• 14 June 2024

Unemployment in India: Evolution of Figures and Trends Over the Years

Aug 15, 2023

Unemployment, the state of being jobless despite active job hunting, holds significance beyond individual circumstances. It serves as a crucial gauge of economic vitality, with the unemployment rate emerging as a key indicator. This rate, calculated by dividing the number of unemployed individuals by the labor force, provides insights into economic well-being and workforce dynamics. Delve into the essentials of Unemployment in India and its pivotal role in assessing the overall health of an economy.

unemployment in India

Here’s a summary of Unemployment in India since Independence:

Post-independence Unemployment Trends:

  • 1956-1972: Unemployment doubled from 5 million to 10 million.
  • Unemployment rate increased from 2.6% to 3.8%.

1980s to Mid-2010s Unemployment:

  1. The average unemployment rate in India: 2.8%.
  2. Unemployed persons increased from 7.8 million (1983) to 12.3 million (2004-05).
  3. Unemployment rate rose from 7.3% (1999-2000) to 8.3% (2004-05)

2018-2019 Unemployment:

  1. Unemployment rate in India: 3.5%.
  2. 18.6 million Indians were jobless.
  3. 393.7 million were in vulnerable, poor-quality jobs.

Unemployment in 2020 (Covid-19 Impact):

  1. The unemployment rate in India increased to 10.3%.
  2. Female urban unemployment rate: 13.1%.
  3. Female labor force participation rate: 20.6%.
  4. Women’s unemployment rate: 17%, compared to 6% for men.

These statistics highlight the evolving unemployment trends in India over different time periods, the impact of factors like economic growth and the Covid-19 pandemic, and the significant gender disparity in unemployment rates and labor force participation.

Unemployment Situation in India

  • In Context
    • India’s unemployment rate rose to 7.83% in April from 7.60% in March according to data from the Centre for Monitoring Indian Economy (CMIE).
  • Key Data
    • The urban unemployment rate rose to 9.22% in April from 8.28% in March.
    • The rural unemployment rate dropped to 7.18% from 7.29%.
    • Unemployment rate was highest in Haryana at 34.5%, followed by Rajasthan at 28.8%, Bihar at 21.1%, and Jammu and Kashmir at 15.6%.
    • Job opportunities have been hit by sluggish domestic demand and the slow pace of economic recovery amid rising prices.
    • Employment in India fell from 408.9 million in 2019-20 to 387.2 million in 2020-21 and then recovered to 401.8 million in 2021-22.
    • The recovery in 2021-22 was inadequate. Employment was still 1.7%, or 7 million short of the employment level of the pre-pandemic year of 2019-20.
  • Issues
    • Job Losses:
      • Nearly 78 million jobs were lost during the quarter of June 2020, which roughly coincides with the first wave of COVID-19.
      • Similarly, 13 million jobs were lost during the second wave during the quarter of June 2021.
      • In 2021-22, the unemployed who were actively seeking work but were unable to find any were estimated at 33 million.
    • Participation of women:
      • Women suffer job losses disproportionately during economic shocks.
      • The phenomenon repeated itself during the pandemic.
      • Women accounted for less than 11% of all jobs in 2019-20, but they accounted for nearly 52% of the 7 million job losses since then.
      • The female labour force participation rate among urban women was abysmally low at 9.4% in 2019-20 and fell to 7% in 2021-22.
      • It has been difficult to raise women’s participation in the labour force and offer appropriate jobs in adequate numbers to aspiring women.
    • Impact of the lockdown:
      • In April 2020, when India was subjected to the most stringent lockdown, 79 million small traders and daily wage labourers lost employment.
      • The lockdowns demonstrated both the vulnerability and the flexibility of this category of workers.
      • Employing women and providing salaried jobs are the two big challenges that the pandemic has posed that are going to be difficult to tackle soon.
  • Conclusion and Way Forward
    • The unemployment situation can be tackled by providing skill development training at a much faster rate than what was happening in the last few years.
    • The employment objective and the output objective can be achieved, if greater investment is directed to small enterprises rather than to large enterprises.
    • The Central government can easily give a directive and incentive to the industries to train rural and tribal youth in their establishments so that skill training can take place.
    • Social security should be provided to the poor, so that people do not die of starvation.

Causes of unemployment

Social Factors:

  • Caste system restricts work opportunities for specific castes in certain areas.
  • Dependence on joint family income in large families with businesses can lead to non-working individuals.

Rapid Growth of Population:

  • Moreover, the ongoing rise in population presents a significant challenge within India.
  • Additionally, population growth plays a substantial role in contributing to the issue of unemployment.

Dominance of Agriculture:

  • Furthermore, approximately half of India’s workforce is dependent on agriculture, which is characterized by underdevelopment and predominantly seasonal employment opportunities.

Fall of Cottage and Small Industries:

  • Industrial growth negatively impacted cottage and small industries.
  • Production decline in cottage industries led to artisan unemployment.

Immobility of Labour:

  • Low labor mobility due to family attachment and other factors.
  • Moreover, factors such as language, religion, and climate contribute to limitations in mobility.

Defects in Education System:

  • Furthermore, India’s education system lacks specialized training to meet the demands of modern job requirements.
  • Additionally, unemployment often stems from a shortage of skills tailored for specialized roles.

