DATA ANALYSIS PROJECT

TOPIC :
POVERTY AND UNEMPLOYMENT

GROUP MEMBERS :
1. SEJAL GUPTA - 20014510054
2. TANYA VERMA - 20014510120
3. SNEHA TEKRIWAL - 20014510115
 ABSTRACT

Poverty is an age old debatable issue in India. With around 3 out of 10 being poor pushing
the number over 800 million, upliftment of disadvantaged and vulnerable target group
seems like a far cry. In this project, the state of affairs of Poverty is discussed with its deep-
rooted causes as well as the impact it has on Indian economy.
Unemployment has been a major problem for India from a long time. The purpose of this
study is to investigate the effect and cause of unemployment which affect the people and
their lives. Therefore this study also aims to include the consequences of unemployment
and recommendations in terms of policy interventions as well as contribution at individual
level, to curb down such issues for now and in the longer period of time. The research
agenda includes exploring:-
Effect of economic growth on unemployment rate in India - In this we will be discussing
about the Okun's law which states that there is a negative impact of Economic growth on
unemployment rate.
Comparison of Indian states unemployment to the rest of the world - In this we will be
discussing about country which has the highest and lowest unemployment rate and various
Survey and research work all over the world.
Unemployment and regional mobility of labour in India - This study deals with the analysis
to check the effect of labor mobility and unemployment at economic growth. Discussing
various questions such as causes and effect of labour mobility.
Covid -19 impact on unemployment - The research agenda includes exploring how this
unemployment crisis may differ from previous unemployment periods and examining the
nature of the grief evoked by the parallel loss of work and life. We can see a drastic rise in
unemployment rate due to this pandemic. People are losing their jobs.
This paper aims to delineate the impact of COVID-19 on unemployment in our study area.
For analyzing this research we mostly relied on secondary data collected through books,
journals, newspapers, authentic internet sources, etc. The outcome of this research will be
helpful for academicians, researchers, and policymakers in related studies.
 POVERTY IN INDIA
India is one of the world’s fastest growing major economy. According to International
Monetary Fund (IMF), at the growth rate of 11.5%, India is going to be the fastest
growing economy in 2021. The world’s only country to register a double-digit growth in
2021. But the sudden outbreak of the novel coronavirus in early 2020 pushed many into
poverty in India. It is estimated that 150-199 million additional people will fall into
poverty at the end of 2021. Due to the pandemic, there were job cuts on a large-scale.
The poverty rate of India is set to rise. According to the CMIE report, around 7 million
jobs were lost in a year. The consumption expenditure has come down and the public
spending on development was sluggish. So, poverty in India is expected to rise in the
coming days.

The Global Multidimensional Poverty Index was launched in 2010 by the United
Nations
Development Program (UNDP) and the Oxford Poverty and Human Development
Initiative
(OPHI). Each year, it measures the complexities of poor people’s lives, individually and
collectively and focuses how the multidimensional poverty has declined. India is among
the four countries to have halved their MPI value.

The MPI is a measure of multidimensional poverty covering more than 100 developing
countries. It tracks deprivation across three dimensions and 10 indicators as indicted
below:

• Education, where years of schooling and child enrolment comes

into effect (1/6 weightage each, total 2/6);
• Health, the child mortality and nutrition come into this (1/6
weightage each, total 2/6);
• Standard of living, includes electricity, flooring, drinking water,
sanitation, cooking fuel and assets.
EFFECT OF POVERTY

High infant mortality –

1.4 million children die each year in India before their fifth birthday. India is one of the
countries with the highest child mortality rates. Pneumonia, malaria and diarrheal
diseases as well as chronic malnutrition are the most frequent causes of death.

Malnutrition –
More than 200 million people don’t have sufficient access to food, including 61 million
children. 7.8 million infants were found to have a birth weight of less than 2.5 kilograms

Child labour –
Although child labour for children under the age of 14 in India is prohibited by law,
according to official figures, 12.5 million children between the ages of 5 and 14 are
working. Aid agencies assume that in reality, there are many more estimating that 65
million children between 6 and 14 years do not go to school. Instead, in order to secure
survival, it is believed that Indian children contribute to the livelihood of their families;
they work in the field, in factories, in quarries, in private households and in prostitution.

