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    Employment

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    7 EMPLOYMENT: GROWTH, INFORMALISATION AND OTHER ISSUES LEARNING OBJECTIVES INTRODUCTION BASIC CONCEPTS PARTICIPATION OF PEOPLE IN EMPLOYMENT MEANING OF EMPLOYMENT DISTRIBUTION OF EMPLOYMENT GROWTH AND CHANGING STRUCTURE OF EMPLOYMENT INFORMALISATION OF INDIAN WORKFORCE MEANING OF UNEMPLOYMENT TYPES OF UNEMPLOYMENT IN INDIA CAUSES OF UNEMPLOYMENT REMEDIAL MEASURES FOR UNEMPLOYMENT GOVERNMENT POLICIES AND EMPLOYMENT GENERATION 741 INTRODUCTION Work plays an important role in our lives, as individuals and as members of society. Every rational man aims to get engaged in cettain work to earn a living. Some work on farms, in factories, banks, shops and few others work at home. Work at Home includes not only traditional work like weaving, lace "making or variety of handicrafts, but also modem jobs like programming Workin the IT industry. Earlier factory work meant working in factories located in cities, whereas, now technology has enabled people to Produce those factory-based goods at home in villages. During Covid-19 those’ pe s vices | Many MNCs selifootballsmadein Pandemic, millions of workers delivered their products and se the houses of Jalandhar, Punjab Work from home. ae 'nportant Points about Work bina ‘earning’ a living’. Employment isan activity from which a person earns means wir of livelihood. 7A i Scanned with CamScanner | 72 {nian Economic Developm, nt * Some people get money by inheriting it. However, it does not completely satisfy anybgq Being employed in work gives us.a sense of self-worth and enables us to relate ourselye, meaningfully with others. * Every working person contributes to national income by engaging in various economic activities. * We work not only for ourselves, but also for those who depend on us, like our family, jp Gives us a sense of accomplishment when we work to meet their requirements, * The study of working people gives us insights into the quality and nature of employment in our country and helps in understanding and planning our human resources. * Ithelps in analyzing the contribution made by different industries and sectors towards national income. * Italso helps us to address many social issues such as exploitation of marginalised sections of the society, child labour, ete. 7.2 BASIC CONCEPTS Ce Let us first understand few basic concepts relating to employment, such as worker, labour force and work force. Meaning of Worker A worker is an individual, who is involved in some economic activity, to earn a living. * A worker contributes to the process of gross domestic product (GDP) by rendering his productive activities. * Some examples of workers are: farmers, managers, labourers, doctors, barbers, professors, etc. Gross Domestic Productand Gross NationallProduct: Gross Domestic Product (GDP): GDP refers to total money value ofall goods and services produced in a country ina year. Gross National Product (GNP): When net earnings** are added to GDP, we get GNP. Those activities which contribute to GNP are called economic activities, “Net Eamings: The difference between imports payments and exports receipts is termed as net earnings for the country. Net Earnings can be: * Positive, when receipts from exports are more than payments for imports. * Zero, when receipts from exports are equal to payments for imports. + Negative, when receipts from exports are less than payments for imports. Who all are included in ‘Workers’? It is generally believed that people who are paid by an employer are workers. However, this is not true. Scanned with CamScanner sapnemert Gree itoemaisation end Omer issues 73 + Rakso inchades self-employed persons, like shopkeepers, barbers, cobblers, etc. + Ihalso inclade those people who remain temporarily absent from work due to illness. injury or other physical disability, bad weather, festivals, social or religious functions or cone other reasons. + Italso includes those people who help the main workers. It means, all those who are exgnged in economic activities, in whatever capacity, are workers. so the term workers include all those people, who are engaged in work. whether for others ge pad workers) or for themselves (self-employed workers). Nature of Employment in India is Multifaceted + Some get employment throughout the year, while others get employed for only a few months in a year, like seasonal workers. + Many workers do not get fair wages for their work. « While estimating the number of workers, all those who are engaged in economic activities we included as employed. Namber of Workers + During 2017-18, the total number of workers in India was 471 million persons. Since majority of our people reside in rural areas, the proportion of workforce residing there is higher. So, out of 471 million workers, nearly two-third were rural workers. + Around 77% of total workers are male workers and the rest are female workers. + Rural women participate in larger number in productive activities as compared to urban women. Among the rural workers, the share of female workers is more than one-fourth, wiereas share is around one-fifth in case of urban workers. * In rural areas, many women