Why is Employment so Important?

 Work is an essential component of most people's lives. It

necessitates more than just getting paid.
 It would include having the freedom to choose how you want to
live your life.
 In terms of the economy, employment provides income to low-
income families, rejuvenates domestic demand for goods and
services, and boosts overall growth.
 On a social level, employment can aid in social healing,
encourage the return of displaced people, and improve long-
term social welfare.
 It's also linked to physical and mental health, and it's a big part
of overall happiness.

What is Unemployment?

 Unemployment occurs when a person actively seeks

employment but is unable to do so.
 Unemployment is an indicator of the economy's health.
 The most common measure of unemployment is the
unemployment rate.
 The unemployment rate is calculated by dividing the number of
unemployed people by the total number of people in the labor
force.

Unemployment in India
Unemployment in India

 According to the Centre for Monitoring Indian Economy, India

has 53 million unemployed people as of December 2021, with a
large proportion of them being women.
 According to the CMIE, 35 million of those unemployed are
actively seeking work, while 17 million are willing to work but not
actively seeking it.
 According to CMIE, women made up 23 percent (8 million) of
the 35 million unemployed who were actively looking for work in
December 2021.
  At the same time, despite not actively looking for work, 53
percent of the 17 million women who were passively
unemployed, or 9 million women, were willing to work.

*To know more about this, click Unemployment in India

Types of Unemployment
Types of Unemployment
Open Unemployment

 It is a condition where people have no work to do.

 It is also known as naked unemployment.
 Here individuals are able to work and are also willing to work but
there is no work for them.
 It is frequently found in larger cities and is less frequent in
villages.
 Most of such individuals come from villages in search of jobs or
might originate in cities themselves.
 Such employment can be seen and counted in terms of the
number of such persons.
 Hence it is called open unemployment.
Disguised Unemployment

 It occurs when a person is the one who seems to be employed

but actually is not.
 His/Her contribution to the total output is either zero or
negligible.
 When more individuals are engaged in a job than the number
actually required it leads to a state of disguised unemployment.
 It is mostly seen in rural areas such as in agricultural activities.

*To know more about this, click Disguised Unemployment

Seasonal Unemployment

 This happens during specific seasons of the year.

 It is more prevalent in sectors and occupations such
as agriculture, holiday resorts, etc., where production activities
take place only in some seasons.
 Therefore, they offer employment for only a certain period of
time in a year.
  People engaged in seasonal activities may remain unemployed
during the off-season
Cyclical Unemployment

 It occurs during the cyclical trends of booms and recessions

of a business cycle.
 This type of unemployment occurs mainly due to either
deficiency or fall in effective demand from consumers which in
turn leads to a fall in production and low demand for labor.
 This type of unemployment occurs for a long period of time and
workers remain unemployed during the entire phase of
slowdown.
 The unemployment crisis due to the 2008 financial crisis is an
example of Cyclical Unemployment.
Educated Unemployment

 Educated unemployment is a situation where someone has

received an education but is currently unemployed.
 Although educational opportunities have increased, job
opportunities have decreased.
Vulnerable Employment

 This means, people, working informally, without proper job

contracts and thus get deprived of any legal protection.
 These persons are regarded as unemployed since records of
their work are never maintained.
 It is one of the main types of unemployment in India.
Technological Unemployment

 It is unemployment that occurs as a result of the loss of jobs

due to changes in technological developments.
 According to World Bank data, the proportion of jobs threatened
by automation in India is 69% on a year-on-year basis.
Structural Unemployment

 It refers to a situation that arises as a result of a change in the

structure of the economy.
  For instance, when an economy transforms itself from a labor-
intensive to a capital-intensive economy, structural
unemployment happens due to the mismatch of skills.
 As a result, workers who do not know how to operate the new
and advanced technologies will be removed.
 This type of unemployment happens as the current workers do
not have the skills required by their employers.