Lack of education –
According to UNICEF, about 25% of children in India have no access to education. The
number of children excluded from school is higher among girls than boys. Although
women and men are treated equally under Indian law, girls and women, especially in the
lower social caste, are considered inferior and are oppressed by their fathers, brothers
and husbands.
With every fifth Indian still below the poverty line, the country needs to take huge
strides to alleviate poverty. For most states, though, it did not seem the priority, going by
the poverty score card in the SDG Index 2019-20 released by the NITI Aayog just before
2019 ended.
The index is aimed at measuring performance vis-a-vis the United Nations-mandated
Sustainable Development Goals. The latest edition made it clear that India is far from
the first goal — no poverty by 2030.
India’s overall score of 50 (out of 100) in this respect was, in fact, lower than 54 in the
past year. The decline was across states, except two — Andhra Pradesh and Sikkim.
Arunachal Pradesh plummeted the most — 18 points — while Bihar and
Odisha slipped by 12 points each. Goa and Jharkhand declined by nine points.
None of the states were on track towards zero-poverty by 2030. According to the
index, a state with an overall score of 99 or above (out of 100) is an achiever. No
state was even close.
Tamil Nadu, with a score of 72, and Tripura (70) topped the charts, but they too
have slipped by four points and one over a year.
The performance Meghalaya, Himachal Pradesh, Telangana and Maharashtra
remained stagnant at various spots. Maharashtra, one of the biggest states,
continued to remain a laggard with a score of 47.
With 21 per cent of the population below poverty line, India’s target was to bring
it down to 10.95. But only six states seem set for that. Goa has the lowest
poverty rate of 5.09 per cent.
The remaining 24 were far from the target. Chhattisgarh was the poorest, with
nearly 40 per cent of the population living below the national poverty line,
followed by Jharkhand (37 per cent)
Odisha’s had the highest coverage at 72.6 per cent of eligible beneficiaries.
But 21 states were yet to move fast in the direction. The highest percentage of
households living in kutcha houses was in Arunachal Pradesh (29 per cent),
followed by Odisha (14.2 per cent)
 MAIN CAUSE OF POVERTY IN INDIA

Heavy pressure of population:

Population has been rising in India at a rapid speed. This rise is mainly due to fall in
death rate and more birth rate. India’s population was 84.63 crores in 1991 and
became 102.87 crores in 2001. This pressure of population proves hindrance in the
way of economic development.

Unemployment and under employment:

Due to continuous rise in population, there is chronic unemployment and under
employment in India. There is educated unemployment and disguised
unemployment. Poverty is just the reflection of unemployment.

Capital Deficiency:
Capital is needed for setting up industry, transport and other projects. Shortage of
capital creates hurdles in development.

Under-developed economy:
The Indian economy is under developed due to low rate of growth. It is the main
cause of poverty.

Rural Economy:
Indian economy is rural economy. Indian agriculture is backward. It has great
pressure of population. Income in agriculture is low and disguised unemployment is
more in agriculture.

Lack of Skilled Labour:

In India, unskilled labour is in abundant supply but skilled labour is less due to
insufficient industrial education and training.

Improper use of Natural Resources:

India has large natural resources like iron, coal, manganese, mica etc. It has
perennial flowing rivers that can generate hydroelectricity. Man power is abundant.
But these sources are not put in proper use.

Low rate of growth:

The growth rate of the economy has been 3.7% and growth rate of population has
been 1.8%. So compared to population, per capita growth rate of economy has been
very low. It is the main cause of poverty.
INDIA’S INCOME POVERTY DYNAMICS COMPARED TO OTHER SOUTH-
ASIAN REGIONS

South Asia still accounts for the second highest headcount ratio and therefore the poverty
rate in South Asian region is significantly higher than those of East Asia and Pacific,
Eastern Europe and Central Asia and Middle East and North America.
 Poverty reduction achievements in Sri Lanka have been remarkable during the
last two decades and therefore Sri Lanka accounts for South Asia’s lowest
poverty incidence in terms of both income and multidimensional poverty.
  270 million are considered poor, making India the poorest country in the region
followed by Bangladesh where 18.5% of population is below the poverty line.
 The headcount indices of Nepal, Pakistan and Maldives are 15.0%, 6.1% and
7.3% respectively. In contrast, Sri Lanka has the lowest headcount index (1.9%)
while Bhutan reported the second lowest (2.2%) in South Asian region.
 Nepal which has reduced poverty incidence from 81.0% to 7.26% during the
period of 1984-2010 accounts for the highest poverty reduction (73.7%) and also
the second highest growth rate of poverty reduction (91.0%).
 Similarly, Pakistan and Bhutan have recorded the second and third largest
poverty reduction respectively, while Bhutan reported the highest growth rate of
poverty reduction during the period 2003-2012.
 The headcount index of Bhutan has dropped from 35.22% to 2.20% within nine
years: none of other South Asian countries has achieved similar poverty
reduction in such a short period.

