Unemployment in India

(Unemployment in India. Questions and Answers from Principles of Economics suitable for ISC class XI)

Q1. Give a brief account of the nature of unemployment in India. How does it differ from unemployment in developed countries?
Unemployment is when a person who need work is not gainfully employed in any productive activity.

Normally unemployment, in India, is of the following reasons:
a)Voluntary and involuntary unemployment : Voluntary unemployment is when people do not want to take up available employment at the prevailing wage rate. Involuntary unemployment is when people do not get jobs even when they are willing to take up jobs at the prevailing wage rate.

b)Frictional unemployment: This occurs when there is unemployment on account of of the closing of firms or due to the preference of the people for only some types of jobs.

c)Structural Unemployment:This occurs when the population of the country grows faster than the rate of employment in the country.

d)Cyclical employment : This occurs when there is unemployment on account of industrial recession due to low demand for goods and services.

Unemployment, in India, differs from unemployment in developed countries for the following reasons:
- Indeterminate:In India the extent of unemployment cannot be easily determined. This is because there is a lot of disguised unemployment.Disguised unemployment is when people appear to be employed but contribute nothing to overall output of goods and services.
- Seasonal: The component of seasonal unemployment is high in India. This is because in India a large part of the agricultural land is not irrigated.Thus there are jobs in farm sector only when there is good monsoon. When the monsoon is weak the no of jobs available in the farm sector also reduces.
- Population:Unemployment in India is high due to population pressure.The population increases faster than the rate of job creation.
-Inadequate Irrigation : Inadequate irrigation leads to seasonal unemployment in the agricultural sector.
-Faulty Education System: Lack of vocational educational system leads to unemployment in India.

Q2. How is rural unemployment different from urban unemployment in India?
Unemployment in India is of two kinds. Rural unemployment and Urban unemployment:

Rural Unemployment : This is unemployment in the rural areas mainly connected with the farm sector.Rural unemployment is different from urban unemployment for the following reasons:
a) Seasonal:Rural unemployment is seasonal in nature. This is because the farm sector in India is not well irrigated. It has to depend on the monsoon for irrigation. As a result there is a big demand for people during the sowing and harvesting season. After the end of these seasons, there is no employment. Due to the lack of man-made irrigation, multiple cropping is not possible.Only about 40% of the farm land is irrigated. If irrigation is increased, seasonal unemployment will reduce.
b) Disguised:There is disguised unemployment in rural areas.Since all members of a family work in the farm, it appears that all members are gainfully employed.However, even if the service of a few members of the family is removed, the output of the farm will not drop. This indicates that all members of the family are not fully utilized and therefore there is disguised employment - that is appearing to be employed not not actually employed.
c) Chronic:Chronic unemployment is prevalent in rural area.This means that a person is unemployed for more days in a year than he is employed. A person is said to be chronically unemployed if he works for say only 100 out of 356 days.

Urban employment, on the other hand arises out of the migration of population from rural areas and the slow growth of jobs in the industrial sector.The other feature of urban unemployment is the presence of a large number of educated unemployed due to th lack of job oriented educational courses.

Q3.Describe the magnitude and pattern of unemployment in India?
It is estimated that the number of unemployed in India in 1956-57 was about 5.3 million. This increased to about 34 million in 2002. According to Prof.K.B.Sahay the actual number of unemployed people in India may even be about 132 million.

The pattern of unemployment in India has two distinct tracks. These are:
- Urban unemployment
- Rural unemployment.

Rural unemployment is on account of the lack of opportunities in the farm sector. Since only about 40% of all cultivable areas are irrigated, farmers are not able to sow multiple crops.They can harvest only one two crops a year. This leads to seasonal unemployment,disguised employment and even chronic unemployment.

In the urban areas,the industrial and service sectors provide jobs. There is unemployment in the urban areas for the following reasons:
- there is migration of people from the rural to urban areas.The rate of increase in jobs is not adequate to provide jobs to all.
- there is a mis-match between education and the requirement of jobs.There is a lack of vocational training which hampers employment.
- the service industry requires better qualified people.Thus even if there are jobs in the service sector, there is a lack of qualified people to take-up these jobs.

Q4."The unemployment problem can be solved by making an all-out frontal attack".Discuss.
An all-out frontal attack on poverty can reduce the extent of unemployment in India considerably. To make an all-out frontal attack on unemployment short-term and long term measures have to be undertaken.These are :

Short term measures:
Special employment generation programmes:These employment programmes increase the income in the hands of the landless agricultural labourers,marginal farmers,village artisans etc. Government programmes like the Employment Assurance Scheme(EAS), the Jawahar Rozgar Yogna create employment opportunities and reduces unemployment.

Long Term Measures:
1.High Rate of economic growth:
If the rate of economic growth is high then there will be low levels of unemployment. High economic growth leads to larger production and therefore higher employment.In order to maximize employment there has to be high growth in sectors which has high employment potential like construction.

2. Increasing investment: If there is investment in road-building, construction, transportation then employment increases.

3.Investment in the agricultural sector: Increase in irrigation facilities will lead to multiple cropping and higher employment. Focus on high value and labour intensive crops (like fruits and vegetables) are labour intensive.

4.Animal Husbandry and Fishing : Investment in these labour intensive areas will reduce unemployment.

6.Rural Industrialization : These include cotton ginning, processing of milk products, jute goods manufacturing etc.Encouraging small scale industries in rural areas based on local resources will also bring down unemployment.

7.Rural Development: Other activities like Rural Development Schemes ( like irrigation projects, drainage works), the use of labour intensive techniques and investment in Social Services (like education, health etc) will reduce the amount of unemployment in the country)

8.Reforms : Reforms in the eduction system with emphasis on skill development will reduce unemployment. This along with population control will control unemployment.