Unemployment in India

Chapter Outline
7.1 Introduction

7.2
7.2 Unemployment and Labour Force
7.3 Types of Unemployment
7.3.1 Rural Unemployment
7.3.2 Urban Unemployment
7.3.3 Unemploymentin Developed Countries
7.4 Magnitude of Unemployment in Less Developed Countries
7.5 Measurement Tool of Unemployment/Employment
7.6
7.6 Trends and Structure of Unemployment in India
1.7 Causes for Rising Unemployment in India Since 1951
7.8 Evil Effects of Unemployment: Economic and Social
Programmes to Generate Employment and Alleviate Poverty
7.9
Performance
7.10 Key Comparisons of Employment
Inter-state

7.11 Broad Impact of Job Creation Schemes

7.12 Conclusion

1.1 INTRODUCTION
all parts of the
Pr of unemployment is grave and complex. It is found in
from which the
n some measure or the other. It
is a chronic disease
I been suffering, especially
after independence.
Coeconomy has always
of unemployment gets reflected
in the poverty of the unemployed
a n loss of human resource tor
the
SOn. It is a blot on the society and permanent the back
c that during the plan period,
G r e a t e r tragedy lies in the fact
 Business Environ
log of unemployed has been rising with every successive Five Mmem
According to Bhagwati Committee, "Problem ofunemployment Year has
artaken,
p
serious turn and there is apprehension of it becomingstil nas Plan

future. Further, according to

the Penguin dictionary of rim in the
"Unemployment is the existence of a section of the
willing to work, but unable to find gainful employment. Unemnlo able and
conomics
force k
labour force
measured as the percentage of the total force out of
Economists say that India has been suffering from
work
Jobless Growth:
employmentis
recent years. This
phrase implies that gross domestic output has been incrn more
without accompanying any increase in
job opportunities. Such a grO3
termed as growth without social
justice. This evil needs to be dealt wi
sincerely seriously at all levels and at the earlicst.
and
ith
In this
chapter, an attempt is made to ponder over and focuss the
related to the problem of various
the magnitude, its unemployment like the nature, types, estimationisun.
sues
causes, evil effects, policy of
presriptions and their evaluation
7.2
UNEMPLOYMENT AND LABOUR FORCE
It is essential to
ose who are in
understand, what constitutes labour force.
mentally) ought
job, and those who are
to be deemed as the seeking jobs (being Internationally
fit physically and
all
of Pigou, "A man is constituents of labour force. In the
unemployed
employed and also desires to be only when he is both without job or not
words
working, nor seeking, are kept out employed." Conversely, those who are neither
described this later lot as those side the boundary of labour
force.
concepts with regard to forming voluntary unemployment. Other Keynes related
implying those persons who are
Work force on the other
employment/unemployment are labour
willing to take up jobs at different supply
hand is that wage rates.
working. Thus, part of labour force,
which is actually
Labour Force -

Work Force
Rate of
=

Unemployed Persons
unemployment in an
economy may be calculated as
Rate of Unemployment=
under:
Number of
Number of PersonsUnemployed Persons
7.3
Comprising Labour Force-x100
TYPES OF
UNEMPLOYMENT
There is a
large variety of
under
employment, unemployment such disguised
seasonal
as

frictional unemployment. One unemployment, educated unemployment,

unemployment in
can find unemployment
every type of above and
Developed countriesdeveloping country like India and that too in mentioned
face cyclical and or
abundance.
In India, technological
unemployment structural in nature. By this we mean
is unemployment.
capacity is inadequate to absorb sufficient that
of physical a
number of productive
capital is too low to cater to the needs of unemployed. The stock
existing number of iob
inemplovmentin mdia 7.3

the rate of growth of capital is very low and the

eekers. Also th mber of job

cekers
is increasing rapidly, owing to
growing population. Thus, the back
a unemployed keep on increasing. year after year. This is a permanent
omenon and it has given rise to various other types ofunemployment.
henomenona

nCs of Unenmployment in India are explained herewith the help of Chart 7.1.
Chart 7.1

Unemployment in India
(Structural)

Rural Urban
Unemployment Unemployment

Disguised or Seasonal
Concealed Unemployment
Unemployment
Educated
Open Unemployment/Industrial
Unemployment
Unemployment

in the mobility of labour

occurs due to the problems
Frictional Unemployment techniques of
different occupations.
When development takes place,
across and disappear. New
contract

production undergo rapid changes. Old industries but desirable

come up. In such
a situation, it is
industries with latest technology which are decaying and
out of those old industrial units
that workers m o v e
and perks. During
which are promising and which offer higher wages
join those to the other, some
industry occupation
or
the time gap between moving from
one
unemployment. This
which is termed asfrictional
labourers are rendered jobless
workers to acquire new skills/training.
be utilised by unemployed at the time of
period can
decide to remain jobless,
ladies may
For example, working settled in a new
environment.