*To know more about this, click Structural Unemployment

Underemployment

 It is a scenario where employed people are contributing to

production less than they are capable of.
 It can be estimated in terms of time, which is visible under-
employment, or type of work, which is invisible under-
employment.
 Part-time workers come under this category.
Casual Unemployment
When a worker is employed on a day-to-day basis for a contractual
job and must leave when the contract expires, this is known as casual
unemployment.
Chronic Unemployment

 Chronic unemployment refers to joblessness that has lasted for

a long time in the economy.
 To put it another way, chronic unemployment is caused by
persistent long-term unemployment in the economy.
Frictional Unemployment

 It is when there is the least amount of unemployment

prevailing in an economy due to workers quitting their previous
jobs and searching for new jobs.
 One of the major causes of occurrence of frictional
unemployment is lack of information about the availability of
jobs and non-willingness of mobility on the part of workers (it
means workers are not willing to travel to a distant place or a
new state for employment).
 A frictionally unemployed person remains unemployed for a very
brief period of time.
*To know more about this, click Frictional Unemployment
Voluntary Unemployment

 It is when workers are either not seeking work or are in

transition from one job to another.
 Voluntary unemployment is present all the time in an economy.
 As there will always be some workers, who quit their previous
jobs in search of new ones
Involuntary Unemployment

 It is when workers are actively seeking employment and

are willing to work but are unable to get work.
 Involuntary unemployment happens in an economy during the
time of depression and decreases in aggregate demand for
goods and services.

Measurement
Measurement of Unemployment in India

 Measurement of unemployment can be carried out by various

methods such as the usual status approach, weekly status
approach, and current daily status approach.
 These measures enable quantification of the existing
unemployment rate in the economy and thereby help in taking
remedial steps.
 Some of the approaches used for measuring unemployment
in India are the Usual Status Approach, Weekly Status
Approach, and Current Daily Status Approach.

*To know more about this, click Measurement of Unemployment in

India

Causes
Causes for Unemployment in India

 Rapid population growth and labor force expansion.

 Underdeveloped economy.
 Slowly growing agricultural sector.
 Flawed system of Education.
 Missing manpower planning.
  Deteriorating of village industries.
 Technology that isn't appropriate.
 Slowly growing industrial sector.
 Private investment has slowed in labor-intensive industries,
especially since demonetization.

Government Policies
Government Policies / Schemes to Deal with Unemployment

 The government of India has implemented schemes to generate

employment such as wage-based employment and promotion of
self-employment.
 In order to counter the rising unemployment scenario in the
country which spiraled during the pandemic, the government
undertook various initiatives to generate employment and
reduce unemployment in the country.
 Some of them are given below.

*To know more about this, click Government Schemes for

Unemployment in India
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)2005

 In 2010 the National Rural Employment Guarantee Act, of 2005

introduced this scheme.
 This scheme guarantees 100 days of work a year to every rural
household with an aim to enhance the livelihood security of
people
 Its foundation was laid in 1991 when the P.V Narashima
Rao government proposed a pilot scheme for generating
employment in rural areas that included employment generation
for agricultural labor during the lean season, infrastructure
development, and enhanced food security.
 This act covers all the districts of India except those that have a
100% urban population.
 Its implementation is monitored by the Ministry of Rural
Development (MRD) in association with the state governments.
 Since 2006, more than 30 million water conservation-related
assets have been created in the country’s rural areas under this
scheme.
*To know more about this, click Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA)2005
National Career Service Scheme

 National Career Service (NCS) is one of the mission mode

projects of the E-Governance Plan.
 It focuses on bridging the gap between job-seekers and
employers such that candidates seeking training and career
guidance are provided by various agencies concerned with
training and career counseling.

*To know more about this, click National Career Service Scheme

National Rural Livelihood Mission

 This program was launched by the Ministry of Rural

Development (MoRD), Government of India in June 2011 as a
restructured version of Swarna Jayanti Gram Swarozgar Yojna
(SGSY).
 It was renamed as Deendayal Antayodaya Yojana (DAY-
NRLM) in 2015.
 This program was envisioned to facilitate the poor so as to
achieve increased access to their rights, entitlements, and public
services, diversified risk, and better social indicators of
empowerment.