The headcount indices of poorer countries such as India, Bangladesh and

Nepal are higher than that of the South Asia and global averages. In contrast,
Sri Lanka’s headcount index which is the lowest in the region is considerably
lower than both world and South Asian averages.
 EFFECT OF ECONOMIC GROWTH ON
UNEMPLOYMENT RATE IN INDIA

Reducing unemployment and achieving a high rate of economic growth are the most important
priorities of developed and developing country economies. In terms of the success of a country's
economy, economic growth and employment are two extremely important macroeconomic
variables and are indispensable elements of the economic policies of many countries.
Unemployment is a situation of joblessness which occurs when people are without jobs.
Unemployment is a measure of the frequency of unemployment and formula for calculating the
unemployment rate is the number of unemployed people divided by the total number of people in
the civilian Labour force.
It is very difficult to manage the economy in high rate of unemployment situation. Demand
and supply of labour force is the part of labour market which is affected by increasing and
decreasing of employment. Existing of demographic conditions and movement of a country
significantly influence the balance of labour force market regarding the supply of labour force.
According to the ‘Wage Fund Theory’, wages of the labour force are fixed in advance but
because of the lack of capital, the manufactures appoint only a small number of labour force
which results in unemployment.
Some economists have referred to the unemployment as a cause of imbalance between demand
and supply. Overproduction also increases the unemployment; it reduces the prices of
commodities which necessitates reducing the workers, which increase unemployment.

EFFECTS OF UNEMPLOYMENT ON ECONOMY

High unemployment indicates the economy is operating below full capacity and is
inefficient; this will lead to lower output and incomes. The unemployed are also unable to
purchase as many goods, so will contribute to lower spending and lower output. A rise in
unemployment can cause a negative multiplier effect. It has the following bad Effect :-

Politic instability: There is political instability in the country due to unemployment.

Unemployed persons engage themselves in destructive activities. They consider Govts,
worthless. Economic development becomes difficult under conditions of political
instability.

Increase in poverty: Under the situation of Unemployment a man has no source of

income. Unemployment causes poverty. Burden of debt increases. Economic problems
increase.

Loss of human resources: Due to unemployment, human resources go waste. No

constructive use of labour force is made. If human resources are properly used, economic
growth of the country will increase.
 OKUN'S LAW

Okun’s law was postulated by Yale professor and economist Arthur Okun in the early 1960s.
Okun’s law investigates the statistical relationship between a country’s unemployment rate
and the growth rate of its economy. Okun’s law is intended to tell us how much of a
country’s GDP may be lost when the unemployment rate is above its natural rate. It says
that a country’s GDP must grow at about a 4% rate for one year to achieve a 1% reduction in
the rate of unemployment.
Output depends on the amount of labor used in the production process, so there is a
positive relationship between output and employment. Total employment equals the labor
force minus the unemployed, so there is a negative relationship between output and
unemployment.

FINDINGS
Based on the findings of the study, it can be inferred that economic growth has a negative
impact on unemployment rate. The finding is in line with the Okun’s law which explains the
negative relationship between economic growth and unemployment. According to Okun’
Law 1% percentage point increase in unemployment is related to 2% point decrease of
real GDP.
 DATA ANALYSIS AND INTERPRETATION
MONTH
U
n

INDIA RURAL URBAN

UNEMPLOYMENT UNEMPLOYMENT UNEMPLOYMENT
RATE RATE RATE

FEB 2019 7.23% 6.98%. 7.73%

Interpretation:-
The above table and diagram helps us to interpret following points:

1. The unemployment rate in India is 7.23% .

2. The rural unemployment rate in India is 6.98% while urban unemployment rate
in India is 7.73% .
3. This means that the unemployment in urban areas is more than that in rural
areas.
 UNEMPLOYMENT RATE IN INDIA ACROSS DIFFERENT
STATES IN 2020
States Unemployment Rate (in %) are Andhra Pradesh 5.8%, Assam 6.9%, Bihar 10.9%
,Chandigarh 15.6%, Chattisgarh 7.5% ,Delhi 11.6%, Goa 5.3% ,Gujarat 5.5%, Haryana
21.3% ,Himachal Pradesh 13.7%, J&K 17.3%, Jharkhand 6.8% ,Karnataka 2.1% ,Kerala
7.9%, Madhya Pradesh 6.3% ,Maharashtra 4.1%, Meghalaya 6.2%, Odisha 6.3%,
Puducherry 0.9% ,Punjab 12.4%, Rajasthan 10.6% ,Sikkim 2.8%, Tamil Nadu 1.4%
,Telangana 2.4% ,Tripura 26.1%, UP 9.6% ,Uttarakhand 5.6%, West Bengal 6.16%.

