NAME – ANISH

KUMAR
CLASS – XII-B1
ROLL NO. – 06
Unemployment in
India
ACKNOWLEDGEMENT
I would like to express my
heartful gratitude to my subject
teacher Kanchan Ma’am for
their guidance, my honorable
principal ma’am for providing
me with all the facilities that
was required.
Anish Kumar
XII-B1

CERTIFICATE
This is to certify that Anish
Kumar of class XII-B1 has
successfully completed his
Economic investigatory project
on “Unemployment in India”
under the guidance of Kanchan
Ma’am for the academic
session 2021-2022.

Teacher Sign
What is Unemployment?
Unemployment is a situation when a person
actively searches for a job and is unable to find
work. Unemployment indicates the health of
the economy. 
The unemployment rate is the most frequent
measure of unemployment. The unemployment
rate is the number of people unemployed
divided by the working population or people
working under labor force.

Unemployment rate = (Unemployed Workers / Total

labor force) × 100

National Sample Survey Organization (NSSO)

defines employment and unemployment on the
following activity statuses of an individual. NSSO, an
organization under MOSPI – Ministry of Statistics
and Programme Implementation measures India’s
unemployment on three approaches:

 Daily Status Approach: unemployment status of

a person under this approach is measured for
 each day in a reference week. A person having no
gainful work even for one hour in a day is
described as unemployed for that day.
 Weekly Status Approach: This approach
highlights the record of those persons who did not
have gainful work or were unemployed even for an
hour on any day of the week preceding the date of
the survey.
 Usual Status Approach: This gives the estimates
of those persons who were unemployed or had no
gainful work for a major time during the 365 days.

Types of Unemployment in India

In India, there are seven types of unemployment.
The types of unemployment are discussed below:

 Disguised Unemployment: This is a type of

unemployment where people employed are more
than actually needed. Disguised unemployment is
generally traced in unorganized sectors or the
agricultural sectors.
 Structural Unemployment: This unemployment
arises when there is a mismatch between the
worker’s skills and availability of jobs in the market.
Many people in India do not get job matching to
their skills or due to lack of required skills they do
not get jobs and because of poor education level,
it becomes important to provide them related
training. 
 Seasonal Unemployment: That situation of
unemployment when people do not have work
during certain seasons of the year such as
laborers in India rarely have occupation throughout
the year.
 Vulnerable Unemployment: People are deemed
unemployed under this unemployment. People are
employed but informally i.e. without proper job
contracts and thus records of their work are never
 maintained. It is one of the main types of
unemployment in India.
 Technological Unemployment: the situation
when people lose their jobs due to advancement in
technologies. In 2016, the data of the World Bank
predicted that the proportion of jobs threatened by
automation in India is 69% year-on-year.

 Cyclical Unemployment: unemployment caused

due to the business cycle, where the number of
unemployed heads rises during recessions and
declines with the growth of the economy. Cyclical
unemployment figures in India are negligible. 
 Frictional Unemployment: this is a situation
when people are unemployed for a short span of
time while searching for a new job or switching
between jobs. Frictional Unemployment also called
Search Unemployment is the time lag between the
jobs. Frictional unemployment is considered as
voluntary unemployment because the reason for
unemployment is not a shortage of jobs, but in
fact, the workers themselves quit their jobs in
search of better opportunities.
Causes of Unemployment
According to Alakh Sharma, the causes of high
unemployment and under-employment in India
are subject of intense debate among scholars. A
group of scholars state that it is a consequence
of "restrictive labor laws that create inflexibility
in the labor market", while organized labor
unions and another group of scholars contest
this proposed rationale. India has about 250
labor regulations at central and state levels,
and global manufacturing companies find the
Indian labor laws to be excessively complex and
restrictive compared to China and other
economies that encourage manufacturing jobs,
according to the economist Pravakar
Sahoo. According to Sharma, the Indian labor
laws are "so numerous, complex and even
ambiguous" that they prevent a pro-
employment economic environment and
smooth industrial relations. India needs "labor
market reforms that address the needs of both
employers and workers", and it should rewrite
its labor laws that protects its workers,
provides social security for workers between
jobs, and makes compliance easier for the
industry. According to The Economist the
Indian labor laws are inflexible and restrictive,
and this in combination with its poor
infrastructure is a cause of its unemployment
situation.
Unemployment is a major social issue in India.
As of September 2018, according to the Indian
government, India had 31 million jobless
people. The numbers are widely disputed. The
uses of digital manufacturing and machinery in
factories and garments are leading to
unemployment in India; Unemployment is
biggest issue in India. There is unemployment
rates declined to 6.5% in January 2021.

The major causes of unemployment in India are

as mentioned below:

 Large population.

 Lack of vocational skills or low educational

levels of the working population.

 Labor-intensive sectors suffering from the

slowdown in private investment particularly
after demonetization

 The low productivity in the agriculture

sector plus the lack of alternative
 opportunities for agricultural workers that
makes transition among the three sectors
difficult.
 Legal complexities, inadequate state
support, low infrastructural, financial and
market linkages to small businesses
making such enterprises unviable with cost
and compliance overruns.