weeks or months, till they get

marriage for few is of the worker
himself or herself,
Since the decision of remaining outof job,
unemployment.
one may liken it to voluntary
with economic progress, (changing
kind of unemployment is associated
As this cost of economic development.
it is the necessary
technology), so some say c o n c e r n in an agricultural

unemployment is not much of a

Further, such
out that adoption
of new technology (e.g.
like India. One may point a number of
or harvesters) displaces
economy
thrasher, and
tractors, dibler machines, the total farm output
as it enhances
Workers, but this is not a big problem, structure in the
Indian
without diversifying
the occupational
turnover
offarmers
economy.
 4 Business Environ
7.3.1 Rural Unemployment
Generally, two types of unemployment are found in the rural are
areas:
(1) Disguised Unemployment: India is predominantly an arie
country. Most of the people in villages appear to be enga ricultur
agricultural activities. Out of these people there is a portion, whi
unemployed but hidden or concealed. Entire operations, associated
agriculture (like cultivation, leveling of lands, sowing of seeds, irriga
of fields, application offertilizers, pesticides/linsecticides, ation
thrashing) are shared by all the family members. Each one of them havestinga
for fewer hours than normal. In
this situation, if some of these worke
are withdrawn, the actual
output will remain the same. It implies kers th.
the marginal productivity of these workers
(being
that
It means their contribution is nil.
withdrawn) is zer
Hence, they are disguised
unemployed.
(2) Seasonal Unemployment: Agriculture is not a full time job for
in rural areas. people
Agriculture in India is based on monsoons. In
some
we have summer rains
(where kharif crops are grown), while in areas
areas we have winter rains other
(where rabi crops are grown). Thus,
on fields is there
only for 5 to 7 months in a year. For the rest of the work
people are jobless in villages, particularly in the year,
post harvest period.
7.3.2 Urban Unemployment
Urban
unemployment is predominantly of the following
(1) Open Unemployment: This types:
category consists of
work (being fit
physically and mentally) and are those, who are able to
prevailing wage rate but do not find any work to do.ready to work at the
seen in rural
well as in urban areas.
as Such people can be
they can be noticed here and there Unlike disguisedly
openly and can easily be counted. unemployed,
(2) Educated
This has
Unemployed:
This is the most serious
form of
dangerous ramifications. It consists of those unemployment.
acquired certain amount of youths, who have
educational
necessary for a job), but confront boards ofqualifications (considered
may form a
part of open employment while 'no vacancy'. Some of them
This should be treated as a others of under
resources of a
colossal loss
nation. In the event
of the employment.
precious productive
of not
qualifications, they are
engulfed in getting jobs suited to their
anti-social activities on the part of trustration. This gets
manifested in
mind is a devil's work shop youths. As there is a
saying 'an empty
(3) Under
Employment: This
employed but are not utilisingcategory includes those
For example if a
their people who are
mental or physical capabilities
person with a medical
iob, starts working as a degree (M.B.B.S), for fully.
conductor in a DTrC bus, want of a
underemployed. Apparently he is
he
employed and earning
will be
termed as
also, but he is
 m p l o m e n 7 1 nl n d i a

king full use of his

not
tmadenied the oppo educational
of the
of 7.5
GDP ofthe opportunity,
-untry as a medical where hequalifications.
could have
In this
situation
doctor by contributed
in treating the to the
13.3
nemployment
Developed
capitalist economies often face Countries
suffering patients.
hrheped

suggests,cycclical down swing wn

phases of business cycles.
onomic activity.unemployment
name

A st h e

in econon is
u tuations

xperienced sucl
USA and associated with
tionnccd such unemployment. Atwestern European nationscyclical
otten C with rising profits and
A m p a n i e dw i t h i times business have
pan led boom, then expanding good, is it is
p e a k ,
it is called

fails find the

begins employments.
the reverse When reaches it
p n a d u c t i o n
to
matchingbuyers. Over phase, when excessive
and profit into losses.
turn production results in
Factories are falling
ces
labourbeg. and unemployment rises. This shut
down down, retrenchment of
our
andmoretilliit culminates into a depression, where ward phase continues more
and bank failures is noticed large scale
due to lack ofunemployment,
investment
ling
funemployment termed by Keynes as involumtary demand. This
was
pe
cted that
Hesuggested that,governments of the affected unemployment.
countries should initiate
ale public works pro8rammes to boost large
scale aggregate demand and push up
investment.

Trchnological unemployment is also found in the developed countries. It is the

eult of change in the techniques of production rendering workers displaced
om the jobs. This temporary kind of unemployment is overcome as workers
et knowledge and training for the new technology.