Interpretation:-
The above statistics helps us to know the following things:-

1. The unemployment rate across different states and union territories in India is
different.
2. The unemployment rate was highest in Tripura which was 26.1%.
3. The unemployment rate was lowest in Puducherry which was 0.9%.
 EMPLOYED PEOPLE IN INDIA AND USA DURING
DIFFERENT YEARS

Year India (in millions) USA (in millions)

2011 423.1 139.89

2012 451.56 142.48

2013 444.78 143.94

2014 469.65 146.32

2015 465.8 148.85

2016 433.6 151.44

2017 407.5 153.34

2018 406 155.21

2019 400 156.95

Interpretation:-
The above provided information let us know the following facts:-

1. Here we have done the comparison of trends of no. of employed persons in

India and USA.
2. The no. of employed people in India first decreases, then increases and then
starts decreasing while that in the USA was increasing every year.
3. The no. of employed people was highest in India in 2014 while that in the USA
was in 2019.
4. The no. of employed people was least in India in 2019 while that in the USA was
in 2011.
 UNEMPLOYMENT RATE IN INDIA AND USA DURING
DIFFERENT YEARS
YEAR INDIA (in %) USA (in %)

2011 3.53% 8.9%

2012 3.62% 8.1%

2013 3.46% 7.4%

2014 3.41% 6.2%

2015 3.49% 5.3%

2016 3.51% 4.9%

2017 3.52% 4.4%

2018 6.1% 3.9%

2019 7.2% 3.8%

Interpretation:-
The above given information tells us following things:-

1. Here we have done the comparison of the trend of unemployment rate prevailing in
India and USA.
2. The unemployment rate in the USA was decreasing every year while that in India first
increased, then decreased and then started increasing again every year.
3. The unemployment rate in India was highest in 2019 while that in the USA was in 2011.
4. The unemployment rate in India was lowest in 2014 while that in the USA was in 2019.
 EDUCATED UNEMPLOYED IN INDIA

Interpretation:-
The above information tells us following things:-

1. The unemployment rate in India having Educational Qualification more of

Graduation is highest.
2. The unemployment rate in India of below primary is the lowest.
3. As the educational qualifications increase the unemployment rate also
increases in India.
 UNEMPLOYMENT AND REGIONAL LABOUR
MOBILITY IN INDIA
Labour mobility refers to the ease with which laborers are able to move around within
an economy and between different economies. It is an important factor in the study of
economics because it looks at how labor, one of the major factors of production,
affects growth and production.

It is an important factor of production which affects growth and production.

Historically, migration of people for work and education accompanies the structural
transformation of economies, and has paved the way for the release of "surplus
labour" from relatively low productive agricultural activities to sectors enjoying higher
productivity.According to census 2011 and NSSO, Migrants constituted about 30% of
total working population.

TYPES OF LABOUR MOBILITY

There are two primary types of labor mobility:
1. Geographic mobility - It refers to a worker's ability to work in a particular
physical location.
2. Occupational mobility- It refers to a worker's ability to change job types.

EFFECT AND CAUSES

Labour mobility may be caused by shifts in the derived demand for labour on the part
of firms or sectors, or it may be caused by mismatches between workers and their
jobs.

Positive Impact

1. If there is free movement of labour, qualified workers will be attracted to fill vacancies
making the economy more flexible and overcome shortages quicker.
2. If it is easier for labourers to enter a particular industry, the supply of labour will increase
for a given demand, which will prevent excess wage inflation.

Negative Impact
1. An economy which relies on high levels of labour mobility can make labour markets
more stressful, with workers needing to rely on zero-hour contracts without any
guarantee of sufficient work.
2. Highly mobile labour markets may suit some workers who have the educational
attainments and freedom to move around in search of work, but others may lose out
because they struggle to cope with the pace of change.

