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EMPLOYMENT & UNEMPLOYMENT
IN INDIA – PROBLEMS AND
POLICIES
XI-Eco
Ch. 15
Introduction
 Employment :
 It refers to a situation when a person is able to
earn his livelihood either through self-
employment or by working as wage-employment.
 Unemployment:
 It refers to a situation when a person who is able
and willing to work does not get work at the
prevailing wage rate.
Employment: Trends & Structure
 Sharp decrease in the rate of employment
generation during mid-1990s.
Year %
1983-84 2
1993-94 1.25
Year %
1999-2000 1.25
2004-2005 2.62
Decrease Increase
Distribution of Total Employment by
Economical Sectors (%)
Sectors 1983-84 1993-94 2004-05
Primary 66 62 53
Secondary 14 15 18
Tertiary 20 23 29
0
10
20
30
40
50
60
70
1983-84 1993-94 2004-05
Primary
Secondary
Tertiary
Employment in Organized Sector
Unorganized
Sector:
whole of agriculture
and small-scale
industries, and most of
mining, construction,
trade, transport and
communications, social
and personal services.
Organized Sector:
Manufacturing Sector
(except small-scale
industries), electricity,
transport, financial
services and
government.
Observations:
1. Only about 7-8 % of the total employment in the
economy
2. Share in total employment has decreased steadily
from about 8% (1983) to 7% (2005).
3. Public sector
1. 68.8% (1983)
2. 71% (1994)
3. 68% (2007)
4. Public and Private sector combined also decline during
the period between 1994 and 2007 observed.
Year Persons Employed
(millions)
1983 24
1995 27.5
2000 28.1
2005 26.4
2007 27.2
Rural and Urban Employment
 Rural Areas:
 1980s: Increase (1.72% / annum)
 Sharp Increase in Govt. Expenditure:
1. Employment-oriented rural development programs
2. Expenditure on rural infrastructure
 1990s: Slowdown (0.47% / annum)
 Urban Areas:
 1980s: Increase (3.1% / annum)
 1990s: Sharp decrease (2.7% / annum)
Decrease in the growth rate of employment in organized sector: Partly due to
slowdown in the industrial growth but largely because of decline in
employment in the public sector in absolute terms
Meaning of Unemployment
 It’s a situation when there are some able-
bodied persons who have the ability to work
and are willing to work at the prevailing
wage-rate but are not able to find work which
may yield them some regular income.
Types of Unemployment
Developed
Countries
Cyclical Frictional
Types of Unemployment in India
Rural
Disguised Seasonal Educated
Types of Unemployment in India
Urban
Open Under Educated
Techno
logical
Extent & Magnitude
 Data about employment and
unemployment are provided by
1. The Census
2. National Sample Survey Organization
(NSSO)
3. Employment Exchanges
4. Central Statistical Organization (CSO)
5. Planning Commission
Extent & Magnitude
 Conventionally, unemployment estimates
relate to open unemployment only.
 But it’s not adequate since it doesn’t
include disguised unemployment.
FiveYear Plan Magnitude (In Million)
Beginning of the First Plan 3.3
Beginning of theThird Plan 7.1
Beginning of the Sixth Plan 12
Beginning of the Eight Plan 23
Beginning of the Ninth Plan 34
Extent & Magnitude
 NSSO has evolved standardized concepts and definitions of
unemployment .
 It has developed three main standardized concepts of
unemployment:
1. Usual Principal Status
2. CurrentWeekly Status
3. Current Daily Status
Year No. of UE UE Rate
1983-84 8 Million 2.88 %
1993-94 9 2.62
1999-2000 10.5 2.78
2004-05 13.1 3.06
 Usual Principal Status can be
considered as a measure of
chronic unemployment, while
CurrentWeekly Status and Daily
Status can be considered as a
proxy for seasonal unemployment
and underemployment.
Consequences of Unemployment
1. Wastage of Productive Resources
2. Loss of Resource Efficiency
3. Adverse effect on Saving & Capital
Formation
4. Source of Exploitation
5. Leads to Inequalities of Income
6. Burden on Government
7. Change inWork Attitude
8. Adverse effect on Individual’s Personality
9. Adverse Social and Political Effects
Causes of Unemployment
1. Slow rate of Economic Growth
2. Slow rate of Agriculture
3. Low Capital Formation
4. Rapid Population Growth
5. Use of Capital-intensiveTechniques
6. Defective Education System
7. Inadequate Employment Planning
8. Weak Manpower Planning
9. Decline of Cottage & Small-scale Industries
10. Rural-urban Migration
11. Labour Laws
Measures to remove Poverty
 Long-run Remedies
 High rate of economic growth
1. Sector with high emp. Potential
2. Produce commodities which have high emp. Intensity
3. Production technique
4. Fiscal & Monetary Policies
 Increasing investment
 Development of agricultural sector
1. Considerable Scope
2. High value & highly labour-intensive crops
3. Animal husbandry and fishery
4. Rural Development schemes
5. Labour-intensive techniques
6. Extension of social services Continue……….
Measures to remove Poverty
 Long-run Remedies
 Rural Industrialisation
1. Processing of Agricultural Produce
2. Encouraging Small-scale industries
3. Decentralization
4. Encouraging low Capital-intensive Techniques
 Creation of Self-employment opportunities
 Employment for the educated unemployed
 Manpower Planning
 Educational Reforms
 Greater emphasis on skill formation
 Control of Population Growth
Full Employment
 The situation when all those who wants &
able to do the work get the work
Thank You

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Employment & Unemployment in India

  • 1. EMPLOYMENT & UNEMPLOYMENT IN INDIA – PROBLEMS AND POLICIES XI-Eco Ch. 15
  • 2. Introduction  Employment :  It refers to a situation when a person is able to earn his livelihood either through self- employment or by working as wage-employment.  Unemployment:  It refers to a situation when a person who is able and willing to work does not get work at the prevailing wage rate.