14 MAGNITUDE OF UNEMPLOYMENT IN LESS DEVELOPED

COUNTRIES

Raj Krishna mentions four criteria to characterise an unemployed/

underemployed person.
) Time Criterion: If a person is gainfully employed for a number of days
as normal
in a or less then the number of days is regarded
year
employment. is less than some
4Income Criterion: If the yearly earnings ofa person
normal minimum income.
in more work, than
Criterion: If a person is ready to putconditions, to which
willingness and
the same terms
at doing at present, on
he is
he has been accustomed. trom
or removed
be withdrawn
(4) Producti
uctivity Criterion:
Ifa person can or
income.
the total output
his present job without affecting
UNEMPLOYMENT/EMPLOYMENT
13
a MEASUREMENT OF TOOL
utilised three
concepts
ot

National Sample Survey

lhe easure
Organisation
(NSSO) has

measurem of unemployment
 Business Environmen
(1) Current Weekly Status (CWS): In
this case, reference periad. nenm
from a year to week. If
persons is not employed even for
a

days preceding to the day when he/she is

one.
reduced
interviewed, thenday durin
termed as unemployed by the weekly status.
helshe in
(2) Current Daily Status (CDS): The Dante committee
of current daily status rates for studying the intensityproposed the
measure each day's (halfa
of work. int
days) status is counted, over one
we can find out the number of week. He
the number of man days they
man-days people are able to work mieHere,
actually work. This difference showsSminu
days wasted or unemployment by daily status. man

(3) Unempolyed by Useal Satus: It refers to a situation when

a
remains without job fora long time in responden
of persons who may be called a year. This refers to the
numbe
chronically
who have work for less than 183 unemployed. In India,
those
se
days in a year (though they may
willing to work for more
days) are considered be.
status. From the above is should
be clear that
unemployed by usual
by usual status is better and more stable unemployment measured
measure of
weekly or daily status. unemployment than
(4) Usual Principal and
Subsidiary Status
incorporating both time criteria and work (UPSS):
It is a new
variety
who were outside UPS, but status. It in includes
had worked for 30 worker
Measurement of labour force in Recent
days or more.

Plans:
(i) Montek Singh Alhuwalia in 2001
(CDS) measure of reported that Current Daily Status
unemployment generally acceptable. It gives
reasonable idea of open
is
unemployment in the country.
(ii) S.P.Gupta Special Group set to
up target Ten Million
in 10th Plan, found that CDS Job Opportunities
measure was most
than any other measure to measure realistic and better
(iii) The Planning Commission has unemployment.
Modified Current Weekly Status proposed yet another measure,
and daily status. A person is deemed(MCWS) by combining weekly
to be in the labour force as
MCWS, ifhe/she is seeking or
reference week. working for 3.5 days or more in per
the

7.6 TRENDS AND STRUCTURE OF

Unemployment is a situation when an able bodied
UNEMPLOYMENT IN INDIA
his living but does not
find a job. person wants to work to earn
Large scale and
has been a
problem of grave and serious concernrapidly
with
rising unemployment
battling since the adoption of planned economic which India has been
the five year plans,
large number job opportunities development
have been
in 1951. During
have always fallen short of the
job-seekers, who entered the created but these
labour market in
 11

equently the back log of unemployed has always been rising

plans.C o
five year plan.
heney. c c e s s i v e

Policy in 1991
EconomicPol brought about a sea change in the Indian
nithe r
Flisation. privatisation and globalisation (LPG) were three
most
1'heN e w Liberalisation,

a momy ments of government policy. These ushered in such changes

instruments c

yortat. boost to the labour intensivestrategy in all production

an a major
sectors. It was expected
whnph

hproted to primary,
rorm and secondary tertiary
trajectory
ities. related

the economy would move to higher growth

strategy that
strategy

Wage
new income and employment opportunities.
th e
ising in national
rise in
m m

were excepted to rise.

workers

of poor increased by 59.9

ineome
to 2004-05 employment (usual status)
a00-2000 slowed
During199

398.0 million to 457.9 million. But, the progress

ans from
a small increase by 1
to 2009-10 period showing
m i l l i o np e r s o n .

hion p2004-05
down during 2004-
2009-10 to 2011-12 adding
up again during
jown uons only. It picked
million p e r s o n s o n l y

perso ns to
to the
t
persons
work force.
million and Unemployed
13.9 Person days Employed
Persons and
Table 7.1: Rate (in percent)
and Unemployment
(in millions)
2011-12
2004-05 2009-10
1999-2000
Method