carry out works like cooking, fetching water and fuel wood and participate in farm labour. They are either not paid wages in cash or are paid in the form of grains. For this reason, these women are not categorised as workers. However, it is often argued that these women should also be called workers. Labour Force Allpersons, who are working (have a job) and though not working, are seeking and are available Sor work, are deemed to be in the labour force. Labour Force = Persons working + Persons seeking andlor available for work. In other words, Labour Force is the total of employed and unemployed persons. How to calculate labour force? : To get the labour force, subtract the following from the total population: (') Unfit People like old or handicapped persons; fi People who are not willing to work; ‘iti) People who are not available for work. a Scanned with CamScanner 7 Indian Economic De must be noted that children below 15 years and old persons above 60 years of age are excluded, ‘abour force. However, in India, poor children have to take up jobs to run their family. from Labour Force Participation Rate (Or Work Force Participation Rate) The ratio of labour force to total population is called Labour Force Participation Rate. It is Used, for analyzing the employment situation of a country. Work Force The number of persons, who are actually employed at a particular time are known as Work Force, It includes all those persons who are actually engaged in productive activities. Work Force thi not include unemployed people, ie. all those people who are willing to work but do not get work are excluded. Work Force = Labour Force - Unemployed People Calculation of Number of Unemployed People With the help of labour force and work force, we can calculate the number of unemployed People. If we subtract work force from labour force, we get number of unemployed people. Number of Unemployed People, i.e. Unemployed People = Labour Force - Work Force Number of Unemployed People f = Humber of Unemployed People Rate of Unemployment Sas Ofer 7.3 PARTICIPATION OF PEOPLE IN EMPLOYMENT “Worker-Population ratio” is an indicator which is used to analyse the employment situation in the country. Worker-Population ratio refers to the ratio of total number of workers to the total population”. It is generally expressed in percentage. 100 Worker Population Ratio _ Total Number of Workers (or Total Work Force) (Or Participation Rate) Total Population “= “Population is defined as the total number of people who reside in a particular locality at a particulat point of time. important Points about Worker-Population Ratio * Worker-Population ratio is very useful in determining the proportion of population that is actively contributing to the production of goods and services of a country. » Higher ratio indicates that high proportion of its Population is involved in economic activities. Medium or lower ratio indicates that less people are involved in economic activities- * The worker-population ratio indicates the status of work ers in the society and their working conditions. Scanned with CamScanner k t Sac ; todetermine quality of employment i, és ia — inan enterprise, it may be possible 3 It also enables us to know the attachy A ment, whi ith his j auhontyposesed by him over hemes ich a worker has with his job and the Table 7.1: Worker-Population Ratio in India (2017-18) sex Worker Population Patio Rural ee ae BU? 53.0 | sa Women 175 ess 165 Save NOERT Ja 35.0 alae With the help of data given in Table 7.1, the following conclusions are drawn: « Participation Rate: For every 100 persons, 34.7% are workers in India. « Higher Proportion of Rural People: In urban areas, the proportion is 33.9%, whereas in rural India, the ratio is about 35.0%. + Employment Opportunities: Rural people have limited resources and participate more in the employment market. On the other hand, urban people have a variety of employment opportunities. They look for the appropriate job to suit their qualifications and skills. + Education Level; In rural areas, many do not go to schools or colleges and even if some go, they discontinue in the middle to join the workforce. In urban areas, a considerable section is able to study in various educational institutions. * Higher Proportion of Male Workers: As compared to females (16.5%), more males (52.1%) are found to be working. Men are able to eam high incomes and, therefore, families discourage female members taking up jobs. * More Women Workers in rural areas: Ratio of women workers in rural areas (17.5%) is more than the women workers in urban areas (14.2%). It happens because people in rural areas cannot stay at home due to their poor economic condition. * Underestimation of Women Workers: The number of women workers in our country are generally underestimated because many activities undertaken by them arenot recognised 4s productive work. For example, many women are actively engaged in activities within the house and at family farms, but are neither pald for such work, nor they are counted 8a worker. Scanned with CamScanner 76 7.4 MEANING OF EMPLOYMENT Employment is an activity which enables a person to earn means of living. I refer, ~ arrangement, by which a person