�🧔🧔 PILLAR#4C: ECONOMIC PLANNING, NITI-PC, UNEMPLOYMENT

Table of Contents
46 �🧔🧔 Economic Planning & Economic Systems ............................................................................771
46.1.1 Closed vs Open Economy ....................................................................................................772
46.1.2 🕹🕹 Capitalism- Great Reset Initiative by W.E.F (�व� आ�थक मं च क� ग्रेट रीसेट पहल)..........772
46.2 �🧔🧔 Economic Planning: आ�थक योजना................................................................................773
46.2.1 📚📚 Types of Economic Planning (आ�थक योजना के प्रकार) ...............................................773
46.2.2 � 📚📚 Economy Planning → Before Independence: ...............................................774
46.3 � 📚📚 Economy Planning → After Independence ..........................................................775
46.4 �📚📚 Planning Commission → Five Year plans ..............................................................776
46.5 👳👳👎👎Planning Commission: Limitations / Shortcomings ...............................................778
46.6 �🧔🧔 Planning Commission vs Niti Aayog: Structure .....................................................780
46.7 �🧔🧔 Planning Commission vs Niti Aayog: Functions ....................................................781
46.8 🧔🧔 NITI → Notable initiatives / how different from PC? .................................................782
46.9 🕵🕵 🧔🧔 Economy Planning → PM-EAC?.............................................................................784
46.9.1 🤳🤳 Economy Planning → PRAGATI? ........................................................................784
46.10 ➗📊📊 🕵🕵 📈📈 [Yearbook] MOSPI, NSSO, CSO, NSO ......................................................786
46.11 ➗📊📊 🕵🕵📈📈 National Statistical Commission (रा��ीय सां��क� आयोग) ...............................787
46.11.1 ➗📊📊📊📊 Mahalanobis National Award for Statistics ..............................................788
46.11.2 ➗📊📊⚖ Collection of Statistics Act, 2008 ................................................................788
47 � Pillar#4C: Indicators → Unemployment................................................................................789
47.1.1 🕵🕵🕵🕵🕵🕵International Labour Organization (ILO: अंतररा�ी� य श्रम सं गठन) .......................789
47.1.2 👷👷👷👷Occupational of Indian Workers- as per ES22 (number in Crores)..................789
47.2 � Unemployment → Involuntary → Types .....................................................................789
47.2.1 � Unemployment Major Reasons: (बेरोजगारी के प्रमुख कारण) ............................................790
47.3 �📊📊 Unemployment → NSO Survey Types .....................................................................791
47.4 �📊📊 UNEMPLYOMENT: Periodic Labour Force Survey (PLFS) .....................................792
47.4.1 📊📊 � Indicators → unemployment rate (UR: बेरोज़गारी दर) .........................................792
47.4.2 👷👷/( 👷👷 �) Indicators → Worker Population Ratio (WPR) ....................................793
47.5 👷👷/( 👼👼👼👼👴👴) Indicators → Labour Force Participation Rate (LFPR) ......................793
47.5.1 �⏬⏬Why FEMALE LFPR Declined between 2004 to 2018? ...............................794
47.6 👷👷� Workers Types by NSO ................................................................................................795
47.6.1 👷👷� Worker Types → Census-2011 classification of workers ..................................796
47.6.2 👷👷🧱🧱🧱🧱 Worker Types → Unorganized sector ...........................................................796
47.6.3 👷👷⏳ Worker Types → Informal worker (अयथाव�ध/अनौपचा�रक मजदू र) ...........................798

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 47.6.4 👷👷 🖱🖱 Worker Types → Unorganized workers → E-Shram Portal for them (2021-
Aug) 799
47.6.5 👷👷👷👷👷👷 Worker Types → Gig workers & Two sided market - ES21 ........................799
47.6.6 👷👷👷👷👷👷 NITI Report on Gig Workers ............................................................................800
47.6.7 👷👷👷👷👷👷 How to create more jobs? ..................................................................................801
47.7 ✍🎺🎺 Mock Questions for Mains → NITI PC Unemployment.........................................801

46 �🧔🧔 ECONOMIC PLANNING & ECONOMIC SYSTEMS

Economic System Capitalism Mixed Economies Socialism

आ�थक प्रणाली → पूंजीवाद �म�श्रत अथर्�व�ाएँ समाजवाद
Ownership of the Pvt. Sector Few industries reserved Public Sector / Govt /
industries? �नजी �ेत्र for public sector, Collective ownership.
उद्योगों का मा�लक कौन remaining by Pvt. sector. No ‘pvt’ property.

