Problem of Unemployment in India

Economists refer unemployment to that situation where a person is ready to work at the prevailing wage rate but employment is not readily available.

In developed economies, the nature of unemployment problem is quite different as compared to that of under-developed economies. In developed economies, problem of achieving full employment is relatively simple though not always easy because, as the capital structure increases, both the labour force and the capital are gainfully employed. This results in the production of a larger output and its profitable sale in the market. But so far as the under-developed or less-developed economies are concerned, this process is not so simple because here the problem is more complicated due to availability of less capital as compared to the available labour force.

The developed economies have already built a large capital structure te. not only machinery and equipment in factories and farms but also the social and economic infrastructure. Thus, the developed economies take much less time in tackling the problem of unemployment. But in under-developed economies the capital structure is far too small; it cannot absorb the huge labour force, that is why the problem of unemployment is secular in these economies.

In an under-developed country like India, the problem of unemployment and under-development is both very acute and serious. Unemployment is widespread in the country and the quantum of unemployment has been increasing with every five year plan. Unemployment is a curse because it is an indication of poverty for a man, downfall for a society and loss of human resources for a nation.

Types of Unemployment

Unemployment is of various types but only five types have been discussed below:

(a) Structural Unemployment. This type of unemployment is related to the structural set up of the economy and arises when (a) there is a shortage of other inputs like capital, land etc., (b) labor force is trained in the traditional industries but these do not possess any skill. Thus, the types of labourer which are needed are not available, (c) the social and economic structure of the country is backward and traditional. Thus, the availability of employment is lesser as compared to the labour supply. India’s unemployment is structural in nature. It is associated with inadequacy of productive capacity to create enough jobs for all those able and willing to work.

This sort of unemployment is not a temporary phenomenon in the sense that it will pass off on its own after a lapse of time. It is chronic. It requires for its solution the application of long-term measures for remedying the defects in the economic structure. In other words, it is the development of the economy alone that can take care of unemployment.

(b) Disguised Unemployment. Disguised unemployment is one of the features of under-developed countries. It implies that more than required number of people are engaged in a given job. For instance, a field measuring one hectare needs the services of two persons for its cultivation, if however five persons are engaged on this farm, then it means that three persons are disguised unemployed. According to Nurkse, in predominantly agricultural under-developed countries, some 20 to 25 per cent of the working force falls in the category of disguised unemployed.

(c) Seasonal Unemployment. There are some industries and occupations such as agriculture, the catering trade in holiday resorts, some agro-based industrial ac,activities, like sugar mills and rice mills etc. in which production activities are seasonal in nature. So, they offer employment for only a certain period of time in a year. For instance, work in sugar mills lasts for about six months. Rice mills work only for a few weeks. Agriculture offers employment at the time of ploughing and at the time of harvesting. In agriculture when one crop is grown, due to any reason, then the farmer is employed and is unemployed after the crop period is over.
In short, during the off-season, there is unemployment of people engaged in such types of work of activities which cater to the seasonal demand. We may call it “seasonal unemployment”. Even self- employed people may be seasonally unemployed, off the season.  This poses a serious problem of wastage of productive resources for an under-developed country which is already deficient in capital resources.

(d) Industrial Unemployment. This type of unemployment is found in urban sector. it is found among those illiterate persons who are unable to get job in industries, business or constructions.,Technical unemployment in industrial sector has been increasing in India too, like western countries, with the use of labour—saving devices and modernisation of industries since the establishment of large scale industries in India. Industrial unemployment has also increased due to migration. of people from rural areas to urban areas. Thus, in the industrial sector the supply of labour has increased but not the employment.

(e) Educated Unemployment. This type of unemployment is found among the educated persons Educated unemployment can be both open unemployment and under-employment. In 1999, about 15.8 lakh people in engineering, medical, agriculture, arts, science and commerce and post-graduates were unemployed in India and the number of matric passed unemployed was 96 laths. In the 9th plan about 1.63 crore educated labour force is expected to increase and provisions have to be made to provide employment to educated persons. In 1961, there were 6 lakh registered educated unemployed and this number increased to 218 lath at the beginning of the Ninth Plan.

Causes of Unemployment in India

The main causes of unemployment in India are as follows: (i) Slow economic growth, (ii) Rapid growth of population, (iii) Agriculture being a seasonal industry, (iv) Joint family system increasing disguised unemployment, (v) Increase in educated unemployment due to more expansion of industries &, (vi) Decline of cottage and small scale industries, (vii) Slow progress of large scale industries, (viii) Less saving and investment due to low capital formation, (ix) Caste system being a hindrance in the availability of job, (x) Immobility of labour, (xi) Migratory character of labour etc.

Measures to Solve Unemployment Problem in India

Following measures can be suggested to solve the problem of unemployment in India: (a) The investment structure in India must undergo a change. (b) Educational system in the country should be completely overhauled. (c) Cottage and small scale industries may be developed. (d) The means of transport may be developed. (e) Rapid rise in population must be checked. (f) Agriculture must be properly developed. (g) More Employment Exchanges may be opened. (h) Self employment may be encouraged. (i) Private sector may be given more subsidies and incentives.