|Demand of the question |
Introduction. Contextual Introduction.
Body. Cause of unemployment in India.
Conclusion. Potential solutions and Way forward.
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. In other words unemployment is a situation in which a person who is willing to work at the existing wage rate does not get a job. Unemployment is a reason for alarming concern in India today. The root of the problem can be traced to a host of reasons that contributes collectively towards this problem.
Causes of Unemployment in India:
- Jobless Economic Growth: India’s GDP grown at about 7-8% in last decade, but growth does not translated into creating more employment opportunities for the labour force of the country.
- Decline of Small Scale and Cottage Industries: Industrial policy of British government curtailed the growth of small scale and cottage industries. Independent India’s preference to large scale industry and new industrial policy of 1990’s resulted in decline of small scale industries.
- Joint Family System: It encourages disguised unemployment. In big families having large business establishments, many such persons are found who do not do any work and depend on the joint income of the family. Joint family system is more prevalent in rural areas; hence a high degree of disguised unemployment there.
- Mobility of Labour: Labour mobility is very low in India. Because of their family loyalty, people generally avoid migrating to far-off areas of work. Factors like diversity of language, religion and customs also contribute to low mobility. Lower mobility causes greater unemployment.
- Education: Although literacy rates have risen in the last few decades, there still remains a fundamental flaw in the education system in India. The curriculum is mostly theory-oriented and fails to provide vocational training required to match up with current economic environment. The degree-oriented system fail when it comes to produce human resources skilled enough to specific job profiles in the economy.
- Population growth: Rapid growth of population is the major reason for increasing unemployment in the country. In the last decade (2006-2016), India’s population increased by 136 million and unemployment is at a 5 year high in the financial year of 2015-2016.
- Faulty planning: The five-year plans implemented by the government have not contributed proportionately towards generation of employment. The assumption was that growth in economy will automatically generate enough employment. But in reality there are gaps between the required number of jobs and the actual numbers generated.
- Agriculture: Agriculture remains the biggest employer in the country contributing to 51% employment. But the sector contributes a meagre 12-13% to the country’s GDP. The problem of disguised unemployment is the biggest contributor behind this deficit. Also the seasonal nature of employment in the sector lead to recurring cycles of unemployment for the rural population.
- Lack of skills: There has been a push towards providing the employment opportunities to the people by government by skilling them. But skill deficit still is a big issue.
- Poor Industrialisation: The industrial sector in India still lag behind. Agriculture still remains as the biggest employer in the country.
- Rush for government jobs: Many educated youth run behind government jobs due to job profile and security. This lead to many remain unemployed due to students preparing for government jobs.
- Lack of Investment: Inadequacy of capital investment has been a key contributor in not generating enough industry that in turn provides employment to the labour force.
Solutions to Reduce Unemployment Rate:
- One of the remedies of the unemployment situation in India is rapid industrialisation. Increased number of industries will translate into increased number of employment opportunities.
- The curriculum should be changed with increased focus on learning and skill development.
- More institutions need to be established that offer vocational courses that will translate directly into relevant jobs.
- Self-employment should be encouraged more with introduction of liability free loans and government assistance for funding.
- Incubation centres need to be promoted to cultivate original business ideas that will be financially viable.
- Better irrigation facilities, better farming equipment, dissemination of knowledge regarding multiple crop rotation and crop management should be focused on.
- Government as well as leading business houses of the country should seek to invite more foreign collaboration and capital investment in every sector.
- There are 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.
- Public investment in sectors like health, education, police and judiciary can create many government jobs.
The low level of economic growth in primary sector curtailed the job opportunities at rural level. Thus it resulted in jobless growth. Further, rapid population growth adds more labour force to the market. More population means more consumption and less saving, less saving implies less capital formation and less production which finally leads to less employment. Thus a collaborative effort is needed by government and industry to nudge an inclusive growth by supporting new sectors.