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Why Unemployment in India is a never ending stigma?

How serious is the ‘Unemployment Issue’ in India? Official economists and politicians disregard any such thought of Unemployment with cases of Jobshaving been made available during the past term of the National Democratic Alliance (NDA) government. Notwithstanding, proof from various sources focuses to an undeniably more serious emergency of employment generation than is acknowledged.

India Unemployment Rate Spiked To 23% Post Lockdown, Says CMIE
India Unemployment Rate Spiked To 23% Post Lockdown, Says CMIE / Image Source: BloombergQuint

Over the last few months, the Government of India and the mainstream media have highlighted the return of economic growth. However, very little attention has been paid to the job market. India’s unemployment rate has been soaring. According to Mumbai-based think tank Centre for Monitoring Indian Economy (CMIE)It went up to 7.91 per cent in December 2021 from 6.3 per cent in 2018-2019 and 4.7 per cent in 2017-18, when the trend started to change — a sign that this phenomenon is not just due to Covid. In urban areas, this has gone up to 9.30 per cent in December 2021 from 8.09 per cent in January 2021. In rural areas, it has gone up to 7.28 per cent against 5.81 per cent.

Telangana reported the lowest unemployment rate at 0.7 per cent in January, followed by Gujarat (1.2 per cent), Meghalaya (1.5 per cent) and Odisha (1.8 per cent).

However, Haryana had the highest unemployment rate at 23.4 per cent, followed by Rajasthan at 18.9 per cent.

CMIE had estimated the number of unemployed in India as of December 2021 at 53 million, of which a huge proportion were women.

Even if one disregards the effect of the pandemic and takes pre-pandemic figures, the unemployment rate in India has consistently remained higher than the South Asia average, staying over 5.5% of the total labour force. It fares moderately better than some other developing countries but still lags behind many G20 economies and falls behind our immediate neighbours Pakistan, Bangladesh, Sri Lanka and Bhutan. Relatedly, in 2019, the employment to population ratio was only 46.74%, lower than both the world average and South Asia average. 

Why unemployment is rising in India?

One of the key reasons behind rising unemployment last month was the failure of the farm sector to absorb the influx of additional labour, according to CMIE.

However the most important causes of Unemployment in India are as follows:

1. Rapid growth of population and increase in labour force.

Constant increase in population has been a big problem in India. It is one of the main causes of unemployment. 

2. Underdevelopment of the economy.

Indian economy is underdeveloped and role of economic growth is very slow. This slow growth fails to provide enough unemployment opportunities to the increasing population.

3. Slow growth in the agricultural sector.

Agriculture is underdeveloped in India. It provides seasonal employment. Large part of population is dependent on agriculture. But agriculture being seasonal provides work for a few months. So this gives rise to unemployment.

4. Defective system of education.

The lack of skill-based education in schools and colleges is the main reason for unemployment. Our education system is primarily concerned with the quality and knowledge and written examination more than practical based tasks. For these reasons, after completion of graduation, while facing interviews, students find themselves lacking in confidence and skills.

5. Absence of manpower planning.

6. Degeneration of village industries.

7. Inappropriate technology.

8. Slow growth of industrial sector.

The rate of industrial growth is slow. Though emphasis is laid on industrialisation yet the avenues of employment created by industrialisation are very few.

9. Immobility of labour.

Mobility of labour in India is low. Due to attachment to the family, people do not go far off areas for jobs. Factors like language, religion, and climate are also responsible for low mobility. Immobility of labour adds to unemployment.

10. Jobless growth.

In India, since independence the rate of economic growth is considerably higher than the growth of employment. Moreover the active rate economic growth is not enough to absorb the increasing labour force in India. As a result there is widespread unemployment in the country.

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