MARXIST THEORY OF UNEMPLOYMENT
Employment in each sector on
2019, 42.6 percent of the
workforce in India were
employed in agriculture, while
the other half was almost
evenly distributed among the
two other sectors, industry
and services. While the share
of Indians working in
agriculture is declining, it is
still the main sector of
employment.
India Services SectorIndia has the fastest growing (9.2 percent in
2015-16) service sector in the world with the lowest share of
services employment (28 percent in 2014), contributing about 66
percent to the Indian GDP.
Manufacturing accounts for nearly 17 per cent of India’s GDP but
the sector has seen employment decline sharply in the last 5 years.
From employing 51 million Indians in 2016-17, employment in the
sector declined by 46 per cent to reach 27.3 million in 2020-21.07-
May-2021
Employment in primary sector
In the primary sector, men account to about 43% and women
account to about 62.8% of the workforce. The total percentage of
workforce in the primary sector accounts to about 48.9%.
 Types of unemployment i n I ndiaThe unemployment rate in I ndia rose to 7. 2 percent i n February 2019,
the hi ghes t s inc e September 2016, a nd a ls o up from 5. 9 percent i n February 201 8, a ccording to the
l a tes t data c ompiled by the Centre for Monitoring I ndian Ec onomy ( CMI E) .Wha t is
U nempl oyment? Unemployment oc curs w hen a person w ho i s a c tivel y s earching for empl oyment i s
una bl e to fi nd w ork. U nemployment i s often us ed a s a mea sure of the health of the economy. The
mos t frequent measure of unemployment i s the unemployment rate, w hich i s the number of
unempl oyed people divided by the number of people i n the la bor force.National Sa mple Survey
O rga ni zation ( NSSO ) defines employment a nd unemployment on the following a ctivity statuses of a n
i ndi vidual:Working ( enga ged in a n ec onomic a ctivity) i .e. ‘Employed’. Seeking or a vaila ble for w ork i .e.
‘U nemployed’.Neither s eeking nor a va ilable for w ork.The fi rst tw o c onstitutes la bour forc e a nd
unempl oyment ra te i s the perc ent of the la bour forc e tha t i s w ithout w ork.Unemployment ra te =
( U nemployed Workers / Total l abour force) × 1 00Types of U nemployment i n I ndiaDisguised
U nempl oyment: It i s a phenomenon wherein more people a re employed tha n a ctua lly needed.I t i s
pri ma rily traced in the a gric ultura l a nd the unorganised s ectors of I ndia. Seasonal U nemployment: It is
a n unempl oyment tha t oc curs during c ertain s easons of the year.Agricultural l abourers in I ndia ra rely
ha ve w ork throughout the year.Structural U nemployment: It i s a c ategory of unemployment a rising
from the mi s match between the j obs a vaila ble i n the ma rket a nd the s kills of the a va ilable w orkers in
the ma rket.Many people i n I ndia do not get j ob due to la ck of requisite s kills a nd due to poor
educ a tion l evel, it becomes difficult to train them.Cyclica l Unemployment:It i s result of the busines s
c yc l e, w here unemployment ri ses during recessions a nd declines with economic growth.Cyclical
unempl oyment figures i n I ndia a re negligible. I t i s a phenomenon that i s mostly found i n c a pital ist
ec onomies.Tec hnologic al U nemployment: It is loss of j obs due to c ha nges i n technology. In 2016, World
Ba nk da ta predicted that the proportion of j obs threa tened by a utomation i n I ndia i s 69% yea -r on-
yea r. Frictiona l Unemployment:The Frictional U nemployment a lso c alled a s Search Unemployment, refers
to the ti me l a g between the j obs w hen a n i ndividual i s s earching for a new j ob or i s s witching
betw een the j obs. In other w ords, a n employee requires ti me for s earching a new j ob or s hifting from
the ex i s ting to a new j ob, this i nevita bl e time dela y c a us es the frictional unemployment. I t i s often
c ons i dered a s a voluntary unemployment beca us e i t is not ca us ed due to the s horta ge of j ob, but in
fa c t, the w orkers themselves quit their j obs i n s ea rch of better opportuniti es.V ulnera ble
Empl oyment:This mea ns , people w orking i nforma lly, w ithout proper j ob c ontracts a nd thus s ans a ny
l ega l protection. These pers ons a re deemed ‘unemployed’ s ince rec ords of their work a re never
ma i nta ined.It i s one of the main types of unemployment i n I ndia.Related TermsUnemployment tra p is
a s i tua tion w hen unemployment benefits di scoura ge the unemployed to go to w ork. People fi nd the
opportuni ty c ost of going to w ork too hi gh w hen one c an s imply enjoy the benefits by doing
nothi ng. Description: While the purpose of s oci al s ec urity a nd w elfa re s ys tems i s to provide relief to
the unempl oyed, they end up providing them w ith a n i nc entive not to return to w ork. A n
unempl oyment tra p a rises w hen opportunity c ost of going to w ork i s hi gher tha n the inc ome received,
di s c oura ging people from returning to w ork a nd being producti ve.Harmonised unemployment ra tes
defi ne the unemployed a s people of w orking a ge who a re w ithout w ork, a re a vaila bl e for w ork, a nd
ha ve ta ken s pecific s teps to fi nd w ork. The uniform a pplica tion of this definition res ults i n estima tes
of unempl oyment ra tes tha t a re more i nterna tionally c omparable than estimates ba sed on na ti onal
defi ni tions of unemployment.This i ndic ator i s measured i n numbers of unemployed people a s a
perc enta ge of the la bour forc e a nd i t i s s easonally a djusted. The l a bour force i s defi ned a s the tota l
number of unemployed people pl us those i n c ivi lian employment.Mea surement of U nemployment i n
I ndi a National Sa mple Survey Office ( NSSO) , a n organiz ation under Mi nistry of Statistics a nd
Progra mme I mplementa tion ( MoSPI) mea sures unemployment in I ndia on fol low ing a pproac hes: Usual
Sta tus A pproac h: This a pproac h es timates only those persons a s unemployed w ho ha d no ga inful w ork
for a ma j or ti me during the 365 da ys preceding the da te of s urvey.Weekly Status Approach: This
a pproa c h records only those pers ons a s unemployed w ho did not ha ve gainful w ork even for a n hour
on a ny da y of the w eek preceding the da te of s urvey.Daily Status Approach: Under this a pproach,
unempl oyment s tatus of a pers on i s measured for eac h da y i n a reference week. A person having no
ga i nful w ork even for 1 hour in a da y i s described a s unemployed for tha t da y.Unemployment s ta ts
( ba s ed on fi ndings from CMIE’s l ates t da ta) :The unemployment rate in I ndia ros e to 7. 2 percent i n
Februa ry 2019, the hi ghest s inc e September 2016, a nd up from 5. 9 percent i n February 201 8. The total
number of employed persons in February 2019 is estimated a t 400 million a gainst 406 million i n the
yea r- a go period a nd 407.5 milli on employed i n February 2017.The l abour pa rticipation ra te fell from
43. 2% i n J anuary 201 9 to 42.7% in February 2019.La bour Pa rticipation Ra te defines that s ection of
w orki ng population in the ec onomy w hich i s c urrently employed or s eeking employment.Causes of
Types of unemployment •