earns income or means of livelihood. Employment my f either in the form of self-employment or wage employment. ea SSS Self-Employment Wage Employment (An arrangement in which worker uses (An arrangement in which a worker sells is own resources to make a ving) his labour and eams wages in return) Regular Workers ; Casual Wohers (Worker engaged by Worker who is casually ‘someone and s paid ‘engaged and gets wages on regular basis) remuneration for work done) Self-Employment Anarrangement in which a worker uses his own resources to makea living, is known as self-employment Workers who own and operate an enterprise to eam their livelihood are knowns self-employed, * About 52.2% of workforce in India belongs to this category (Refer Table 7.2). * Self employment is a major source of livelihood for both men and women. * In case of self-employment, a person makes uses of his own land, labour, capital and entrepreneurship, to make a living. * For example, shopkeepers, traders, businessmen, etc. Wage Employment An arrangement in which a worker sells his Iabour and earns wages in return, is known as wage employment. Under wage employment, worker is known as employee (or hired worket) and buyer of labour is termed as employer. * Workers do not have any other resources (land, capital and entrepreneurship), excep their own labour. * They offer their labour services to others and in return get wages. © For example, a doctor running his own clinic is an example of self-employment. However if the doctor is employed by a hospital then it will be wage employment. © Wage employmentis of two types: (i) Regular Workers; (ii) Casual Workers. Let us now discuss the two types of wage employment. Scanned with CamScanner enpsyment Growth Informalisation and Other Issues 1 pegular Workers (Regular Salaried Employees) is red ivi aserker is engaged Ly someone or by an enterprise and is paid wages ona regular basis, then ‘ech worker is known as regular salaried employee, *~ Workers are hired ona permanent basis provident fund, etc.). « Regular workers account for just 22.8% of India's workforce (Refer Table 7.2)- « Forexample, Professors, Teachers, Civil. engineer working in the construction company, etc. and also get social security benefits (like pension, casual Workers Workers who are casually engaged and, in return, get remuneration for the work done, are termed as casual workers. « Casual workers are not hired on a permanent basis. It means, they do not have: (i) Regular income; (ii) Protection ___ or regulation from the government; (ii) Job security; and | G@iv)Social benefits. | + Casual workers account for 25% of India’s workforce (Refer FE: Table 7.2). Brickemaking: (eases A Ep ot canta ode | Table 7.2: Employment Distribution (2017-18) | Nature of Employment Percent Selt-Employed 52.2 Regular Workers 22.8 Casual Workers 25.0 Total 100.0 | 75 DISTRIBUTION OF EMPLOYMENT __ Distribution of Employment by Gender __ Thegiven figure shows the distribution of employment by gender: Male Workers: Female Workers [Hill] sotemployes TP) casual Workers Regular Salaried Employees Distribution of Employment by Gender Scanned with CamScanner 7: Ingian Economic | Devens, From the Pie diagrams, the following points are noticed: * Self-employment is a major source of livelihood for both men (52%) and women 523, = Cini wore cst foresee fs bo Se ET een i in greater proportion (24%), wh, * Incase of regular salaried employment, men are found in greater p' Swen 1%. Lesser Walsen eo kn pes SESH PETE tng (i) Jobs generally require skills and a higher lev teracy. ii) Lack of mobility among women in India due to social constraints. Distribution of Employment by Region : Distribution of employed workers by region enables us to know the quality of employmeny and the attachment of workers to their jobs. exyaud * Self-Employment: It is a major source of livelihood in rural areas second major source oflivhood in urban areas 28%). In ese of ral ares, slfemployed wien greater as majority of rural people are engaged in farming on their own plots of land. * Casual Workers: In case of rural areas, casual workers account for second major source of employment with 29% of work force. Casual workers in urban areas account for 15%, * Regular Salaried Employees: In urban areas, it is the major source with 47% of work force. Urban people have a variety of employment opportunities because of their educational attainments and skills. in urban areas, the nature of work is different and enterprises require workers ona regular basis. However, only 13% of rural people are engaged as regular salaried employees due to illiteracy and lack of skills. Y HE sot employed TI casuat Workers Regular Salaried Employees Urban Workers Rural Workers x Distribution of Employment by Region Distribution of Employment in Different Sectors In the course of economic development of a country, ees res OF ty Serle I tie pccent troersmgag er ci cee Eventually, ata much ater stage, the industrial sector begins to lose ie shite of oiaTemgloiet: as the service sector enters a period of rapid expansion, a = activities into following 8 different industrial Motes Generally, we divide all economi labour flows from agriculture and othet Scanned with CamScanner | | yr wore! Growth, Informalisation and Other Issues ithe fas RY As eee (ii) Mining and Quarrying “ Manu! (iv) Electricity, Gas and Water Supply construction (vi) Trade ‘i fampor and Storage (viii) Services. gers a he working persons engaged in these divisions can be clubbed into three major sectors: 1, Primary Sector: Itincludes (i) and (ii) i.e. Agriculture and Mining and quarrying. Itincludes (ii), (i 2. Secondary Sertor i), (iv) and (v), ie. Manufacturing, Eh , d water supply and Construction. wufacturing, Electricity, gas and we 19 3, Tertiary Sector: It includes (vi), (vii) and (viii), i.e. Trade, Transport and Storage, and services. the distribution of employment in different sectors is presented in following figure: (Also fefer Table 7:3): 31% [48.5% TEI Fiary Secor [DD secondary Sector (24.8% | eee oon: Distribution of Employment in Different Sectors (2017-18) From the given figure, the following results are drawn: 1. Primary sector is the main source of employment (44.6%), for majority of workers in India. 2. Secondary sector provides employment to only 24.4% of workforce. 3. 31% of workers are engaged in the service sector. Table 7.3: Distribution of Workforce by Industry, 2017-18 (in %) Industrial Category Place of Residence Sex Total Rural Urban Male Female Primary Sector 50.8 66 40.7 57.1 44.6 Secondary Sector 20.4 34.3 26.5 77 24.4 Tetiay/Service Sector 198 59.1 328 25.2 31.0 Total] 100.0 100.0 100.0 100.0 100.0 Ostioution of Rural - Urban Employment in Different Sectors station of Rural-Urban employment in the different sectors is depicted through 73: ~ Scanned with CamScanner 7.40 am 2 Rural Employment 19.8% 59.1% oe] fais Pa] ‘Secondary Secs, Tertiary Sector Distribution of Rural - Urban Employment in Different sectors (2017-18) Employment in Rural Areas wae j 1. 59.8% of the workforce in rural areas are engaged in primary sector (agricultureand ning and quarrying). 2. 20.4% of rural workers are working in secondary sector (manufacturing industris, construction and other divisions). 3. Service sector or Tertiary sector provides employment to 19.8% of rural workers, Employment in Urban Areas 1. In case of urban areas, Primary sector has the least share with just 6.6%. So, activities lle agriculture or mining are not the major source of employment in urban areas, 2. The secondary sector gives employment to about 34.3% of urban workfore 3. People are mainly engaged in the service sector with 59.1% of urban workers. Distribution of Employment (Male-Female) in Different Sectors The share of male-female employment in different sec tors is shown with the help of Percentag: bar diagram, depicted in the following figure (Also Refer Table 7.3): ‘Scale: 1 om=20 Percent 10) es HEI Primary sector & 0 Se (HDI secondary Sector i aa Tertiary Sector 40. 20 ° Male Workers Female Workers ® Distribution of Employment (Male-Female) in Different Sectors (2017-18) Scanned with CamScanner xe Growth, Informalisation and Other Issue. oor Z mM ven figure, the followi 3 pean given BU ‘Owing conclusions are interpreted: pe Employment 7% 1 ulation i: ‘ a7 of male population is concentrated in the primary sector. 1 65% of male workers are engaged in the ‘secondary sector. +, sasice sector provides employment to 32.8% of male workers. pemale Employment i ea) |. Women workers concentration is also very high in the srimary sector. 57.1% of the female workforce is employed in the primary sector, whereas only 40.7% of males work inthat sector. It happens because men get opportunities in both secondary and service sectors. 2 Only 17.7% of female workforce are employed in the secondary sector. 3, The service sector gives employment to 25.2% of female ___ Employment for Women workers. ae ‘ 7.6 GROWTH AND CHANGING STRUCTURE OF EMPLOYMENT Growth of Employment and Gross Domestic Product (GDP) Filty years of planned development have always aimed at expansion of the economy through increase in national product and employment. * During 1950-2010, GDP of India grew positively and was higher than the employment growth. * There was always fluctuation in the growth of GDP, but employment grew at the rate of not more than 2%. * However, in the late 1990s, employment growth started declining and reached the level of growth that India had in the early stages of planning. * During these years, the gap between the growth of GDP and employment was widening. This trend is termed as ‘Jobless Growth’. 1 when the econonty is able to produce more goods and Services without a proportionate increase in employment opportunities, i. economy tends to rise due to technology without any increase in the level of employment. .n there is an overall acceleration in the growth rate ion in employment opportunities. * Jobless Growth refers to a situation * Inother words, it is a situation wher of GDP in the economy without corresponding expans Scanned with CamScanner 9 Gop ..