 Inadequate growth of infrastructure and low

investments in the manufacturing sector,
hence restricting the employment potential
of the secondary sector.

 The huge workforce of the country is

associated with the informal sector because
of a lack of required education or skills, and
this data is not captured in employment
statistics.
 The main cause of structural
unemployment is the education provided in
schools and colleges are not as per the
current requirements of the industries. 

 Regressive social norms that deter women

from taking/continuing employment.
 Impact of Globalization on the
Employment rate

The LPG Policy of 1991 led to increasing

competition between the foreign and local
brands. This led to the transformation of
organized sectors into unorganized. This led to
a cut in eagles and a high level of
unemployment for the workers
. 
Steps Taken by Government to Boost Employment
Rate

The government came up with several schemes

to boost the employment rate in the country.
Some of them are – 

1. Integrated Rural Development Programmed,

an initiative to create employment
opportunities in rural areas. This became
official in 1980 intending to provide full
employment. 
2. Training of Rural Youth for Self-Employment
was another focusing on youth. The aim was to
help unemployed rural youth from age of 18 till
35 years to adopt skills for self-employment
opportunities. Though the emphasis was on
SC/ST Youth and Women of the rural areas.
3. RSETI/RUDEST was an initiative by Sri
Dharmasthala Manjunatheshwara Educational
Trust, Syndicate Bank, and Canara Bank. The
idea was to mitigate the unemployment
problem among the youth. This became official
in 1982 with the setting up of the Rural
Development and Self Employment Training
Institute. The acronym for it is RUDSETI and is
looked after by banks with coordination with
the Government of India and the State.

4. National Rural Employment program and

Rural Landless Employment Guarantee
Programmed merged to form the Jawaharlal
Rozgar Yojana. The JRY became official in 1989
with a cost ratio of 80:20 between the center
and the States.

5. Mahatma Gandhi National Rural

Employment Guarantee Act is a 2005 scheme
for creating employment. The schemes make
sure to provide 100 days of paid employment to
individuals from families willing to do unskilled
labor-intensive work. The Right to work act
comes under this scheme. 
6. Pradhan Mantri Kaushal Vikas Yojana is a
2015 scheme to enable Indian youth to move
towards industry-relevant skill training. This is
to help them in securing a better livelihood for
the future.

7. Start-Up India Scheme is another 2016

launched scheme for developing
entrepreneurship opportunities. It aims to
create an environment to promote and support
entrepreneurship opportunities across the
country.
8. The Stand-Up India Scheme is a banking
scheme that provides loans between Rs 10 lakh
to 1 crore to SC/ST and women borrowers. The
target of each bank is to assign loans to each of
the categories setting up a greenfield
enterprise.

9. National Skill Development Mission is a 2014

campaign that promotes the idea of ‘Skill India’.
The main agenda is to improve existing skill
training initiatives and combine them. 

10. In 1979 the government launched

TRYSEM – Training of Rural Youth for Self-
Employment The objective of this scheme
was to help unemployed youth of rural
areas aged between 18 and 35 years to
acquire skills for self-employment. The
priority under this scheme was given to
women and youth belonging to SC/ST
category.

11. The Government launched the IRDP –

Integrated Rural Development
Programmed (IRDP) in the year 1980 to
create full employment opportunities in
rural areas.

12. A new initiative was tried namely

RSETI/RUDSETI in 1982 jointly by Sri
Dharmasthala Manjunatheshwara
Educational Trust, Canara Bank and
Syndicate Bank. The aim of RUDSETI,
the acronym of Rural Development And
Self Employment Training Institute was
to mitigate the unemployment problem
among the youth.
Rural Self-employment Training
Institutes/ RSETIs are now managed by
Banks with active cooperation from the
state and central Government
 .

Conclusion

One theory of reducing unemployment is

to break this cycle. There are a number of
ways to try to break it. One way is to
encourage the people of the country to
spend more money, in order to keep
demand for goods up, and therefore keep
companies and producers in action.
Another way is to provide government
funding to companies which are in danger
of "going under" or becoming "bankrupt". If
government funding is provided for such
businesses, they are less likely to fire their
staff. However, if companies accept
government funding, they are also
accepting a higher amount of government
involvement in the company, in areas such
as company spending and employment
figures, so many businesses are reluctant
to accept government spending as it often
comes with difficult terms and conditions.

Unfortunately, there is no one conclusion

to unemployment. Chances are that
countries will always have a rate of
unemployment - even in prosperous times
such as after the Second World War, there
was still a rate of unemployment, although
it was very low. Some economic theories
such as Keynesianism suggest that the
government of a country should hold
employment as its top priority. Other
theories such as Monetarism suggest that,
by focusing government attention on strict
controls on the amount of money
circulating within a country's economy,
unemployment will also come down.

Bibliography