Unemployment @ 04 Nov 2016

Unemployment is a major problem of a developing country like India.
The term unemployment can be understood as a situation in which no job is available for a person to earn means of livelihood. Unemployment is found both in industrial and agricultural sector. In India, many factors have led to unemployment.

They are as follows:

1. Over population.

2. Seasonal nature of certain works.

3. Economic fluctuations

4. Extensive Automation and use of IT which has replaced man power.

Unemployment problem is at an alarming rate. It is difficult to get accurate factual information on unemployment. But it can be noticed that there is a significant increase in the rate of unemployment. Unemployment is found not only in urban sector but also in rural sector.

Forms of Unemployment:

1. Seasonal unemployment:

It is a common feature of rural sector. Agriculture is a seasonal occupation. At least for 5 months in a year a sizeable portion of the working force is unemployed.

Disguised unemployment:

It is a situation in which a person appears to be employed, but enough work is not available. Too many workers are engaged in doing in a small job.

Under employment:

It is a situation which a person is employed, but his capacity is not utilised to the full extent. His wages are not in accordance with his capacity.

Urban unemployment:

The problem of urban unemployment is of two kinds viz: Unemployment among indusrial labourers.

2. Unemployment among the educated middle class:

Unemployment among industrial labourers is on account of rapid increase in population. The size of economically active population is bound to increase. With the spread of urbanisation people from rural areas have been shifting to the urban areas. During the off season many workers in agriculture come to the industrial centres to seek employment. The rate at which the expansion of industries has been taking place is not keeping pace with growing labour force.

Educated unemployment occurred with the rapid expansion of educational facilities. The number of graduates and post-graduates in various fields like law, medicine; Engineering, Science, management etc. have enormously increased.

3. Unemployment in the organised sector:

The organised sector includes all establishments in the Public sector and non-agricultural establishments engaging 10 or more workers in the private sector. On account of extensive privatisation, there are a number of discharges dismissals and retrenchments which have resulted in unemployment in the public sector. In private sectors the policy is to employ less number of people and get maximum work done by them.

Effect of Unemployment:

1. Unemployment has caused a lot of hardship and agony particularly among the youngsters. It has created frustration. Bhagwati Committee report of 1971 reveals the period of waiting before unemployment.

Qualification – Waiting period

Graduates – 13 months

Female graduates -14 months

Graduates in Arts and humanities -16 months

Graduates in Engineering and- Technology 11 months

Diploma holders- 17 months

Agricultural diploma holders- 25 to 27 months

The waiting period has become much more than the committee report in the present days.

2. Continuous unemployment causes personal hardship to the family members.

3. It has resulted in increase in crime rates. Quite often the unemployed youth commit crimes to earn their living.

4. Brain drain: As a consequence of lack opportunities in India, intelligent youth migrate to foreign countries. Their intellectual abilities are used by foreign countries which causes loss to India.


The government of India set up a committee with M. Bhagavati as chairman to suggest measures to solve unemployment. Based on the committee report, the government took the following measures.

i. Rural works programme:

The emphasis under the programme was on the construction of civil works of permanent nature such as rural housing, electrification construction of roads.

Marginal farmers and agricultural labours under the scheme were to be assisted with subsidised credit support for agricultural and subsidiary occupations like dairy, poultry, Fishery horticultural operations etc.

ii. Agro service centres:

The scheme provided for assistance for self employment to unemployed graduates and diploma holders in mechanical, agricultural and allied fields. It aimed to help in establishing workshops, organising agricultural machinery and technical services like supply of spare parts etc.

iii. Crash Programme for rural employment:

The primary objective of the scheme was to generate additional employment through a network of rural projects.

iv. National Rural employment programme:

It was implemented in 1980. It was central sponsored programme with 50% central assistance. It aimed at creating community assets for strengthening rural infra­structure.

v. Food for work programme:

It was a scheme to use food grains as payment for work to the persons living below poverty line. Objectives of the programme were:

a. To generate additional gainful employment for both men and women in rural areas.

b. To create durable community assets and strengthen the social infrastructure in order to increase production and raise living standards in the rural areas.

c. To utilise surplus food grains for the development of the country’s human resources.

Recent schemes to reduce unemployment—Jawahar Gram Samrudhi Yojana 1999, Employment Assurance scheme. Sampoorna Grameen Rozgar Yojana Swarna Jayanti Gram Swarozgar Yojana.

Pradhan Mantri Gramodyog Yojana. It was introduced in 2000-01. Its objective is to focus on village level development in five critical areas. Eg. : health, primary education, drinking water With The Objective Of Improving Quality Of Life In Rural Areas And Provide Rural Employment.

Progress of Various Schemes:

In spite of implementing various schemes to remove unemployment the problem still continues to exist, the following reasons can be attributed for the failure of various schemes:

i. Corruption in the implementation of schemes.

ii. Bureaucracy in the administration of schemes.

iii. Preparation of fake muster rolls.

iv. Paying less than the stipulated wages etc.

v. Lack of effective representation of poor in the implementation of schemes.

Management Perspective:

Problem of unemployment has its impact on the practices of an organisation. It has resulted in unfair and corrupt practices in private organisations such as fake muster rolls, low wages. Harassment at work place etc. The attitude of some private sectors towards employees is unfair on account of availability of surplus labour.