Employed Current 400.8 415.7

336.9 382.8
Daily Status (CDS) 459.0 472.9
398.0
457.9
Usual Status 28.0
24.7
34.3
26.6 10.8
i) Unemployed 9.8
11.3
(CDS) Usual Status
9.2
14.9
i)Jobs Created 18.0
45.9
Over previous Period 13.9
1.1
59.9
(CDS) Usual Status
5.6
iv) Unemployment Rate 6.6
8.2
7.3 2.2
(in percent) (CDS) 2.0
2.3
2.2
Usual Status
234
Table 7.6 P. in persons.
CDS
urce: Economic Survey 2013-14, employment
measures

+Subsidiary)
aus (Principal usual
Sures employment in person days. employment
on
2004-05,
1999-2000 to million to 457.9
As per the NSsO data, during from 398.0 million
hstatus (US) basis by
increased
59.9
million p e r s o n s from 407.0
million persons employment
againstthe
inst the in labour force by 62.0 2009-10,
0 4690 ncrease in during 2004-05to persons
millions p ersons

to469.0 million. After a slow

erationnATter
adding
13.9
progress
2011-12 force.
to labour
Benerationpicked up during 2009-10

with the
increase
in

workforce, but not keeping pace

 Business Fnvirmn
Some structural changes have been noticed for the first time, Th
primary sector in total employment has dipped from 58.5 percent 20
48.9 percent in 2011-12.
8.5 percent 2004-6 share
Employment in secondary and tertiaru.
increased to 24.3 percent and 26.8 percent
respectively in 2011-12 fe secte
percent and 23.4 percent respectively in 2004-05. Self employment con
to dominate with a 52.2
percent share in total employment though tine
of rural males is slightly better than that of employm
females, long term trends indymen
a slow and
stagnant growth. Such trends require diversification of
liveli
in rural areas from
agriculture to non-agriculture activities. In order to imn noo
generation of productive employment under MGNREGA, the
Intensjve
Participatory Planning Exercise (IPPE) has been initiated to prepare the and
budget for financial year 2015-16 in selected 2,500 backward Lab
participatory rural appraisal technique. Emphasis has been laid onblocks, usin
of productive assets. the creation

Employment growth has been found as poor in rural areas,

females. Table 7.2 shows the status of particularly among
and private over the employment in organised sectors
public
period
2006 to 2012.
One can see from table 7.2 that the
declined over 2006 to 2012 employment organised public sector has
in
by approximately in private sector over the same
period has risen by about 35 percent.
A major
impediment to the pace of quality employment
the small share of generation in India is
manufacturing
NSSO round (2011-12)
in total
employment. However, sixty-eight
indicates a revival in
manufacturing from 11 percent in 2009-10 to 12.6employment growth in
increase of 14.5 percent 2011-12 (an
in
percent
in two
years' time)
The Usual Status (US)
of chronic open unemployment rate is generally regarded the measure as
unemployment, while Current Daily Status
considered comprehensive measure of (CDS) is
and invisible unemployment, including both chronic
unemployment. While unemployment under
around low of 2
a US category hovers
percent (Table 7.1). the number of 11.3 million
to 9.8 million in 2009-10, which again increased to 10.8 during 2004-05
However,based on the CDS, the number of million in
2011-12.
from 34.3 million in 2004-05 to 28.0 unemployment person days declined
million in 2009-10 and
million in 2011-12. Thus,
and invisible there has been asigniticant reductionfurther
in
to 24.7
the chronic
unemployment from 8.2 percent
(Table 7.1). The reason for the decline in in 2004-05 to 5.6 in 2011-12
an unemployment
increasing proportion of young population opts for levels could be that
participating in labour market. This is reflected in the education
rise in the
rather than
growth in higher education from 4.9 million in
1990-91 to 29.6
enrolm en
2012-13 (Economic Survey 2014-15). million inn
inemplormemi nInudia
19
Table 7.2: Employment in Organised Sectors- Public & Private
(L.akh Persons as on 31.3.2012)
By Ser 2006 2007
Sectors
2008 2009 2010 2011 2012
181.9 180.0
Publ
176.7 178.0 178.6 175.5 176.1
87.7 92.4 98.4 102.9
Prvate
107.9 I14.2 19
Male 151.9 149.8
Publ
146.3 147.0 146.7 143.8 144.6
Female 30.0 30.2 30.4 30.9 32.0 31.7 31.5
otor