*To know more about this, click National Rural Livelihood Mission

National Urban Livelihood Mission

 It was envisioned to address the livelihood difficulties of the

urban street vendors by helping them with space, institutional
credit, social security, and skills accessing emerging market
opportunities.
 It also provides the shelter with essential services to the urban
homeless in a phased manner.
 It is implemented by the Ministry of Housing and Urban
Affairs.
 The National Urban Livelihood Mission scheme consists of two
basic elements one being for urban India and the other for rural
India:
 o The urban component is known as Deen Dayal Antyodaya
Yojana that is implemented by the Ministry of Housing and
Urban Poverty Alleviation.
o The rural component known as Deen Dayal Upadhyaya
Grameen Kaushalya Yojana is implemented by the
Ministry of Rural Development.

*To know more about this, click National Urban Livelihood Mission

Jobless Growth
Jobless Growth

 Jobless growth is a situation when the economy is able to

produce more goods and services without a simultaneous
increase in employment opportunities.
 It is a dominant issue in the Indian economy more so because of
the decreasing window from when the demographic dividend
becomes the demographic burden.
 There is the involvement of a greater population in the
agriculture sector even though the sector contributes very less to
the overall GDP of the country.
 The tertiary sector contributes the largest to the overall GDP of
India, however, the job creation by this sector is mostly of formal
type due to which inclusion of informal workforce in this sector is
reduced.

*To know more about this, click Jobless Growth

Growth and Changing

Growth and Changing Structure of Employment

 The slow growth of employment in India during the post-

liberalization period has been a striking feature of the country's
economic transformation.
 Over this time, economic growth has been highly uneven across
sectors and regions.
 Agricultural and manufacturing sector growth has been sluggish
for the majority of the post-liberalization period.
 Not only has average employment growth been low over this
period, but the uneven pattern of growth has resulted in
significant changes in employment structure.
  Since the second half of the 2000s, the number of people
employed in agriculture has decreased significantly.
 For example, the Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) was introduced in the mid-2000s
with the promise of providing each rural household with a
guaranteed 100 days of employment.
 Despite the fact that such a promise was never fulfilled, the
program did result in an increase in employment opportunities in
rural areas, particularly in the early years of its implementation.
 On the other hand, a slow increase in children's school
attendance rates is said to have resulted in the exodus of a
group of young people from the labor force.

*To know more about this, click Growth and Changing Structure of

Employment

Casualisation of Workforce
Casualisation of Workforce

 The process of moving from self-employment and regular

salaried employment to casual wage work is known as the
casualization of the workforce.
 The construction industry, where agency work and false self-
employment are common, the hospitality industry, and
outsourced areas like home care and cleaning, are all examples
of industries where this type of work is prevalent. However,
casualization is becoming more common in professional fields
such as aviation, education, local government, and the NHS
( National Health Service).

In formalization
In formalization of Indian Workforce

 In India, the formalization of the workforce refers to the loss of

workers from formal sectors due to competition or labor laws
that are too strict.
 There is a rise in the number of people working in the informal
sector.
 In recent years, India has seen a historic shift in the workforce
from the formal to the informal sectors.
  In the midst of the ongoing debate over the extent to which the
Indian economy has been formalized (a major policy goal of the
central government), it is worth noting that the sudden loss of
work during the pandemic forced a portion of salaried workers to
turn to self-employment or casual wage work, or to leave the
workforce entirely, thereby expanding the informal sector.

Formal Sector Employment

Formal Sector Employment

 All jobs in the formal sector have specific working hours and
regular wages, and the worker's job is guaranteed.
 The employees are employed by the government, the state, or
private businesses.
 It is a registered business that is required to pay taxes.
 In India, only 0.3 percent, or 1.7 lakh, of the businesses are
registered or formal.
 In the July-September quarter of 2021, India's formal sector
employment increased by 0.2 million compared to the April-June
quarter, with 11,503 establishments surveyed.

Unemployment Rate (UR)

Unemployment Rate (UR)

 The unemployment rate is the most frequent measure of

unemployment.
 The unemployment rate is the number of people unemployed
divided by the working population/people working in the labor
force.
 It is represented in the following manner.


Unempolyent rate = enemployed workers/tota labour forces*100

Unemployment rate = (Unemployed Workers / Total labour force) × 100

Conclusion
Conclusion
India is one of the world's largest countries, with an annual population
growth rate of one percent. The unemployment problem in India is not
reflected in the country's unemployment rate. Its issue is a low
employment rate and a discouraged young female workforce,
according to CMIE. India's path to prosperity, according to CMIE, is to
find work for nearly 60% of the population. "India needs to employ an
additional 187.5 million people to meet global employment rate
standards," it said, adding that this is a tall order given the current
employment rate of around 406 million people.