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 Economic System Capitalism Mixed Economies Socialism
आ�थक प्रणाली → पूंजीवाद �म�श्रत अथर्�व�ाएँ समाजवाद
What goods and ‘Free Market - Essential Govt. will decide
services should we Economy’: Let the goods/services by what must be
produce? More market forces of Public Sector produced & in how
books or more supply & demand - Others by Pvt sector. much quantity.
bikes? decide it.
During production Whichever mode of In public sector Preference for labour
shd we use more production is more industries- govt will intensive modes of
labour or more cheaper. decide. In pvt sector- production.
capital (machines)? entrepreneur will decide.
Only the consumers - For essential goods Govt to decide who
How to who can afford them, and services → needs how much, and
sell/distribute those can purchase them. If a government may fix will distribute
goods and services sick man cannot afford the prices e.g. NPPA- accordingly, using
among people? medicine, it is not Stent. subsidy / rationing
�वतरण प्रणाली govt’s problem. - For others → market shops.
forces will decide.
⇒ Presently, most nations are ‘Mixed Economic System’ including USA and India. While China
officially claims to be ‘Socialist’ but, in practice, they too have become a Mixed Economy. (वतर्मान
समय म� �ादातर देश को ‘�मश्र’ अथर्तंत्र ही है- चीन ने भी ख़ुद के समाजवादी होने का िदखावा करता है, िकंतु ‘�मश्र’ है।)
- The socialist economic system stopped in most nations after the collapse of USSR, except a
handful of outliers like North Korea, Cuba & Venezuela.
- Communism is a branch of socialism, (usually) run by a totalitarian government made up of one
and only one party. (सा�वाद- समाजवाद क� एक उपशाखा है जहाँ सामा� �प से एक तानाशाह सरकार होती है.)

46.1.1 🚪🚪Closed vs Open Economy

Closed economy (बं द अथर्�व�ा) Open Economy (खुली अथर्�व�ा)
A country that does not have any import-export an economy that is not a closed economy.
/ economic relations with rest of the world

46.1.2 🕹🕹 Capitalism- Great Reset Initiative by W.E.F (�व� आ�थक मं च क� ग्रेट रीसेट पहल)
⇒ by World Economic Forum founder Klaus Schwab
⇒ Capitalism & its business models need to be "reset", to build a new social contract that honours
the dignity and equality of every human- in health, finance, energy and education. (पूंजीवाद और
उसके �बजनेस मॉडल को रीसेट/पुनः शु�आत करना- इस प्रकार के सामा�जक अनुबंध बने, जहां हर इं सान क� ग�रमा और समानता का
�ाल रखा जाए-�ा�,�व�, ऊजार्, और �श�ा म�। �ोंिक वतर्मान पूंजीवाद भी गरीबों का शोषण ब�त हो रहा है)
⇒ Corona’s impact on poor people → has revived this debate again. (कोरोना म� इसक� ज़�रत महसूस �ई)

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🔠🔠❓MCQ. Find correct statements about Vietnam: (Prelims-2022)
1) Vietnam has been one of the fastest growing economies in the world in the recent years. (हाल के
वष� म� तेज़ी से वृ�द्ध करने वाले अथर्तंत्र म� से एक है �वयतनाम.)
2) Vietnam is led by a multi-party political system. (ब�प�ीय राजनी�तक �व�ा �वयतनाम म� है)
3) Vietnam’s economic growth is linked to its integration with global supply chains and focus on
exports. (वै��क आपू�त �ं खला म� एक�कृ त होने के चलते और �नयार्त पर �ान देने के चलते �वयतनाम क� आ�थक वृ�द्ध �ई है)
4) For a long time Vietnam’s low labour costs and stable exchange rates have attracted global
manufacturers. (स�े मज़दू र और ��र �व�नमय दर के चलते �वदेशी उ�ादक �वयतनाम म� आक�षत होते ह�)
5) Vietnam has the most productive e-service sector in the Indo-Pacific region. (सबसे �ादा उ�ादक ई
सेवा �ेत्र पूरे िह� प्रशांत इलाक़े म�)
Codes: (a) 2 and 4 (b) 3 and 5 (c) 1, 3 and 4 (d) 1 and 2