Male 66.9 69.8 74.0 78.9 90.7

Private 8 86.7
Female 21.2 22.9 24.7 25.0 26.6 27.8 29.0
otor

Sourne: conom Survey 2014-15, Table A-55

CAUSES FOR RISING UNEMPLOYMENT IN INDIA sINCE 1951

7.7

observed that size and rate of unemployment in India has been

1thas been
increasing. plan after plan. Labour force has expanded at a faster rate than thatA
af workforce. This implies a situation of ever increasing unemployment.
to be cited, that can be held responsible for ever
number of causes need
causes are the following:-
inflating baloon of unemployed. Some important
Economic Growth: It is a common belief that there exists
(1) Slow Pace of
co-relation between economic and creation of job
growth
a positive
economic growth has been
opportunities. In India, average annual rate of
60 years since 1951 with severe
in the range of 3.5 to 4.0 percent during
fluctuations at times. In the back drop of rapidly rising
population, this
rate of economic growth has
been too insufficient to absorb expanding
10th Five Year Plan, economic growth
labour force. For few years of the
but this temporary increase in growth
rate picked up to 7 to 9 percent,
rate could not accelerate
the job opportunities.
new phenomenon
mentioned c o m m o n belief, a
Contrary to the above situation
has been emerging in recent years. This is a
i.e. jobless growth accompanied
increase in job opportunities
marked by n o or negative r e a s o n for such a
The most important
with rising GDP of the economy.
of MNCs
to be the fantastic growth
phenomenon, appears achieve higher and
in recent years which
(multinational companies) rather
advancemcnt of technology
benchmarks of growth through
higher opportunities.
through increasing job
than
population has been
Constantly growing
(2) Rapidly Rising Population: labour torce. Thus,
the
to the expanding
the chief factor contributing increasing.
demand for jobs and supply ofjobs, keeps
between the
gap size, leading to rising
causes expansion of family hurdles in the
KIsing population This creates

and affecting savings adversely. as the rising

consumption and employment,
formation, output
speed of capital the growth process.
base, inhibiting
away the
resource
POpulation eats
10
Rusiness nvironm
(3) Too Much Reliance on Agriculture: India is preda.
agricultural country. Agriculture is still the chief occupati
50 percent of population. Agriculture in India is Occupatunderimionndevelantof lneatyopy,
still unde,e
and is carried on traditional lines. In mostparts of the con
65 percent of cultivable area), only one crop is grown (either
or
of Rabi) in a year, depending upon the availability seasonof aKha
bility of seas
called monsoons. Thus, agriculturists have work on
fields on
7 months in a
year. For the rest of the year, they are only for
Overcrowding of agriculture along with persistingjobless/without
joint family
gives rises to disguised unemployment. systen
(4) Gradual Decay of Rural Crafts, Small scale and
During the British period, a systematic and Cottage Indu.
discriminating ind.
policy was practised. Interests of Indian artisans and craftsmen
not only over looked but
crushed decisively. The British Wete
resources and destroyed exploited
indigenous small scale and cottage industri
Such a practice was
responsible for a
especially in rural areas.. Further, thegradual
increase in
net burden of unemployme
on the surplus
already over crowded agriculture sector. Even after workers t
most of these industrial units have been unable independene
competition from large tostand and face the
scale
labour intensive in production units. These
industries at
nature, and have
At this large
juncture, it is important to point outpotentialities of job creation
1991, appears to have made that the Industrial
the life of the these Policya
difficult. industries still mote
5) Old and Orthodox
Education
same education system for moreSystem: We have been following the
than two-third of a
independence, that
the interests of produced babus, only during Britishcenturyto sinc
their masters. rule, set
dynamic and Education system needs to be more
pragmatic capable
force. We need of
producing skilled and efficient labou"
to have an
ever
entrepreneurs, coming out of ourincreasing
schools and
army of
professionals
job to themselves and to colleges, who can pro
on the
others as well. Latest
promotion 'Start-ups' is an emphasis of Narendra Ni
direction. Regular ofand continuous appropriate to initiative
can succeed
that
in vocationalisation of education onl
supplying professionals
employment has not yet been and specialists. It is surpr ising
strategy. made integral
part of plan
(6) Poverty (Low Saving and
mass
Investment):
poverty due to low levels India is
save.
Capital in short
is
of income. characterise
Most people
supply. Problem has been
channelising these resources
are
toer b
to the
areas where
aggravated
the
furiality
potenua
 7.11
l n

mplayment in

m
.ment creation is limited. Large scale investment in large and
en e m p l o )

h e a v y
dustries with very high capital output ratio are unable to create
i n d u s t r

job opportunit unities in the required number. Due to slow growth rate of
the economy was not able to generate suficient
ital formation, th
cap ture to absorb the people searching for jobs.
infrastructur

c t Mobility of Labour: In rural India, joint family system

pert

1mp Rural youths and their parents prefer to lead a life of scarcity
jointly, rathe than move out to towns and cities where they
prevails

d poverty of
earn more and lead better life. Sometimes, differences
a n d ,

a perhaps
and discriminatory attitude towards outsiders prevent
can

customs
in search of jobs. Thus, immobility/
languages,

to faroff
em from moving is also places
them from movi

responsible for large size of unemployment.