Government Schemes for

Unemployment in India - Indian
Economy Notes
Various Government Schemes for Unemployment in India
Pradhan Mantri Mudra Yojana (PMMY)
It was undertaken by the government to encourage self-employment.
Under this scheme collateral-free loans up to Rs. 10 lakh, are
provided to small/micro business enterprises and to individuals to
enable them to set up or expand their business activities.
Pradhan Mantri Rojgar Protsahan Yojana
It was initiated in 2016-17 by the Ministry of Labor and Employment.
Here government pays the entire employer’s contribution (12% or as
admissible) towards the EPS and EPF for all sectors to all eligible new
employees for the next 3 years from the date of registration of the new
employee.

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Skill India Mission

 It is implemented by the Ministry of Skill Development and

Entrepreneurship with a focus to provide skilling to one crore
people under Short Term Training (STT), Recognition of Prior
Learning (RPL), and Special Project (SP) across the country for
four years with an outlay of Rs. 12,000 crore.
 Under the scheme, a short-duration skill development training
program is being imparted to all prospective candidates
including candidates belonging to BPL in the country.
Pradhan Mantri Garib Kalyan Yojana (PMGKY)
Here the government of India contributes both 12% of the employer’s
share and 12% employee’s share under the Employees Provident
Fund (EPF), totaling 24% of the wage for the wage month from March
to August 2020 for organizations having up to 100 employees with
90% of such employees earning less than Rs. 15000/-.

PM SVANidhi

 This scheme was initiated by the Ministry of Housing and Urban

Affairs.
 It focuses to provide affordable working capital loans to street
vendors to resume their livelihoods that were impacted during
the Covid-19 lockdown.
 The vendors can avail of a working capital loan of up to Rs.
10,000, which is repayable in monthly installments in the tenure
of one year.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

 It was initiated in the 10th five-year plan in 2005 and works

under the Ministry of Rural Development.
 It is a centrally sponsored scheme with the pattern 90:10.
 It provides a legal guarantee of at least 100 days of unskilled
manual work in rural areas.
 Any member greater than 18 years of age of a rural household,
willing to do unskilled manual work can apply to the local Gram
Panchayat (which will issue a Job Card).
National Career Service

 It was envisioned for transforming the National Employment

Service to provide various employment-related services such as
job matching, career counseling, vocational guidance,
information on skill development courses, apprenticeships,
internships, etc through an online portal.
  National Career Service (NCS) focuses on a one-stop solution
to provide various services related to employment and career-
related services to the citizens of India.
 This program is implemented by the Directorate General of
Employment, Ministry of Labour & Employment.
National Rural Livelihood Mission (NRLM)

 The scheme named Deendayal Antyodaya Yojana- NRLM

( national rural livelihood mission) was launched by the Ministry
of rural development, govt.
 In India in June 2011 a restructured form of the Swarna Jayanti
gram Saroja Yojna (SGSY).
 This scheme is fully focused on promoting self-employment and
the organization of the people who live in rural areas.
 In this program, the main idea is to organize the poor into a self-
help group.
 This scheme aims to create efficient and effective institutional
platforms for the rural poor, enabling them to make their
livelihood and good standard of living.
 It aims to cover 7 crore low households, 600 districts, 6000
blocks, 2.5 lakh gram panchayats, and 6 lakh villages across the
country through self-help groups and helps them for livelihood in
a period of 8 to 10 years.
National Urban Livelihood Mission (NULM), 2013

 It is a scheme initiated by the Ministry of Housing and Urban

Affairs.
 A Centrally Sponsored Swarna Jayanti Shahari Rozgar Yojana
(SJSRY) since 1997 has been restructured as DAY - National
Urban Livelihoods Mission since 2013.
 It is for all cities with a population of more than 1 lakh or more.
 It was brought in to decrease poverty, gain self-employment and
skilled wage employment, and build strong grassroots level
institutions.
 The mission would aim at providing shelter equipped with
essential services to the urban homeless