UNEMPLOYMENT – SOCIAL ISSUE
News:
Bharat Jodo Yatra | Unemployment, inflation hurting the country, says Rahul
Gandhi
What's in the news?
● Former
Congress president Rahul Gandhi on December 21, 2022, said that Bharat Jodo
Yatra was indeed aimed against the hatred, but the twin issues of
“unemployment” and “inflation” were also hurting the country.
Key takeaways:
● Unemployment
rate or joblessness is defined as
the percentage of unemployed persons among the labor force.
● The
latest data is based on a periodic labor force survey, underlining a decline in
the unemployment rate amid an improved labor force participation ratio.
● The
unemployment rate for persons aged 15 years and above in April-June 2022 was 7.6 percent in urban areas, the 16th
Periodic Labour Force Survey (PLFS) showed.
● Female urban
unemployment:
○ It
showed that the unemployment rate among females (aged 15 years and above) in
urban areas declined to 9.4 percent
in July-September, 2022 from 11.6 per cent a year ago.
○ It
was 9.5 percent in April-June, 2022.
● Male urban unemployment:
○ Among
males, the unemployment rate in urban areas declined to 6.6 percent in July-September 2022 as against 9.3 percent a year
ago.
○ It
was 7.1 percent in April-June 2022.
● Labor force participation
rate:
○ Labor
force participation rate in CWS (Current Weekly Status) in urban areas for
persons aged 15 years and above increased to 47.9 percent in the July-September quarter of 2022, from 46.9
percent in the same period a year ago. It was 47.5 percent in April-June 2022.
● Women participation rate:
○ WPR
(in percent) in CWS in urban areas for persons aged 15 years and above stood at
44.5 percent in July-September,
2022, up from 42.3 percent in the same period a year ago. It was 43.9 percent
in April-June, 2022.
Unemployment in India:
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.
Types of unemployment:
1. Disguised Unemployment:
● It
is a phenomenon wherein more people are employed than actually needed.
● It
is primarily traced in the agricultural
and unorganized sectors of India.
2. Seasonal Unemployment:
● It
is unemployment that occurs during certain seasons of the year.
● Agricultural laborers
in India rarely have worked throughout the year.
3. 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 jobs matching their skills or due to lack of
required skills they do not get jobs and because of poor education level.
4. Cyclical Unemployment:
● Unemployment
is 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.
5. Frictional Unemployment:
● Frictional
Unemployment also called Search
Unemployment, refers to the time lag between the jobs when an individual is
searching for a new job or is switching between the jobs.
● In
other words, an employee requires time for searching for a new job or shifting
from the existing to a new job, this inevitable time delay causes frictional
unemployment.
6. Technological Unemployment:
● It
is the loss of jobs due to changes in
technology.
● In
2016, World Bank data predicted that the proportion of jobs threatened by
automation in India is 69% year-on-year.
Causes of unemployment:
1. Jobless Economic Growth:
● India’s
GDP grew at about 7-8% in the last decade, but growth does not translate into
creating more employment opportunities for the labor force of the country.
2. Decline of Small Scale and Cottage Industries:
● Industrial
policy of the British government curtailed the growth of small scale and
cottage industries.
● Independent
India’s preference to large scale industry and new industrial policy of the
1990's resulted in decline of small scale industries.
3. 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.
4. Agriculture:
● Despite
agriculture being the biggest employer in the country contributing to 51% of
employment, it contributes only 12-13% to the country’s GDP.
5. Skill requirement:
● 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.
6. 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.
7. 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.
8. Rush for government jobs:
● Many
educated youth run behind government jobs due to job profile and security.
● This
led to many remaining unemployed due to students preparing for government jobs.
9. Lack of Investment:
● Inadequacy
of capital investment has been a key contributor in not generating enough
industry that in turn provides employment to the labor force.
Government initiatives:
1. Atma Nirbhar Bharat Rojgar Yojana (ABRY):
● It
was launched with effect from 1st October, 2020 as part of Atma Nirbhar Bharat
package 3.0 to incentivize employers for creation
of new employment along with social security benefits and restoration of loss
of employment during Covid-19 pandemic.
2. Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA):
● MGNREGA
is to provide at least 100 days of
guaranteed wage employment in a financial year to every rural household
whose adult members volunteer to do unskilled manual work.
3. Aajeevika - National Rural Livelihoods Mission
(NRLM):
● It
was launched by the Ministry of Rural Development (MoRD), Government of India
in June 2011.
● Aided
in part through investment support by the World Bank, the Mission aims at creating efficient and effective
institutional platforms for the rural poor, enabling them to increase
household income through sustainable livelihood enhancements and improved
access to financial services.
4. PM - SVANidhi Scheme:
● Prime
Minister Street Vendor's AtmaNirbhar Nidhi (PM SVAN idhi) Scheme since June 01,
2020 to provide collateral free working
capital loan to street vendors, vending in urban areas, to resume their
businesses which were adversely affected due to COVID-19 induced lock-down.
5. Pradhan Mantri Mudra Yojana (PMMY):
● It
was undertaken by the government to encourage
self-employment.
● Under
this scheme collateral-free loans up to Rs.10 lakh, are provided to small/micro
business enterprises and to individuals to enable them to set up or expand
their business activities.
6. Pradhan Mantri Rojgar Protsahan Yojana:
● It
was initiated in 2016-17 by the Ministry of Labor and Employment.
● Here
the Government pays the entire employer’s contribution (12% or as admissible)
towards the EPS and EPF for all sectors to all eligible new employees for the
next 3 years from the date of registration of the new employee.
7. Skill India Mission:
● It
is implemented by the Ministry of Skill Development and Entrepreneurship with a
focus to provide skilling to one crore people under Short Term Training (STT),
Recognition of Prior Learning (RPL), and Special Project (SP) across the
country for four years with an outlay of Rs. 12,000crore.
● Under
the scheme, a short-duration skill
development training program is being imparted to all prospective
candidates including candidates belonging to BPL in the country.
8. National Urban Livelihood Mission (NULM), 2013:
● It
is a scheme initiated by the Ministry of Housing and Urban Affairs.
● A
Centrally Sponsored Swarna Jayanti Shahari Rozgar Yojana (SJSRY) since 1997 has
been restructured as DAY - National Urban Livelihoods Mission since 2013.
● It
is for all cities with a population of more than 1 lakh or more.
● It
was brought in to decrease poverty, gain
self-employment and skilled wage employment, and build strong grassroots level
institutions.
● The
mission would aim at providing shelter equipped with essential services to the
urban homeless.
WAY FORWARD:
1. Rapid industrialization:
● One
of the remedies of the unemployment situation in India is rapid
industrialisation.
● Increased
number of industries will translate into an increased number of employment
opportunities.
2. Self-Employment promotion:
● Self-employment
should be encouraged more with introduction of liability free loans and
government assistance for funding.
3. Agriculture subsidies:
● Better
irrigation facilities, better farming equipment, dissemination of knowledge
regarding multiple crop rotation and crop management should be focused on.
4. Skill development:
● The
curriculum should be changed with increased focus on learning and skill
development in the latest technologies.
5. Promote labor intensive industries:
● There
are a number of labor 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.