lesscmobility of labour
mobility ofl
UNEMPLOYMENT: ECONOMIC AND SOCIAL
EFFECTS OF
EVIL
.8 well at macro level. It is a
tragic at micro as
as
is
unemployment the society and
cate of the individual, a scar on
and suffering for
A
. s
st a t e

tion of misery
onditio.

human
for the nation.
resource

waste of unutilised
colossal the extent man power is
a
capacity. To
o use
use of
( production of output, that
t implies
It
no
n
is deprived of the huge a m o u n t
utilised, the country utilised fully. So it
retards GDP not
ar under been
the m a n power
there, had further growth of
GDP.
could be also hampers
but situation
presents a
only in the present unemployment, it
sufters from disguised with other
When the country and sharing equally
income/output condition
c o n t r i b u t i o n to family income. It is a unique
ofzero the c o n d i t i o n of
the goods and services o r Constant
family members, earning o r
producing. well as per
without
(per capita as
of consuming productivity adversely
decline in f o r m a t i o n is
leads to
upemployment for future capital
generation of surplus
ectare). Thus, poverty
and
oflife. It
means
affected.
affects the quality takes place,
unemployment economic
growth
state of when against
aiy poverty.
Even unemployed

suffering. begets amongst

g Povertydenied. U n r e s t and
frustration development.
n growth
and
social justice gets block the pace of
have-
i c e gets haves and
the system takes a heavy toll and may the society
into
other. Rivalry
for dividing each
m
employment is held
r e s p o n s i b l e
them to
work against
propel
often
nots.Conflict of nterests,

deeper.
andclase hatred go deeper and
A L L E V I A T E

nd class AND
EMPLOYMENT

7.9
G E N E R A T E

TO
PROGRAMM developmental

POVERTY objectives of
i n t e r l i n k e d
with
major
ofthe is closely
Empl oyment
one
been
generation has u n e m p l o y m e n t

planning in India. The pro C

p r o b l e m Of une
of
 7.12
Business Enviro
theeradication of poverty. Various Schemes to reduce unemploymens ironmo
put into practice during the plan period. Some ofthese schemes arveh
below. These programmes included Employment Guarantee Schem
Scheme tor Rural Employment (CSRE) in 1972: Integrated Rural
Deve
Programme (IRDP) and National Rural Employment velopme
Program (NREP
1980; Rural Landless Employment Guarantee Programme (RLEG
Employment for the Educated Unemployed Youth (SEEUY) in 1983.
Rozgar Yojna. for providing employment to rural unemployed initiatedin
(1) Swarnajayanti Gram Swarozgar Yojna (SGSY): This schem.19
launched by the Government of India to provide eme
sustainable inco
poor, living in rural areas of the country, on April 1, 1999. omet
The sce
aims at providing self
employment to villagers through the establish m
of Self-help Groups (SHGs).
Activity clusters are established based
the aptitude and skill
of the people which are nurtured to their maximpa
potential. The SGSY was intended to mum
provide
self-employment
millions of villagers. Poor families living below the
poverty line wen
organized into Self-help Groups (SHGs) with the aim to bring up thes
poor families above the poverty line. The SHGs are divided
into variou
blocks and each of these blocks concentrated on
4-5 key
Government subsidy allocated for SGSY activities
per individual is 30 percent oi
the total capital investment
if the total investment is less then7,50
and 50 percent of the investment
for SC/STs if the investment is
than 10,000. For less
self-help groups (SHGs), the government offers a
subsidy of 50percent if the total investment is less than 1.25 lakhs. Ther
are no
monetary ceilings on subsidy in the case of irrigation
The SGSY concentrates on the projects.
marginalized sections of society.
Accordingly SC/STs comprise 50 percent,women 40 and the
physically challenged up to 3 percent of the totalpercent
beneficiaries
Government funding for the scheme is divided
State in 3:1 ratio.
between the Centre and
Since itsinception in 1999, around 2.25 million SHGs have been set
comprising 3.56 million people. The scheme has also u
million self employed individuals. benefitted 3
The SGSY has now been restructured as the
Mission (NRLM) and has been National Rural Liveliho
renamed again as 'Aajeevika and a
implemented in mission mode across the country since 2011. main
features of Ajeevika are (i) One The m
woman member from each iden"
rural poor household to be
the ultimate
brought undet the SHG network, (i) Ensu
target of 100 percent coverage of BPL families, ining
for capacity (ii) 1ra
fund and capital
building and skill
development, (iv) Ensuring revo volving

subsidy, (v) Financial inclusion,

(vi) Provisiou
 dia

interest subsidy,
. (vii)
(vii)
Backward and
Promoting innovations 7.13
forward
Employment
Task-Force for Employ1
linkages,
TiaForeechairmanship ofGeneration:
and
under the cha
horeonemploymenloyment opportunitiesMontek Planning Commission of
Singh
job opportunities to Alhuwalia set
suggest ways and up
of

