Posted by Anjali Kaur on Aug 03, 2020

Problems and Solutions to Unemployment in India

When we learned about types of employment, we came to see that India has a formal and informal sector of employment. Now when a person is able and willing to work, but does not get a job at the prevailing wage rate, that situation is termed as unemployment. There are several causes of unemployment in India. Today, I will explain the problems and solutions to unemployment in India. Let’s learn. 🙂

Problems or Causes of Increasing Unemployment in India

Population Explosion

  • A high rate of population growth in India is responsible for the problem of unemployment in the country.
  • An increase in population is at a faster rate than the increase in the number of job opportunities.

Low Rate of Economic Development

  • Inadequate job opportunities for the existing labor force, despite the creation of new employment opportunities.
  • The actual growth rate of the economy is lesser than the required growth rate, and therefore, unemployment is increasing.

Low Level of Development in Agriculture

  • It includes old methods of cultivation, seasonal nature of agriculture, and disguised unemployment.
  • The scope of generating more employment opportunities from the primary sector is less because of the fixed area of land. This makes the problem of unemployment more severe.

Low Level of Industrial Development

  • An increase in population and migration of workers from rural areas to urban areas adds more to the problem of unemployment in the industrial sector.
  • Most of the existing industrial units are shifting to capital intensive techniques.

Lack of Vocational and Technical Education

  • The existing education system fails to provide vocational and technical education to students at all levels.
  • Degree-oriented nature is different from the job-oriented nature of education.

Joint Family System

  • In India, there is a Joint Family System prevalent both in a rural and urban area.
  • In large families, many family members depend on the joint income of the family.
  • Its effect is similar to the effect of disguised unemployment.

Solutions to solve the problem of unemployment

  • Increase in Growth Rate of GDP– If the GDP will grow faster, it implies people are actively engaged in producing goods and services.
  • Population Control– By spreading awareness about controlling the population, the problem of unemployment can be controlled.
  • Development of the Agricultural Sector– More than half of India’s population is engaged in the agricultural sector. So, the development of the agriculture sector can help in creating more job opportunities.
  • Educational Sector Reforms– More reforms need to be introduced in the education sector. An increase in literacy rate will help in creating more job opportunities.
  • Financial Help to Self-Employed Workers– By providing financial help or loans to the self-employed workers, the problem of unemployment can be controlled.
  • Infrastructural Development– The development of infrastructure in the rural and urban areas, can help in connectivity. More people can travel to work for longer distances, and the problem of unemployment can be reduced.

Government Policies and Programs in Employment Generation

The efforts of government can be broadly classified into two categories:

Direct Efforts

  • The government employs people in various departments for administrative purposes.
  • It runs industries, hotels, and transport companies and hence promotes employment directly to the workers.
  • People working in government schools, government hospitals, government offices are some of the examples of direct employment by the government,

Indirect Efforts

  • When the production of goods and services by the government enterprises increases, then private enterprises that provide raw materials to government enterprises will also be able to increase the production of goods and services produced by them.
  • It will generate employment opportunities in the private sector too because of the increase in their sales and output. For example, when government-owned steel companies increase their output, it will result in an increase in output and employment in private companies who purchases steel from the government companies.
  • Special measures are undertaken by the government to solve unemployment includes:
    • Rural Employment Generation Program.
    • Pradhan Mantri Rozgar Yojana
    • Swarna Jayanti Shahari Rozgar Yojana
    • Swarnajayanti Gram Swarozgar Yojana
    • MGNREGA, 2005. To read about these programs, check out my post on the Poverty Alleviation Programs.

Thank You!

Photo by Ryoji Iwata on Unsplash

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