-... Employment —— 87 ‘Annual Average Growth Rate 2 8 8 3 g 2005-2 2010-2012 Growth of Employment and GDP, 1951-2012 (%) Let us now study the changes in the employment pattern of the people in various sector ant {heir status over the last thirty years. It will enable us to understand the types of employme generated in our country. Changing Structure of Employment We know, India is an agrarian nation. A major section of our population lives in ruralaresen 'sdependenton agricultureas their main livelihood. The developmental strategies in manycantis including India, have always aime at reducing the proportion of people depending on ari Let us now understand the effect on different sections of workforce, due to growth pattem! employment and GDP with the help of Table 7.4, Table 7.4: Trends in Employment (Sector-Wise) Sector 1972-73 1993-94 2014-12 2017-18 Primary Sector 74.3 64.0 489 46 ‘Secondary Sector, 10.9 16.0 243 | ona Tertiary Sector 14.8 20.0 26.8 | sia Total 100.0 100.0 100.0 400.0 * * In 1972-73, 74.3% of workforce was engaged in primary sector, which declined 0 # in 2017-18. It shows substantial shift from farm work to non-farm work. ad Scanned with CamScanner qotyrert GU, Rfomalisation and Ore « secondary and service sectors ate as shares of these sectors have in respectively. qtus now discuss the distribution of workers workers. 88 sell-employed, regular salaried employees and casual 743 showi i aoe Promising future for the Indian workforce from 10.9% to 24.4% and from 14.8% to 31% Casualisation of Workforce ‘Over the last three decades (1972-2018), there has been i i ind regular salaried employed to casual wepe wes considerable shift of self-employed from self-employment and regular salaried emplo} casualisation of workforce. yyment to casual wage work is known as Table 7.5: Trends in Employment (Status-Wise) Status 1972-73, 1993-94 2011-12 | 2017-18 Self-Employed 61.4 54.6 52.0 | 52.2 Regular Salaried Employee 15.4 13.6 18.0 | 228 Casual Workers 23.2 318 300 | 80 Total 100.0 100.0 100.0 100.0 * Self-Employment: Although, it continues to be the major employment provider, but its share declined from 61.4% in 1972-73 to 52.2% in 2017-18. + Regular Salaried Employees: There is an increase in share from 15.4% in 1972-73 to 22.8% in 2017-18. * Casual Workers: Their share has increased from 23.2% in 1972-73 to 25% in 2017-18. For ‘Reasons for Increasing Casualisation’, refer Power Booster Section. 7.7 INFORMALISATION OF INDIAN WORKFORCE —__ Since Independence, the main objective of Indian Planning is to raise the standard of living of the people, by providing job and job security. It has been stressed that industrialisation would bring surplus workers from agriculture to industry with better standard of living, * However, even after70 years of planned development, more than halfof Indian workforce depends on agriculture as the major source of livelihood. of employment has also deteriorated. Even after working for * Ov it k bts pen haters ‘vorkers do not get maternity benefit, provident fund, gratuity more than 10-20 years, some’ and pension. * Employees in the private sector get a lower salary a5 comp: Same work in the public sector. ared to employees doing the Scanned with CamScanner 00 Indian Economie Dp * The employment structure in India can be studied with respect to two kinds (0 Formal or Organised Sector; (ii) Informal or Unorganised Sector. Intormalisation of Workforce refers to a situation whereby the proportion of worktoree nt ‘informal sector to total workforce increases. OF secon, Formal or Organised Sector All the public enterprises and private establishments which employ 10 or more hired Workers, are called formal sector establishments. * Workers who work in such establishments are known as formal sector workers, * Formal workers enjoy social security benefits and earn more than those in the informal sector. * The government protects them in various ‘ways through its labour laws and they can form “Trade Unions’ to protect their interests. * However, the organised sector Provides work to just 6% (approx.) of the total work force. For “Reasons for fallin Employment in Organised Sector’, refer Power Booster section, Informal or Unorganised Sector Informal sector includes all those private enterprises which hire less than 10 workers. * Workers who work in such enterprises are known as informal sector workers. For exampie, farmers, agricultural labourers, owners of small enterprises, etc. Italso includes all non-farm casual wage labourers who work for more than one employer such as construction workers and headload workers, In India, around 94% employment is found in the unorganised sector, viz., small farms, household industries, shops and other self-employment units, In the informal sector, male workers account for 70% of the workforce, Workers and enterprises in the informal sector do not get regular income. They do not have any protection or regulation from the government. Such workers have the risk of being dismissed without any compensation. Employment of informal sector workers depend on the nature of market, They are hired when the market conditions are favourable and they are fired when there is slowdownin the economy. For example, during Covid-2019, millions of workers of informal sector lot their jobs. Workers of this sector live in slums and are squatters uninhabited building or unused land). Informal sector uses the outdated technology and do not maintain any accounts. Let us now discuss the distribution of workforce in formal and informal sectors. (persons who unlawfully