a'task
00001. the
100

001 ntaskforce
over a means
period.nExt
suggested the 0llowing of next 10
10 create to

oofgrowth
growth of
of GDP with
of GDP with empha
emphasis tollowing
lowon
years. In y

strategy: (i) Raise the ratJuly

nolicies tobe encouraged in
line with income
segments; (ii) Sectoral
general policies
a)Vulnerable groups rural areasralpolicies
in ofof e
oecial programmes for thes
sp ple and hese
people;
were to be
helped employment
ruralpeople and improve their
to (iv) Suitable policiesbytoinitiating
skills and educate
market in the organised:market sector absorbs(v) To ensure that labour
more
from rural areas.
and more people
t
(B) Bharat NirNirman: This programme, to
provide basic amenities in rural areas, build infrastructure and to
was initiated
2005-06. It comprised six components: (6)
(during UPA-1)
FRTap irrigation potential; (ii) Provide clean Improve rural housing
(iv) construction of all weather rural roads drinking potable water;
to
improve
connectivity:
()Electrification to
light the rural houses
and
(vi) Rural telephone,
to improve communication
amongst different constituents like urban
markets, banks and
godowns/warehouses, etc. Bharat Nirman
programme was expected to provide connectivity to 63,940
habitations. Target was to construct 1,89,897 km of rural
roads and to
upgrade 1,94,130 km of existing roads.
4) Sampoorna Grameen Rozgar Yojna (SGRY): It was announced on
15.8.2001 by Atal Behari Vajpayee and launched by the Government of
ndia to attain the objective of gainful employment for the rural poor
omSeptember 25, 2001. This programme was implemented through
anchayati Raj Institutions. Earlier programmes, named as Employment
Assurance Schem (EAS) and Jawahar Samridhi Yojna (JGSY) were
for women, ot
Cged into SGRY. The scheme had special provisons
withdrawn
scheduled castes, of
scheduled tribes and parents children the
families below
from
rom
hazardous occupations. Preference is given to allocated for
poverty line. A budget of 7 10,000 has been
crore the
The
of food grains.
schem e, which include provision of 50 lakh tonnes
75:25 ratio.
Dvestme States in the
estment is and the
shared between the Centre under
T'he
he employment middlemen are
not permitted
of contractors or
this schanent
this scheme. 1997
of
S) Swarna Jayan (SJSRY):
The
scheme

gainful
has beenJayanti
Yojana
asbee 1 Shahri Rozgar 7, It aims
2009.
at providing

vamped w.e.f., April

 Business Envir
employment to the urban unemployed and underemni onmenm
eneouragng them to set up self employment ventures or crod
create
emplovment opportunities. The annual budgetary provision
by
SISRY for the year 2012-13 is 838 crore and of this 516.77or the
wage
been released up to February 7, 2013. A total of 4,06,947 De crore a
been benefitted from this scheme during 2012-13. have
(6) Mahatma Gandhi MGNREGA: This is a flagship
programme.
central government. It aims at enhancing livelihood
secur
hundredurity
households in rural areas by providing at least one
da
guarantecd wage employment in a financial year, to every houa
whose adult members volunteer to do unskilled
manuanual sehold
work with
stipulation of one third participation
of women. In the
addition to waor
employment,MGNREGA focuses on strengthening wage
management through works that addresses causes of chronic resQ
natural
source
drought, deforestation and soil erosion. Thus, it poverty like
encourages
development. Out of a total outlay of 33,000 crore approved forsustainable
25,894.03 crore been released by 2012-13
about 4.39 crore households January 31, 2013. It is estimated
been provided that
crore
person days. At the national level, the employment for 156.01
MGNREGA had increased from65 in average wage paid under
Wages under MGNREGA are indexed to2006-2007 to 115 in
the consumer 2011-12
agricultural labour (CPI-AL). price index for

Latest Major
Initiatives under MGNREGA
Expansion of the basket
of permissible activities
more meaningful. to make MGNREGA
Electronic fund
in management system (eFMS) in all states
payment of wages. reduce delay
to
Additional employment over and
affected talukas/blocks. above 100 days per
household in drought
Provision for
recording
to prevent leakage. in Aadhaar in the
MGNREGA workers' records
Convergence of the MGNREGA with the
Source: Ministry of Rural Total Sanitation
Development. Campaign (TSC)
7.10 KEY
INTER-STATE COMPARISONS
PERFORMANCE OF
EMPLOYMENT
Rural
unemployment rate per US was the
Madhya Pradesh and as
lowest in
unemployment Rajasthan
rate of 3
in 2011-12
well
Gujarat followe by
as
the 13 per thousand in in 2004-05. The ruie
as
per thousand, all 2011-12 in Gujarat was
in 2011-12 India average. Urban way ber
in
Gujarat was way below the allunemployment at 8 per thousas
sand
India average
age of 34 thousand. thousa
 Inda