  • 3. Employment: Trends & Structure  Sharp decrease in the rate of employment generation during mid-1990s. Year % 1983-84 2 1993-94 1.25 Year % 1999-2000 1.25 2004-2005 2.62 Decrease Increase
  • 4. Distribution of Total Employment by Economical Sectors (%) Sectors 1983-84 1993-94 2004-05 Primary 66 62 53 Secondary 14 15 18 Tertiary 20 23 29 0 10 20 30 40 50 60 70 1983-84 1993-94 2004-05 Primary Secondary Tertiary
  • 5. Employment in Organized Sector Unorganized Sector: whole of agriculture and small-scale industries, and most of mining, construction, trade, transport and communications, social and personal services. Organized Sector: Manufacturing Sector (except small-scale industries), electricity, transport, financial services and government.
  • 6. Observations: 1. Only about 7-8 % of the total employment in the economy 2. Share in total employment has decreased steadily from about 8% (1983) to 7% (2005). 3. Public sector 1. 68.8% (1983) 2. 71% (1994) 3. 68% (2007) 4. Public and Private sector combined also decline during the period between 1994 and 2007 observed. Year Persons Employed (millions) 1983 24 1995 27.5 2000 28.1 2005 26.4 2007 27.2
  • 7. Rural and Urban Employment  Rural Areas:  1980s: Increase (1.72% / annum)  Sharp Increase in Govt. Expenditure: 1. Employment-oriented rural development programs 2. Expenditure on rural infrastructure  1990s: Slowdown (0.47% / annum)  Urban Areas:  1980s: Increase (3.1% / annum)  1990s: Sharp decrease (2.7% / annum) Decrease in the growth rate of employment in organized sector: Partly due to slowdown in the industrial growth but largely because of decline in employment in the public sector in absolute terms
  • 8. Meaning of Unemployment  It’s a situation when there are some able- bodied persons who have the ability to work and are willing to work at the prevailing wage-rate but are not able to find work which may yield them some regular income.
  • 10. Types of Unemployment in India Rural Disguised Seasonal Educated
  • 11. Types of Unemployment in India Urban Open Under Educated Techno logical
  • 12. Extent & Magnitude  Data about employment and unemployment are provided by 1. The Census 2. National Sample Survey Organization (NSSO) 3. Employment Exchanges 4. Central Statistical Organization (CSO) 5. Planning Commission
  • 13. Extent & Magnitude  Conventionally, unemployment estimates relate to open unemployment only.  But it’s not adequate since it doesn’t include disguised unemployment. FiveYear Plan Magnitude (In Million) Beginning of the First Plan 3.3 Beginning of theThird Plan 7.1 Beginning of the Sixth Plan 12 Beginning of the Eight Plan 23 Beginning of the Ninth Plan 34
  • 14. Extent & Magnitude  NSSO has evolved standardized concepts and definitions of unemployment .  It has developed three main standardized concepts of unemployment: 1. Usual Principal Status 2. CurrentWeekly Status 3. Current Daily Status Year No. of UE UE Rate 1983-84 8 Million 2.88 % 1993-94 9 2.62 1999-2000 10.5 2.78 2004-05 13.1 3.06  Usual Principal Status can be considered as a measure of chronic unemployment, while CurrentWeekly Status and Daily Status can be considered as a proxy for seasonal unemployment and underemployment.
  • 15. Consequences of Unemployment 1. Wastage of Productive Resources 2. Loss of Resource Efficiency 3. Adverse effect on Saving & Capital Formation 4. Source of Exploitation 5. Leads to Inequalities of Income 6. Burden on Government 7. Change inWork Attitude 8. Adverse effect on Individual’s Personality 9. Adverse Social and Political Effects
  • 16. Causes of Unemployment 1. Slow rate of Economic Growth 2. Slow rate of Agriculture 3. Low Capital Formation 4. Rapid Population Growth 5. Use of Capital-intensiveTechniques 6. Defective Education System 7. Inadequate Employment Planning 8. Weak Manpower Planning 9. Decline of Cottage & Small-scale Industries 10. Rural-urban Migration 11. Labour Laws
  • 17. Measures to remove Poverty  Long-run Remedies  High rate of economic growth 1. Sector with high emp. Potential 2. Produce commodities which have high emp. Intensity 3. Production technique 4. Fiscal & Monetary Policies  Increasing investment  Development of agricultural sector 1. Considerable Scope 2. High value & highly labour-intensive crops 3. Animal husbandry and fishery 4. Rural Development schemes 5. Labour-intensive techniques 6. Extension of social services Continue……….
  • 18. Measures to remove Poverty  Long-run Remedies  Rural Industrialisation 1. Processing of Agricultural Produce 2. Encouraging Small-scale industries 3. Decentralization 4. Encouraging low Capital-intensive Techniques  Creation of Self-employment opportunities  Employment for the educated unemployed  Manpower Planning  Educational Reforms  Greater emphasis on skill formation  Control of Population Growth
  • 19. Full Employment  The situation when all those who wants & able to do the work get the work