46.2 �🧔🧔 ECONOMIC PLANNING: आ�थक योजना

Definition? It is the process through which Govt. prepares a list of socio-economic problems e.g.
mass poverty, inequality, low productivity in agriculture, lack of industrial and infrastructural
development etc.; and then Govt. sets goals / targets / plans to fix these problems. यह प्रिक्रया है �जसके
मा�म से सरकार सामा�जक-आ�थक सम�ाओं क� सूची तैयार करता है उदा। बड़े पैमाने पर गरीबी, असमानता, कृ �ष म� कम उ�ादकता,
औद्यो�गक और बु�नयादी ढांचागत �वकास क� कमी आिद; और उसे ठीक करने के �लए ल� / ल� / योजना �नधार्�रत करती है

46.2.1 📚📚 Types of Economic Planning (आ�थक योजना के प्रकार)

⇒ Totalitarian planning (in USSR, N.Korea) vs Democratic planning (India). सवर्स�ा�क vs लोकतां�त्रक

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⇒ Centralized (in USSR, N.Korea) Vs Decentralized (India- after 73rd and 74th Amendments)
के �ीकृ त vs �वक� द्रीकृ त
Planning by Inducement (प्रलोभन द्वारा) by Direction (�दशा�नद�शन)
People are induced to act in a certain way through monetary Central authority gives
policy and fiscal policy predetermined targets
Indicative Planning (सूचक) Imperative (आदेशा�क)
⇒ Started in France by Monnet plan ⇒ State & Public sector
⇒ Found in mixed economies companies have complete
⇒ Government prepares an outline of plan after consulting control over resources.
with public and private sector. They are given funds, ⇒ No private sector involved.
incentives, subsidies, tax breaks to maximize production, ⇒ No consumer sovereignty.
income & employment ⇒ Imperative planning
⇒ Government does not force the private sector but just procedure is strict and
indicates the areas of cooperation and targets to be fulfilled. rigid. E.g. USSR, N Korea
⇒ Indicative planning procedure is soft and flexible. E.g.
India, France
Financial planning (�व�ीय आयोजन बनाम भौ�तक आयोजन) Physical planning
technique of planning in which resources are allocated in terms allocation of resources in terms
of money (योजना बनाने क� ऐसी तकनीक जहाँ सं साधनों का आवं टन मुद्रा के �प म�) of men, materials and
machinery

Table 1: Types of Planning based on timeframe

Planning → Operational Tactical Strategic/Perspective
Timeframe → Short upto 1 year Medium: 3 to 7 years Long: 10 years or more

46.2.2 � 📚📚 Economy Planning → Before Independence:

1909 Gandhi’s book Hind-Swaraj (1909) he opposed industries and machines. Advocated
people should minimize their wants, care for mother nature, become self-reliant, small
scale production using khadi, village and cottage industries. (गांधीजी ने उद्योग और मशीनीकरण का
�वरोध िकया. ज़�रत� कम करो, �-�नभर्र बनो, खादी ग्रामीण और कु टीर उद्योग को प्रो�ाहन दो)
1934 M. Visvesvaraya’s book “The planned economy of India”, containing a 10 years plan. He
was an Engineer, Ex-Diwan of Mysore and Bharat Ratna recipient.
1938 Nehru’s Congress plan advocated setting up “National Planning Commission”.
But not implemented due to World War 2.
1944 15 years’ Bombay Plan for investment, by 8 noted industrialists JRD Tata, GD Birla et al.
1944 Sriman Narayan Agrawal’s Gandhian plan- focusing agricultural and rural economy

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 1945 MN Roy’s People’s Plan– with socialist leanings. He advocated distribution of resources
by the state only, and mechanization of agricultural production.
1950 Jayprakash Narayan’s Sarvodaya Plan based on Vinoba’s philosophy focused on
agriculture, small and cottage industries.

