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Unemployment Challlenges in India, by Tarun Das

Unemployment Challlenges in India, by Tarun Das

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Published by: Professor Tarun Das on Jul 13, 2009
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02/04/2013

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Emerging Unemployment Issues and Challenges-A Case Study on India
 DR. TARUN DAS, Economic Adviser, Ministry of Finance, India, and Consultant, UN-ESCAP, Bangkok, Thailand.
 1.Unemployment, Employment and Poverty
Comprehensive data on employment and unemployment are collected by the NationalSample Survey Organisation (NSSO) through quinquennial surveys. The latest suchsurvey, results of which are available, was conducted in the 55
th
Round (1999-2000). Theother quinquennial surveys since 1980 with a relatively large number of households wereconducted in 1983 (38
th
Round), 1987-88 (43
rd
Round), and1993-94 (50
th
Round).However, the NSSO conducts mini Annual surveys in between the quinquennial surveys,although results are not strictly comparable due to small sample size. The NSSO employs two different concepts of employment and unemployment in their surveys- (a) the usual status (US) where a person remains employed or unemployed for alonger period during a reference period of 365 days and (b) the current weekly status(CWS) where a person remains employed or unemployed for a major share of theworking time within a reference period of 7 days. Under each approach, persons are firstclassified as ‘labour force’ and ‘out of labour force’, and thereafter ‘labour force’ isclassified into ‘employed’ and ‘unemployed’. For unemployment, US approach is anindicator of chronic unemployment, while CWS approach covers both chronic andseasonal unemployment. The distribution of persons as per the latest quinquennial surveyfor 1999-2000 is given in
Table-1, which
is self-explanatory.
Table-1 Percentage distribution of persons by broad usual activity statusRuralUrbanMalesFemalesPersonsMalesFemalesPersons
1.Self-employed 32.0 17.0 24.7 22.0 6.2 14.52.Reg.wage/ salaried 5.2 0.9 3.1 21.8 4.4 13.53.Casual labour 17.2 10.8 14.1 9.3 3.4 6.54.Total working (1+2+3) 54.4 28.7 41.9 53.1 14.0 34.55.Unemployed 0.8 0.1 0.4 2.2 0.4 1.36.Studends 24.7 19.7 22.3 28.2 25.4 26.97.Engaged in Domestic works 0.8 31.2 15.6 0.5 45.0 21.78.Others 19.3 20.3 19.8 16.0 15.2 15.69.Not in labour force (6+7+8) 44.8 71.2 57.7 44.7 85.6 64.210.Labour force (4+5) 55.2 28.8 42.3 55.3 14.4 35.811.Total persons (9+10) 100.0 100.0 100.0 100.0 100.0 100.0
1.1Labour Force and Unemployment
1
 
India’s labour force is estimated to be approximately 375 million in 2002 and is expectedto increase by 7 to 8.5 million per year in the first decade of this century and will increase by a total of about 160-170 million by 2020, i.e., 2.0 percent per annum. Approximately35 million persons in 2002 are unemployed of which approximately three-fourth of theunemployed is in rural areas and three-fifth among them are educated. (PlanningCommission: Vision 2020).As per the estimates made by the Planning Commission on the basis of NSSO surveys,overall unemployment rate declined from 8.3 percent in 1983 to 6 percent in 1993-94 butincreased to 7.3 percent in 1999-2000 (
Table-2).
There were similar trends in both ruraland urban sectors with urban unemployment rates being higher than rural unemploymentrates every year. During 1993-2000, the rate of increase of unemployed persons in therural areas at 5.3 percent was significantly higher than that at 3.5 percent in urban sector.This was due to basically stagnation of agricultural employment during this period.
Table-2: Past and present macro-scenario on employment and unemployment(CDS Basis) (Person years)
(Million)Growth per annum (%)19831993-941999-20001983 to 1993-941993-94 to1999-2000All IndiaPopulationLabour ForceWorkforceUnemployment Rate (%) No. of unemployed7182612398.3228943363166.02010043633377.3272.02.42.7-0.12.01.31.14.7RuralPopulationLabour ForceWorkforceUnemployment Rate (%) No. of unemployed5462041888.0166592552415.6147282702517.2191.82.22.4-1.21.71.00.75.3UrbanPopulationLabour ForceWorkforceUnemployment Rate (%) No. of unemployed17257529.65.523581757.25.827693867.67.113.03.33.60.52.72.42.33.5Source: Planning Commission
2
 
1.2Worker Population Ratios (WPRs)
The number of persons employed per 100 persons, called Worker Population Ratios(WPRs) or Work Force Participation Rates (WFPRs), for different rounds and for malesand females in rural and urban areas by two different concepts viz. Usual Status (US) andCurrent Weekly Status (CWS) are presented in
Table-3.
As expected, ratios are lower for CWS than those for US, the difference being larger for rural India than for urban areas. Itis observed from the table that there is very little variation in the WPRs for either malesor females during 1983-2001 implying that the employment scenario remained more or less stable over the years.Age-specific WPRs presented in
Table-4
indicate that during the period 1998-2001,WPRs for the age-group 15-59 years increased for all categories i.e. rural males, ruralfemales, urban males and urban females. In both urban and rural areas, the increase waslarger for females than for males.
Table-3: Worker Population Ratios (Number of persons employed per 100 persons)Round (Year)MalesFemalesUSCWSUSCWS
RURAL
 
38 (1983) 5.5 5.4 3.4 2.343 (1987-88) 5.4 5.3 3.2 2.250 (1993-94) 5.5 5.3 3.3 2.755 (1999-2000) 5.3 5.1 3.0 2.556 (2000-2001) 5.4 5.3 2.9 2.2
URBAN 
38 (1983) 5.1 4.9 1.5 1.243 (1987-88) 5.1 4.9 1.5 1.250 (1993-94) 5.2 5.1 1.6 1.455 (1999-2000) 5.2 5.1 1.4 1.356 (2000-2001) 5.3 5.2 1.4 1.2
Table-4 Age-specific Worker Population Ratios (WPRs) According to US
(Number of persons employed per 100 persons)Age-Group(Years)RuralUrbanMalesFemalesMalesFemales
19982000-0119982000-0119982000-0119982000-015-14
5.3 4.5 4.2 3.9
3.8
3.1
1.3
2.1
15-29
73.2 75.0 35.1 37.3
57.3
59.6
11.9
14.5
30-59
96.9 98.0 47.7 54.3
94.2
95.7
21.7
26.1
60+
71.4 69.5 21.9 19.8
42.0
40.4
7.8
9.2
15-59
86.0 87.3 42.0 46.4
77.2
78.6
17.2
20.7
5+
60.7 61.7 29.6 32.3
55.9
58.2
12.6
15.3
3

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