occupy a Scanned with CamScanner pnt One informaisation and Other lesues penal Sector Workers Vs Informal Sector Workers TAS | Workers who work in Unorganised Sector | are known as Informal Sector Workers. qo Security They are entitled to social security benefits| Th 4 such as provident o ley are not entitled to social secu! eres eae und, gratuity, pension, etc. | benefits, " eee ST sock bs lore ‘of workers in formal | There are no such Labour Laws of workers fed through Labour Laws. | of informal sector. Sd ‘Trade Unions to protect | No such trade unions exist for informal their interests, co sector workers. genings They eam more than the informal sector | They eam less than the informal sector eer workers. guzeinWork | Formal Sector Workers account for just 6% | Informal Sector Workers account for approx to (approx.) of total work force. 94% of total work force. Distribution of Workforce in Formal and Informal Sectors Asthe economy grows, more and more workers should become formal sector workers and the proportion of workers engaged in the informal sector should decrease. However, the situation zlndia is very discouraging (Refer Table 7.6). Table 7.6: Distribution of Workforce in Formal and Informal Sector, 2011-12 Category ‘Number of Workers (in Millions) Male Female Total Formal Sector 24 6 30 irformal Sector 310 193 443 + Formal Vs Informal: Out of total of 473 million workers in the country: > 30 million workers are in the formal sector and the remaining 443 million are employed in the informal sector. 2 Itmeans, only 6% of people are employed in the the informal sector. * Male Vs Female 2 In the formal sector, out of 30 million wor! only 6 million (20%) are women. 2 Inthe informal sector, out of 443 million (70%) and remaining 133 million (30%) are women. formal sector and the rest 94% are in ers, 24 million (80%) are male workers and workers, male workers account for 310 million Realising the Importance of Informal Sector : , employment, India started paying attention to Due to fail in generating a acne oe eee ioenal sector, With the eforts of International Labour Organisation MLO), the inion panna has initiated the modernisation of informal sector enterprises and provision Sfsocial security measures to informal sector workers. Scanned with CamScanner 7:46 7.8 MEANING OF UNEMPLOYMENT Unemployment problem is one of the most serious Laid which is normally found in each and every country of the world, irrespective of its economic development. : The National Statistical Office (Previously it was known as National Sample Survey Organisation) defines Unemployment as.a situation in ‘which all these who, owing to lack of work, are not working but either seck work through employment exchanges, intermediaries, friends or relatives or by making applications to prospective employers or express their willingness or availability for work under the prevailing condition of work and remunerations. In short, Unemployment refers to a situation in which people are willing and able to work at the existing wage rate, but do not get work. Unemployment is confined not only to unskilled workers, rather a sizable number of skilled workers fail tp get jobs for long periods. It must be noted that all those people who are NOT willing to work at the existing wage rates are not considered as unemployed. ‘There area variety of ways by which an unemployed person i identiied. According to some economist, “Unemployed Person is the one winois not able fo get employment of even one hour in half a day’. piel MT ae Mec ee eee ee) * From the point of view of the economy, unemployment means inefficient utlization of human resources, lower production and lower standard of living of people. * Besides reducing the standard of living, unemployment also adversely affects the morale of the worker and undermines his self-confidence. * With prolonged unemployment, the worker may also lose his skills and work habits and may become unemployable. Unemployment is Temporary even in India InIndia, people cannot remain completely unemployed for very long because of their desperate economic condition. Asa result they are forced to accept unpleasant, dangerous jobs in unclean or unhealthy surroundings. Sources of Unemployment Data There are three sources of data on unemployment: 1. Reports of Census of India; 2. National Statistical Office's Reports of Employment and Unemployment Situation; 3. Directorate General of Employment and Training data of Registration with Employment Exchanges. All the three sources of data give different estimates of ‘unemployment. However, they provide us the attributes of the unemployed and the variety of unemployment prevailing in our county: Scanned with CamScanner Growth, Inforalisaton and Other esueg TAT if 1vPES OF UNEMPLOYMENT IN inpia *entunemployment problem in India is eee types of unemployment in our che Structural in nature. Let us discuss some of pisgulsed Unemployment (flers toa state in Steet {Unemployment Open Unemy whikn more people ara are (Reters to unemployment in ‘engaged in work than are ‘occurs at, that Which persons are able and really needed) ah willing to work at prevailing year) ‘wage rate, but fal fo get work) pisguised Unemployment (Hidden