🔠🔠❓ MCQ. Find wrong statement about Gandhian approach to development? (Geologist-2020)
a) Voluntary limitation of wants b) Development of self-sufficient village community
c) Achieve balance between man and nature d) Industrialization & private participation

46.3 � 📚📚 ECONOMY PLANNING → AFTER INDEPENDENCE

1950, Inspired from the USSR / Soviet Model, PM Nehru established a Planning Commission
Mar. (सो�वयत सं घ से प्रभा�वत होकर प्रधानमं त्री नेह� ने योजना आयोग क� �ापना क� थी)
1951 From 1st April, the first FYP starts. (पहली पं चवष�य योजना शु� होती है)
1952 National Development Council (NDC: रा��ीय �वकास प�रषद) of PM, CM etc. to approve the
Five-Year Plans: पं चवष�य योजनाएँ drafted by Planning Commission.
2014 Modi shuts down Planning Commission. (प्रधानमं त्री मोदी ने योजना आयोग को बं द करवा िदया)
2015, Modi notified the formation of Niti Aayog: National Institution for Transforming India,
Jan to replace the Planning Commission. (और उसक� जगह नी�त आयोग क� �ापना क�)
PC, NDC and NITI were / are neither Constitutional nor Statutory bodies. (सं वैधा�नक/वैधा�नक सं �ा नहीं)

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46.4 �📚📚 PLANNING COMMISSION → FIVE YEAR PLANS

✋Following table is more relevant for CDS, SSC & StatePCS than for UPSC-CSE.
Plan Period Theme/Model/Target
1st 51-56 ➢ Harrod Domar Model
➢ Main focus: Agriculture, irrigation and power.
➢ Successful: Got more GDP growth than its original target.
2nd 56-61 ➢ P.C. Mahalanobis model. He was Chief Statistician of India.
➢ Socialist pattern/model of society,
➢ Rapid industrialization, heavy industries.
➢ Successful: Achieved the GDP growth target.
3rd 61-66 ➢ Sukhmoy Chakraborty and John Sandy Model
➢ Also called “Gadgil Yojana”: to make the economy independent
➢ #EPICFAIL due to droughts and wars with Pak-China
Holidays 66-69  Plan Holiday declared thanks to #EPICFAIL of 3rd FYP.
 During this period, annual plans were made.
4th 69-74 ➢ Ashok Rudra and Alon Manney Model.
➢ growth with stability and self-reliance.
➢ Indira gave ‘Garibi Hatao’ slogan in 1971 election campaign
➢ #EPICFAIL due to Bangladeshi refugee problem and drought.
5th 74-79 ➢ C.Subramaniam and later redrafting by D.P.Dhar
➢ Focus: agriculture > Industry & Mines

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 Plan Period Theme/Model/Target
➢ Originally it was a 10 year long term perspective plan with focus on
poverty removal and self-reliance
➢ While it achieved the targets but terminated in 1978 as Morarji Desai
became PM.
Rolling 78-80 Morarji Desai’s Janta government: “we’ll measure progress every year and
Plan make new plans accordingly for next year.”
6th 80-85 ➢ Poverty removal, IRDP, NREM, TRYSEM schemes etc.
7th 85-90 ➢ Pranab Mukherjee Model Focus on employment.
➢ For the first time, due to the pressure from private sector the private
sector got the priority over public sector
2 annual 90-92 Political instability at Centre. So, only 2 annual plans:
plans (i) 1990-91 & (ii) 1991-92.
8th 92-97 ➢ John W.Miller Model.
➢ PM PV Narasimha Rao- LPG reforms, New Economic Policy
➢ Top priority to human resources i.e. employment, education and
public health.
➢ Successful: Got more GDP growth than its original target.
➢ Fiscal deficit also ⏬but that was done by manipulation, using extra
budgetary resources (EBR) which we saw in Pillar#2
9th 97-02 ➢ Growth with social justice and equity. Mostly “indicative” planning.
➢ identified 7 Basic Minimum Services (BMS) like health, education,
nutrition, roads & gave more ₹₹ for that.
➢ #EPICFAIL due to global slowdown after Asian Financial Crisis
(which we learned in Pillar#3 currency convertibility).
10th 02-07 Target 8% GDP growth rate, double per capita income in 10 years, reduce
poverty to 15% etc. But failed to achieve targets.
11th 07-12 ➢ Theme: “Towards Fast and more Inclusive Growth”
➢ C.Rangarajan framed it with targets: GDP 9% growth rate, 70 million
new jobs, lower IMR, CMR, TFR etc.
➢ But due to US-subprime crisis, failed to achieve targets.
12th 12-17 ➢ Theme: Faster, More Inclusive & Sustainable Growth
Ended on ➢ Target growth: 9% GDP, 4% Agriculture, 10% Mfg. but due to
31/3/201 continued global economic slowdown, most targets not achieved.
7
➢ 10% reduction in poverty, create 50 million new jobs.
➢ Get IMR:26, MMR:1000,Child Sex ratio: 950, TFR: 2.1
➢ Increase mean school years, forest cover, infrastructure investment,
rural tele-density.

