ANSWER

• INTRODUCTION : A brief introduction to Unemployment rates
• BODY :
  • Speak about causes of Unemployment
  • Suggest a way forward
• CONCLUSION : A short conclusion

Unemployment is a situation in which the person is capable of working both physically and mentally at the existing wage rate, but does not get a job to work. Periodic Labour Force Survey (PLFS) data show an increase in the worker to population ratio (WPR) from 34.7% in 2017-18 to 38.2% in 2019-20. This is a reversal of the previous trend which showed a decline in WPR after 2004-05. The change also implies that employment has increased at a much faster rate than growth in population.

Causes of Unemployment

• Despite India’s GDP growth is at about 7-8%, it did not translate into the creation of more employment opportunities for the labour force.
• Preference for large scale industry after independence and the new industrial policy of the 1990s resulted in the decline of small scale industries.
• The joint family system is more prevalent in rural areas and encourages disguised unemployment.
• Various factors such as family loyalty, which people avoid migrating to far-off areas of work. Lower mobility causes greater unemployment.
• The education curriculum is mostly theory-oriented which leads to a mismatch between vocational training and the current economic environment.
• An increase in population is the major reason for increasing unemployment in the country. In the last decade (2006-2016).
• Despite agriculture being the biggest employer in the country contributing to 51% of employment, it contributes only 12-13% to the country’s GDP.
• Skill deficit between the employment opportunities available and the skills.
• The industrial sector in India has not achieved the desired level of growth. Agriculture still remains the biggest employer in the country.
• Decreasing capital investment and therefore a subsequent decrease in industrial growth that in turn provides employment to the labour force.

Way Forward

• The rising share of industry and services in national income without a sizable increase in employment puts a serious question mark on the relevance of conventional models of economic growth and development.
• There is also an urgent need to generate much more employment in the manufacturing and services sector compared to the number of jobs they have offered in the recent past. This should include:
  • Changes in labour laws which discourage industry to adopt labour-intensive production
  • Employment-linked production incentives
  • Special assistance for labour-intensive economic activities
• Decentralisation of Industrial activities is necessary so that people of every region get employment.
• Development of the rural areas will help mitigate the migration of the rural people to the urban areas thus decreasing the pressure on the urban area jobs.
• The private sector investment rate in India is declining — almost in a linear manner — since 2011. The employment scene will improve only if private investment picks up.
• The government should also align technical and vocational education and make enduring and long-term investments in human capital through good-quality education, skills, and on-the-job training, as well as in basic social protection.
• There are a number of labour intensive manufacturing sectors in India such as food processing, leather and footwear, wood manufacturers and furniture, textiles and apparel and garments.Special packages, individually designed for each industry are needed to create jobs.