STATEWISE EMIGRATION CLEARANCES GRANTED

 IMPACT OF COVID ON UNEMPLOYMENT IN
INDIA
Unemployment is a serious problem which is being experienced by most of the
countries throughout the globe. .At the same time due to this COVID-19 pandemic
lockdown, there had been a devastating effect on the unemployment rate in India as
most of the private companies have fired their employees. The main sufferers of this
lockdown are the informal sector employees as the majority of them started losing
jobs since construction works were closed. With no capital, thousands of people
deserted cities, marching to their homelands for several hundreds of miles away in the
absence of government transportation, which showed their intensity of anguish.

What Really Is COVID -19

Corona virus (COVID -19) is an infectious disease caused by a newly discovered corona
virus. The COVID-19 virus spreads primarily through droplets of saliva or discharge
from the nose when an infected person coughs or sneezes, so it's important that you
also practice respiratory etiquette.

The report of the International Labor Organization (ILO) estimates that more than 2.5
crore jobs have been threatened worldwide( as a result of the spread of the novel
coronavirus. It has been seen that four out of five, which is about 81% of the 3.3 billion
people worldwide, have been affected either by partial or full closure of their
workplaces.

The Indian economy started to slow 2019, contributing to a gradual rise in unemployment.
As can be seen in the above, the unemployment rate was 7-8 percent in the procceding
month. India's unemployment rate rose to 23 cent in the month of April amid corona
lockdown. The fluctuations were small j jointly indicated that the unemployment has
actually increased to about 24 percent since the lockdown. The rate of unemployment in
urban India is also shocking. The unemployment rai urban India increased to 30 and 31
percent respectively, in the first and second week of the lockout.

“However, over the next two weeks, it quite dramatically to 23 and 25 percent.
As shown in the above graph India’s unemployment rate dropped to 11 per cent in June
2020 from a record peak of 23.5 per cent in the previous two months, when several
companies resumed operations following weeks of corona virus pandemic closures. The rate
of unemployment in urban India stands higher at 24.95 per cent as against rural 22.89 per
cent .During the last week of April and in the first two weeks of May, the unemployment
rate hovered around 23.48 -23.52 percent.
WHY INDIA IS LOSING JOBS
• The biggest reason is that the whole country is under a lockdown phase and eve" type of
business or service was put on a hold.
• From a large business capital to a small Size service farm, everyone was facing crises
in raising money and to pay the employee their salaries. In order to compensate the
loss, the firms started to lay off their employees
• The major sector who lost their livelihood was all the MSME people who started
their business as seeing a job opportunity and faced a fall due to the pandemic.
• The Sensex on 12th Feb before the Covid-19 crisis entered India was around 41000
and in a spam of I month it came down to 25000 which shows how badly the
industries were affected
• Due to the pandemic many of the Institute and coaching classes are closed. many of
the faculty is still trying to complete their left-over portion on time so that the
student can prepare for the exams.
 CONCLUSION
More than 800 million are below poverty line in India. As frightening as this data sounds, it is
fairly important to note that India has also uplifted 270 million out of poverty in over a
decade. India has established various relief task force and deployed resources to combat the
issue of poverty time and again, PM Relief fund being a recent one to fight the damage done
by Covid-19 on the economy. The impact of Covid-19 pandemic has pushed over 3 crore
Indians out of middle class. Unemployment is a serious social and economic issue that
results in a tremendous impact on everything but is often overlooked. A stronger system of
assessing unemployment should be put in place in order to determine its causes and how to
address it better. If we talk about direct relation between unemployment and economic
growth , it depends on various factors like government policies , inflation , labour mobility,
and currently covid 19 gave immense effects on unemployment and Unemployment went
up to nearly 24 percent in April 2020. As long as growth in real gross domestic product
(GDP) exceeds growth in labor productivity, employment will rise. If employment growth is
more rapid than labor force growth, the unemployment rate will fall. However we have also
studied that how can we overcome from unemployment and maintain balance between
unemployment and economic growth. Government can make flexible policies or new
commute in policies ,ensuring political stability,enhancing the educational standards.
Control of population growth in the nation, launch of new empowerment programs,
encouraging selfemployment/ entrepreneurship, ensuring access to basic education,
reducing the age of retirement ect. This solution may dismay unemployment and our
economy will rapidly enlarge.Based on the findings of the study, it can be inferred that
economic growth has a negative impact on unemployment rate. The finding is in line with
the Okun’s law which explains the negative relationship between economic growth and
unemployment. An implication of the finding is that in order to bring down the problem of
unemployment in an economy, the focus should be on boosting the economic growth.The
relationship between a country’s unemployment rate and the growth rate of its economy
has been discovered by Okun. According to Okun’ Law 1% percentage point increase in
unemployment is related to 2% point decrease of real the GDP.
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