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🔠🔠❓ MCQ. Which of the following Five Year Plans emphasized the need for establishing a
“Socialist Pattern of Society” in India? (UPSC-Geologist-2020)
A) 2nd Five year Plan B) 3rd Five Year Plan C) 4th Five Year Plan D) 5th Five Year Plan

🔠🔠❓MCQ. The main objective of the 12th Five-Year Plan is (Asked in UPSC-Pre-2014)
(a) inclusive growth and poverty reduction (b) inclusive growth and sustainable growth
(c) sustainable and inclusive growth to reduce unemployment
(d) faster, sustainable and more inclusive growth

🔠🔠❓MCQ. Arrange the following events in sequential order as they happened in India:
1. Mahalanobis Model 2. Plan Holiday 3. Rolling Plan. (Asked in CDS-II-2017)
Answer Codes: (a) 1, 2, 3 (b) 3, 2, 1 (c) 2, 3, 1 (d) 1, 3, 2

🔠🔠❓MCQ. Find correct statement(s) about India’s Five Year Plans (Pre-2019):
1. From the 2nd Five-Year Plan, there was a determined thrust towards substitution of basic and
capital good industries.
2. The 4th Five-Year Plan adopted the objective of correcting the earlier trend of increased
concentration of wealth and economic power.
3. In the 5th FYP, for the first time, the financial sector was included as an integral part of the Plan.
Codes: (a) 1 and 2 only (b) 2 only (c) 3 only (d) 1,2 and 3

46.5 👳👳👎👎PLANNING COMMISSION: LIMITATIONS / SHORTCOMINGS

1) Achieved ~9% GDP growth-rate during 2005-07, thanks to American boom prior to Subprime
crisis. But almost all nations including Pakistan had experienced high growth in that era. So 9%
GDP did not come from PC’s magic wand. (अमे�रक� मं दी से पहले सभी देशों म� आ�थक वृ�द्ध �ई थी. ये कोई योजना
आयोग क� जादू क� छड़ी नहीं थी. पािक�ान म� भी आ�थक वृ�द्ध �ई थी उस ज़माने)
2) Post-Subprime crisis: GDP-fell while food-inflation &NPA rose during 2008-13. PC couldn’t fix
it. सब-प्राइम सं कट प�ात �वकास दर बढ़ा नहीं पाया, महंगाई कम नहीं कर पाया.
3) PC was a toothless body, couldn’t punish any government organizations if targets failed.
4) Failed to implement land reforms, labour laws. भू�म-सुधार और श्रम-कानून सुधार मे �वफल
5) PC designed Government schemes with ‘One Size Fits’ all approach and a few extra crores to
NE/J&K/Hill-states and LWE-affected states. But for long, PC did not use pilot projects / sample
testing / interaction with states. So, Indira Awas Yojana (IAY), ICDS-child development scheme
etc. programs failed to show tangible result despite pumping crores of rupees over the decades.
दशको तक करोड़ो �पए देने के बाद भी क�ीर, न�ल प्रभा�वत रा�ो और पूव��र रा�ो मे कोई ठोस सुधार नही देखने �मलते

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6) PC tried to bypass State Govts by designing schemes that directly funded ₹ ₹ to NGO & private
agencies. So, non-Congress states became unenthusiastic about implementing Central Schemes.
(रा� सरकारों को नज़रअंदाज़ कर योजना आयोग सीधा ही �नजी �ेत्र के समाजसेवी सं गठनों को पैसा देता इस�लए रा� सरकार�
क� द्रीय योजना अपने इलाक़े म� चलाने के बारे म� �ादा उ�ािहत नहीं रहती थी)
7) Only in 2013, PC attempted to undo its mistakes by reducing number of Centrally sponsored
schemes (CSS), Performance based funding to States etc. But it was too little, too late.
8) PC’s shortcomings resulted in creation of new bodies like PM’s Project Monitoring Group, PM’s
Economic Advisory Council (PM-EAC), Group of Ministers (GoM) committees etc. → more
lack of coordination. So, Modi felt PC is a hopeless mess beyond repairs & replaced it with NITI
Ayog. योजना आयोग क� नाका�मयो ने अ� सं �ाओ को ज� िदया अंतत: आपस मे सं कलन मु��ल होने लगा।