harashtra i t h 2 ? 23 per tho

both urban
housand was distant 7 15
vment rate and rural) has
pan t a

second. While
l ) a n

followed
sam lollo fallen
by Bihar, West in 2011 12, in isKerala
hesl Afler

h rural rue"
still the
dsha

had
had high
unemployment.
high urban unemploymeut
Bihar
bihar Bengal
follw
followed
(WB.). Haryana by
ha
1ana

rson n days per household WB, AP and

il
raerage,

Nadu (59 person days)under MGNREGA during

Tamil Nadu(s
a (24 person days) followed by Kerala (57 2013-14 is
hghest
in

ssam
dowest. followed by person days)
ational average« 46 Punjab (33
person days. While the person days)
MGNREGA
underMGNRE
yhyed,
is the
highest in Kerala share of women
(84.1 Percent is the lowest in U.P. (93.4 Percent) followed
mil N a d u
lani
(22.2 percent)
s o r2 4 . 8 p e r c e n t .
Followed
e er all target achievement for the Indira Awas Yojana (IAY) in 2013-14
eraKerala was at the top with (97.7 percent)
followed by Andhra
a s
4 4 p e r c e n .

4P 3Dercent)
iesh (83.3 per and Karnataka (82.6
esnt percent). Punjab had the lowest
vement ith 10.6 percent followed by Himachal
wrcent (Sour Economic Survey 2013-14 pp. 238-239). Pradesh with 17.6
BROAD IMPACT OF JOB CREATION SCHEMES

he specialprogrammes and schemes initiated by the government to generate

selíemployment as well as wage employment in rural and urban areas
imultaneously, over the last few years seem to have succeeded in generating
rger avenues of employment for the unemployed. Notwithstanding a phase
icontinuous and rapid economic development and large number of special
shemes to generate employment, the problem of unemployment continues to
e grave and disturbing. The main reason behind this rising unemployment
nthe face of expanding job opportunities is the mismatch between the rate of
arease in labour force and increase in job opportunities. Again during the
little
irst decade of the present century, employment growth rate was
a more

at the rate of
Mian2percent per annum, while the job seekers grew annually
and that of labour
This gap between growth rate of employment
percent.
rCe implies that the backlog of unemployed will expand.

1.12 CONCLUSION
India. These are
Ihere are three main:aspects of the employment problem in of labour, and
i) the productivity
proportion of labourt population, (ii)
hemployment and under employment o f labour.
uThese
ri n India.
threeLow
aspects
rateare
of

Low rate of
labour in India.
elated there is low rate of participation of Unemployment
in
in India.
employment
nd'a is among women is
striking feature
of poverty.
system Education

mostly tructural and is the main

people for
cause
jobs only, white collar

devoiten
d defective. It has been prepartential for
o
preparing
selfemployme
forself
essential
employment.

vOcational knowledge, so very

7.16 Business Environmen
Therefore, it is essential to control population growth, increase Drod
rease production a
well as productivity, raise the rate of capital tormation, reform the

system, emphasize the role of cottage and small scale industrialucation

labour intensive techniques of production to tackle the problem ofs unitsucatng
ion
of
frictional, structural, technological and disguised unemployment on seasonalwar,
footing. Man power planning is of utmost importace and needs to he d.
continuous basis in a decisive manner. done on

Check Your Progress=

1. Explain the nature and types of unemployment found in India. Review the
special programmes designed to create employment in rural areas.
2. What are the causes of unemployment in What do you understand
the term
India? by
jobless growth? Explain this in
the light of recent experience.
3. Explain nature and extent of urban unemployment. What factors do you
attribute to rural unemployment in India.
4. Discuss the nature, extent and cause
of unemployment in India
the policy of the Briefly review
government to solve this problem.
5. What do
you know about Mahatama Gandhi National
Guarantee Act? Discuss its main features. Rural Employment
How far it has succeeded in
the problem of rural
poor? solving
6. Write short
notes:-
(i) Rural and Urban
(ii) Disguised and Unemployment.
Seasonal
(ii) Structual and Unemployment.
Frictional
(iv) Unemployment.
Concepts of Unemployment:
(v) usual status, weekly status, and
Fducated daily staru
(vi) unemployment
Economic and
and
underemployment.
social effects of
(vii) Swaran
(vii) Sampoorna
Jayanti Shahri Rozgar unemployment.
Grameen Yojna.
(xi) "Task Force on Rozgar Yojna (SGRY)
Unemployment.