled workforce. 
• Further, the sectors where the government is investing hugely and policy interventions are promoting investments viz agriculture; infrastructure; automotive; textiles and leather are throwing open new employment opportunities for the new entrant to the labour market.

Apart from this, the following could be the best possible solution to create more jobs in the economy-

• Shift towards labour-intensive sectors: Focus should towards labour-intensive sectors to create more jobs.
• Inclusive & decent jobs: Growth in jobs must be inclusive and new jobs need to be decent and secure with better work conditions including social security benefits and the right to organize.
• Investment to increase productivity: Substantially higher investments in health and education to improve productivity as these two sectors could be large employment generators in the future.
• Efforts to curb corruption: Governments need to prioritize curbing corruption and regulate other drivers of inequality and joblessness.
• Progressive taxation: There must be a greater focus on progressive taxation to reduce a race to the bottom on corporate tax exemptions.