Key Highlights for Reducing Unemployment:

Promoting Skill Development:

  • Furthermore, partnering with private institutions for industry-aligned training further enhances employability.

Encouraging Entrepreneurship:

  • Furthermore, incentives, the establishment of incubation centers, and the implementation of simplified regulations actively promote the growth of startups and facilitate job creation.

Strengthening Manufacturing:

  • Initiatives like PLI Scheme attract investments, boost industries, and generate employment.

Enhancing Rural Opportunities:

  • Agricultural modernization, rural skill training, and infrastructure development uplift rural employment.

Public-Private Partnerships (PPP):

  • Moreover, investor-friendly policies and incentives serve to encourage increased private participation in infrastructure and job-oriented projects.

Leveraging Digitalization:

  • Embracing technology and digital literacy opens new job avenues in emerging sectors.

Education-Industry Collaboration:

  • Additionally, curricular alignment, internships, and vocational training work together to bridge the gap between education and employment.

Empowering India’s Demographic Dividend

  • Generally, it is important to prioritize quality education, vocational training, and entrepreneurship programs..
  • Additionally, efforts should be made to promote innovation, support startups, and provide access to finance for self-employment.
  • Moreover, fostering public-private partnerships and industry collaborations can contribute to creating more job opportunities.

Labour-Intensive Technology and Investment in Agriculture

  • Moreover, the adoption of labor-intensive techniques in agriculture can enhance both rural and urban employment.
  • Furthermore, escalating investments in agriculture can foster job creation and trigger growth by establishing backward and forward linkages.
  • Additionally, diversifying agricultural activities can absorb a greater workforce and yield elevated income levels.

Education, Health, and Rural Development

  • Generally, the expansion of education and healthcare not only generates employment but also contributes to the accumulation of human capital.
  • Moreover, the development of rural areas serves to mitigate urban migration and consequently lessen the pressure on jobs in urban centers.
  • Furthermore, an overhaul of the education system should be undertaken, focusing on producing a skilled workforce through enhanced industry collaboration and robust vocational training programs.

National Employment Policy (NEP) and Decentralized Development

  • Furthermore, it is crucial to implement a comprehensive National Education Policy (NEP) that effectively addresses a range of social, economic, and labor-related concerns.
  • Additionally, promoting decentralized development by offering tax incentives to attract industries to underdeveloped regions can contribute significantly to addressing these challenges.

Unemployment Rate Over the Years

Year Unemployment Rate (%)
1991 6.74
1992 6.82
1993 6.80
1994 6.83
2020 10.20
2021 7.71
2022 7.33

Initiatives taken by the government for reducing unemployment

Here are the key highlights of the government’s initiatives to reduce unemployment:

Pradhan Mantri Mudra Yojana (PMMY)

Furthermore, initiated in 2015, the program facilitates collateral-free loans amounting to Rs. 10 lakh, aiding self-employment ventures in small/micro businesses and among individuals.

Pradhan Mantri Rojgar Protsahan Yojana (2016-17)

Furthermore, for a duration of three years, the government covers the employer’s contribution towards EPS and EPF for newly eligible employees.

Skill India Mission(Ongoing)

Furthermore, its objective is to impart skills to one crore individuals through Short Term Training, Recognition of Prior Learning, and dedicated Special Projects.

Pradhan Mantri Garib Kalyan Yojana (Ongoing)

Additionally, the government provides a 24% wage contribution for eligible organizations during the wage months spanning from March to August 2020.

PM SVANidhi( Ongoing)

Furthermore, it extends accessible working capital loans of up to Rs. 10,000 to street vendors who have been adversely affected by the Covid-19 lockdown.

Mahatma Gandhi National Rural Employment Guarantee Act (2005)

Furthermore, it ensures social security by guaranteeing 100 days of unskilled manual work per year for rural households, providing them with employment opportunities.

National Career Service (2015)

Furthermore, the program provides IT-enabled career centers that serve as platforms for delivering career guidance and offering comprehensive employment assistance.

National Rural Livelihood Mission (Ongoing)

Moreover, it encourages self-employment endeavors and the formation of self-help groups among rural communities, fostering sustainable livelihoods.

National Urban Livelihood Mission (2013)

Moreover, the initiative aims to concentrate on diminishing urban poverty by creating avenues for self-employment, fostering skilled wage employment, and providing shelter for those experiencing homelessness in urban areas.

Integrated Rural Development Programme (2014)

Moreover, it offers employment prospects and facilitates skill enhancement for the underprivileged.

Various employment programs(Ongoing)

Moreover, efforts such as JRY, Sampoorna Grameen Rozgar Yojana, and others place a greater emphasis on fostering employment opportunities and promoting skill development.

National Skill Development Mission (2014)

Drives ‘Skill India’ agenda by converging and scaling skill training efforts.

Pradhan Mantri Kaushal Vikas Yojana (2015)

Offers industry-relevant skill training to enhance employability.

Start Up India Scheme(2016)

Promotes startups, entrepreneurship, and job creation by providing support and incentives.

Moreover, these initiatives generally strive to tackle unemployment, encourage skill enhancement, and further self-employment prospects across diverse sectors of the economy.

Also, read https://thelogicalpie.com/disconnected-tracing-the-history-of-internet-shutdowns-in-india/society/

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