Notes Class 11 Chapter 7 Economics Maharashtra Board

Unemployment in India

Introduction

India is a fast-growing economy but faces a major challenge: unemployment. Unemployment means people who want to work cannot find jobs, leading to wasted human resources, poverty, and slow economic growth. Young people, a key resource for progress, are especially affected. The imbalance between job opportunities and population growth causes large-scale unemployment, pushing some into unproductive or harmful activities like gambling or crime.

Meaning of Unemployment

Unemployment refers to people who are willing and able to work but cannot find jobs at the current wage rate. In economics, it is studied based on:

Nature of unemployment
Working age group (15–59 years)
Demand and supply of labor
Prevailing wage rate

According to the National Sample Survey Organization (NSSO):

A person is unemployed if they work less than 14 hours per week.
A person is underemployed if they work 15–28 hours per week.
A person is considered employed if they work 8 hours per day for 273 days a year.

Key Terms

Involuntary Unemployment: People want to work but cannot find jobs due to excess labor supply.
Voluntary Unemployment: People are able to work but choose not to.
Underemployment: A person’s skills and capacity are not fully utilized.
Full Employment: A situation where all resources are used efficiently (hypothetical).

Types of Unemployment

Unemployment is classified into Rural and Urban categories.

A) Rural Unemployment

Found in villages, it includes:

Seasonal Unemployment:

Common in agriculture, which depends on the monsoon.
Workers are jobless for 5–7 months a year during the off-season.
Also seen in industries like tourism, sugar factories, and fisheries.

Disguised Unemployment:

Also called invisible unemployment.
More people work than needed, so removing some workers does not affect output.
Example: 5 workers produce 10 quintals of jowar; 16 workers still produce 10 quintals.
Caused by overpopulation in agriculture, joint family systems, and lack of alternative jobs.
Around 20% of rural labor is disguisedly unemployed.

B) Urban Unemployment

Found in towns and cities, it includes:

Educated Unemployment:

Educated people (e.g., graduates, post-graduates) cannot find jobs.
Reasons: Preference for white-collar jobs, lack of employable skills, and imbalance between job opportunities and educated youth.

Industrial Unemployment:

Affects skilled and unskilled workers in industries.
Types of industrial unemployment:
Technological Unemployment: Job loss due to new technology (e.g., computerization, robots).
Frictional Unemployment: Temporary job loss due to issues like machine breakdowns, raw material shortages, or strikes.
Cyclical Unemployment: Job loss during economic downturns (depression) when demand and production fall.
Structural Unemployment: Long-term job loss due to changes in the economy, like shifts in government policies or industry relocation (e.g., manual typists replaced by computers).

Extent of Unemployment in India

Unemployment is a widespread issue, with millions affected.
State-wise data (2015–16) shows varying unemployment rates across India.
Example: States like Goa, Punjab, Maharashtra, and Tripura have high unemployment rates.

Causes of Unemployment

Jobless Growth:
Economic growth is not fast enough to create jobs for the growing labor force.
Increase in Labor Force:
High population growth due to declining death rates and high birth rates.
Excessive Use of Machinery:
Industries and agriculture use machines instead of labor, reducing job opportunities.
Lack of Skill Development:
Few vocational training programs to match industry needs.
Expectations Towards Employment:
Educated youth prefer white-collar jobs and lack entrepreneurial spirit.
Seasonal Nature of Agriculture:
Agriculture depends on monsoons, leaving workers jobless for months.
Slow Economic Development:
Limited industrial growth and infrastructure development restrict job creation.
Migration of Rural Population:
Rural people move to cities for jobs, increasing urban unemployment.

Effects of Unemployment

Economic Effects

Waste of human resources.
Difficulty in implementing welfare schemes.
Poverty and income inequality.
Growth of the informal sector.
High dependency ratio.

Social Effects

Social tension and unrest.
Loss of human dignity.
Feelings of helplessness.

General Measures to Reduce Unemployment

Develop the agricultural sector.
Provide alternative occupations.
Improve infrastructure.
Reform the education system.
Promote tourism.
Use labor-intensive techniques.
Develop IT and communication sectors.
Offer vocational training and skill development.
Encourage rural industrialization.
Motivate self-employment.

Specific Government Measures

Employment Guarantee Scheme (EGS) (1972):
Started in Maharashtra to provide rural employment and reduce poverty.
Later adopted by other states.
Swarnjayanti Gram Swarozgar Yojana (SGSY) (1999):
A self-employment scheme for rural poor.
Swarna Jayanti Shahari Rozgar Yojana (SJSRY) (1997):
Provides jobs for urban unemployed/underemployed.
Funded 75% by the central government, 25% by states.
Pradhan Mantri Rozgar Yojana (PMRY) (1993):
Creates self-employment for educated unemployed youth.
Training Rural Youth for Self-Employment (TRYSEM) (1979):
Trained rural youth for self-employment; merged into SGSY in 1999.
Jawahar Rozgar Yojana (JRY) (1989):
Wage employment for rural areas; renamed Jawahar Gram Samrudhi Yojana in 1999.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) (2009):
Guarantees 100 days of wage employment per year for rural households.
Deen Dayal Upadhyaya Grameen Kaushalya Yojana (2014):
Skill training for rural youth (15–35 years) for sustainable employment.
National Policy for Skill Development and Entrepreneurship (2015):
Promotes entrepreneurship and skill development.
Start-Up India Initiative (2016):
Encourages young people to start businesses.
Pradhan Mantri Kaushal Vikas Yojana (2016–20):
Provides monetary rewards for skill training; budget of ₹12,000 crores.