Unemployment) iqnised Unemployment is a situation where in the number of workers engaged in a work is pore than actually! optimally required, Itis also known as Hidden Unemployment. + For example, if two workers are needed on a piece of land some mn my and five workers are engaged on the same job, then three {lull workers are disguised unemployed. * It is the most predominant form of unemployment in the agricultural sector of developing countries like India. * Inthe late 1950s, about one-third of agriculture workers in India were disguisedly unemployed. * The main problem of disguised unemployment is that apparently all seem to be employed, but marginal productivity of the surplus labour is zero, ie. contribution of extra workforce is zero. * Causes of Disguised Unemployment: (i) Non-availability of alternative job opportunities outside agriculture compels people to work on family farms, which leads to disguised unemployment. (i) Small Land Holdings with increase in size of family further increases the possibility of disguised unemployment. err : ii) In case of Joint Family, people continue to work on their family land, which further leads to disguised unemployment. Seasonal Unemployment Unemployment that occurs at certain seasons of the year is known as seasonal unemployment, * In India, seasonal unemployment is predominantly associated with agriculture, * Inagriculture, work is seasonal and there are no employment opportunities in the village for all months in the year. So, when there isno work | todo on farms, paen gt fa) urban areas and look for jobs. They come back to their home villages as soon as the rainy season begins, * The period of seasonal unemployment varies from state to zat depending upon the methods of farming, the condition of sol, the type and number of crops grown, etc. t Scanned with CamScanner a Indian Economic ™ ore Deen ee asad Open Unemployment refers to that economic phenomenon in which persons are able and wy, to work at the prevailing wage rate, but fail to get work. Itis called open unemployment such unemployment can be seen and counted in terms of the number of unemployed =e Open Unemployment is different from Disguised Unemployment. In case of ‘unemployment, workers are totally idle. However, in case of disguised unemployment, y otken ‘appear to be working and do not seem to be idling away their time. For “Other Types of Unemployment in India’, refer Power Booster Section. 7.10 CAUSES OF UNEMPLOYMENT a ‘The reason for existence of widespread unemployment in India is not due to any single faci, Itis the cumulative result of many causes. The important causes of the unemployment problem in India are: 1. Slow Rate of Economic Growth: See he Beret The actual growth rate always ‘Population Explosion lies far below the rate targeted ‘ in the five decades of plannin, — Employment opportunities Defective Educational System created under the plans could Slow Growth of Industry notkeep pace with the additions to the labour force. SESE aCe aa 2. Population Explosion: The Fauity Planning rapid rate of population growth Inadequate Employment Planning has been another cause of . increasing unemployment in ‘ow Capital Formation the country. It has not been possible to generate so many employment opportunities to absorb the large growing labour force. } Underdeveloped Agriculture: Heavy pressure of population on land and the primitive methods of agricultural operations are responsible for massive rural unemployment and underemployment in the country. 4. Defective Educational System: The prevailing education system in India is full of defects. The large number of engineering, management and other educational institutes provide ‘numerous engineers, MBAs, etc. But due to lack of technical and vocational training, such eet the requirements of the firm and remain unemployed- Slow Growth of Industry: Due to shortage of capital and lack of modern and advanced technology, industrial sector could not gain its momentum and could not generate sufficient employment opportunities in the country. Decline of Cottage and Small-scale Industries; A. number of traditional village and cottage industries have declined over the years due fo change in the demand preferences ad emergence of more efficient modern industries, Asa result, a large number of people hav? become unemployed. » a s Scanned with CamScanner entre Informaliation and Other Issues - 7:49 ig ent ’ lans were unable igtation of the rural lation i en eal ood tks) peadialce. The ae ee ali Naaohay arsrrony explayment generating programmes lke as Re ey taming Insutiien nt infrastructure facites (power dairies, fisheries and poultry tc) have ae Y pered the expansion of ie Tamera, come roads, te Employment Plannii ‘ Opportunities. 6 apy une. hae has tee has been given to employment objective eye generating mplete absence of any legal provision to implement «. ow Capital Formation: Low rate of capital formati : inthe agricultural and industrial sedi rasrieay3 hampered the growth potentsl the sectors have been affe ddezely. ly, job-creation capabilities of both 7 REMEDIAL MEASURES FOR UNEMPLOYMENT eat oa eam ‘reunemployment problem in India can be solved with the help of following measures: ‘Accelerating Growth Rate of GDP ‘Special Employment Programs Control of Population Growth Improvement of Employment Exchanges Ganson Development of Agricultural Sector Baer Creation of Sett-employment opportunities fiyistiatecity ‘Reform of Educational System & Skill Growth Improvements in Infrastructure Manpower Planning 1 Accelerating growth rate of GDP: The aggregate employment problem can be solved through the process of accelerated growth. Growth rates of GDP between 8% and 9% are needed over the next ten years, to achieve a significant improvement in the employment situation. 2. Control of population growth: The rapid growth rate of population should be slowed down, so that the additional jobs created do not fall short of new entrants to the labour market. Therefore, it is necessary tO adopt an effective ‘and meaningful population control policy, like family planning programmes. : ms 3. Development of agricultural sector: ‘Acceleration of agricultural growth is important to increase labour productivity and quality of employment for large numbers of the existing labour force. There is a need for agricultural revolution through improved techniques, extension of irrigation facilities, reform of land laws, inerease in public investment, etc. .s: The small-scale sector needs to be encouraged 4. Encouragement to small-scale enterprise: sect ; through multiple initiatives like iberal finance, technical training, supply of raw material, infassructural facilities and marketing Of theirproducts are: The infrastructural facilities like health, education, in ve criti tI development of the economy. Better imrigatic ici ds, etc. are critical for overel z sain ad eS enable grielture and industTY sector to produce to their full capacity. This will generate Ore employment: 5. Improvements in Infrastruc’ Scanned with CamScanner >. | 7.20 Indian Econom 6 1B m ‘ams: Special employment programs, which aim at asctnin Lit npr igen) oe be plement 7. Improvement of Employment Exchanges: The employment exchanges Spread i the country are of rf assistance in directing the job seekers to the possible : Sy employment. The functioning of such employment exchanges should be improved, Creation of self-employment opportunities: Government should provide ‘Various like financial assistance, training of skills, supply of inputs, marketing of Prodi generate more self-employment opportunities. Reform of Educational System & Skill Growth: The present system of educational, syst should be made more vocational and work-oriented. Educational facilities should bemoy diversified and a sustained programme of trai ig is necessary, to develop skills am the educated unemployed through special training or apprenticeship courses, Indien Government launched Pradhan Mantri Kaushal Vikas ‘Yojana (PMKVY) or Skill India oy 16% July, 2015 as a skill development initiative scheme for recognition and standardisation of skills. Under this scheme, the trainees are offered a financial reward anda government certification on successful completion of training and assessment, which will help then in securing a job for a better future. 10. Manpower Planning: The future requirements of educated. manpower should be forecasted and accordingly, intake into different professional courses should be determined Asa result, excess manpower in market of educated labour will be eliminated. Letus now discuss the measures taken by the government to overcome the, ‘problem of unemployment Pvt ” facilites cts, ee 2 7.12 GOVERNMENT POLICIES AND EMPLOYMENT GENERATION Government has taken many initiatives to generate acceptable employment, ensuring atleast minimal safety and job satisfaction. For example, Mahatma Gandhi National Raral Employment Guarantee Act (MGNREGA),2005. MGNREGA aims at enhancing te livelihood security of pe in rural areas by guaranteeing 100 days of wage-employment in a financial year to a ural howskll ‘whose adult members volunteer todo unskilled manual work. This schemes one of themany measures, Which the government has implemented to generate employment for those who are inneed of jobs in rural areas. Since independence, the Union and State Governments have played an important role in generating employment or creating opportunities for employment generation. Their efforts can be broadly categorised into two aspects:: * Government provides ‘Direct Employment’ by employing Peoplein various departments for administrative purposes It also runs industries, hotels and transport companies and hence provides employment directly to workers, * With increase in output of goods and services of government enterprises, private enterprises providing raw material to Scanned with CamScanner 721 ise oppottunities in the economy wif] ae mh t. Asa result, the number of employment ‘adirect Employment’ by the government, TE in employment is known as gepioyment Generation Programmes ; thas also implemented a : mmes”, li ener a t ~eration Programmes”, like National Rural Empk ante Act-2005, Prime Minister’ Employment Oe pebsi i * Rozgar Yojana, Swama jyanti Shahi Rozgar Yojana, etc. + Government aims to alleviate poverty employment generation programmes, » All these programmes aim at Providing employ At

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