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46.6 �🧔🧔 PLANNING COMMISSION VS NITI AAYOG: STRUCTURE

Position �Planning Commission 🧔🧔 NITI Aayog

Born: 15/3/1950 National Institution for Transforming India was
Born
Dissolved: 13/8/2014 born on 1/1/2015
Chairman Prime Minister same
He enjoys ‘Cabinet Minister’ rank
Vice Last Dy.Chairman was
1. Dr. Arvind Panagariya (2015-17, resigned)
Chairman Montek Singh Ahluwalia
2. Dr. Rajiv Kumar (2017-22, resigned)
उपा�� (Cabinet minister Rank).
3. Dr. Suman K Bery (2022- Current)
A Secretary level bureaucrat with fixed tenure.
CEO Member-Secretary (IAS)
Presently, Parameswaran Iyer (IAS)
Ex-officio
1. Finance Minister PM will nominate Max 4 Union ministers. Presently,
members
2. Planning minister Minister for- Home, Defense, Finance, Agriculture
(पदेन सद�)
Full time
4-7 full time members, 1. Dr. Ramesh Chand (Economist)
members
who enjoyed “Minister of
(पूणर्का�लक 2. Dr. V.K. Saraswat (Technocrat, missile scientist
State” rank.
सद�) and Ex-DRDO chief.)
(क� द्र के रा� क�ा के मं त्री का पद)

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 Position �Planning Commission 🧔🧔 NITI Aayog
3. Dr. Vinod Kumar Paul (Pediatrician, Public
Health Expert)
They enjoy Minister of State rank in warrant of
precedence, but salary = Secretary rank (IAS)
- Union ministers for Transport, Social Justice,
Special MSME, Textiles, Women-Child, HRD,
Invitees commerce, statistics, planning.(these ministers
N/A
(�वशेष�प से are sometimes added/removed. List keeps
आमं �त्रत ���) changing dynamically)
- PM can invite other experts as and when needed.
Part-time Tech experts from research institutes. Currently
(अंशका�लक सद�) N/A
members none declared as of 2020-Jan.
− Chairman: Prime minister
− CM of all states incl. Delhi, Puducherry
National Development
Governing − Lieutenant governors of UT.
Council (NDC: रा��ीय �वकास
Council − 😰😰Although cooperative federalism spirit
प�रषद) with PM, CM etc.
missing, West Bengal, Telangana and Punjab
boycotted meeting in June 2019
Ad hoc (तदथर्) CMs & Lt.Govs of states/UTs that fall in the region.
Regional N/A They’ll be dealing with specific issue affected them
Councils e.g. irrigation, Naxal-problem, infrastructure etc.
** Nominated ministers keeps on changing. Earlier, Railway minister and Minister of state for
planning, were in it. Now only 1) Defense 2) Home 3) Finance 4) Agri
** There is discrepancy between the theory given in Govt’s India 2020 (yearbook) which says ‘Full
time and part-time members will be maximum of 2” vs real life composition from
niti.gov.in/content/overview where fulltime members = 3. I’ve kept NITI webpage as reference.

46.7 �🧔🧔 PLANNING COMMISSION VS NITI AAYOG: FUNCTIONS

While Finance commission (a constitutional body under Art.280) is responsible for the tax-
devolution from Union to states, these two non-constitutional bodies look/looked after →
👳👳 Planning Commission 🧔🧔 NITI Aayog
Prepared the Five-Year Plans of India It’s given responsibility to draft
पं चवष�य योजना बनाना ✓ Three Year Action Agenda (2017-20).
✓ Seven Year Strategy Document.
✓ Fifteen Year Vision Document (2017-32).
2018: drafted Strategy for New India @ 75 covering
the period 2017 to 2022-23.##

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 👳👳 Planning Commission
1. How much money should union give to
each state for implementation of
centrally sponsored schemes (CSS)?
2. How much money should union give to
the five year plans of the state
governments?
🧔🧔 NITI Aayog
NITI doesn’t decide how much money should be
given to each state. That component is decided by
the Finance Commission (tax devolution and
grants) and Finance Ministry (Allocations for
schemes).
1. NITI primarily serves as the think tank, helps

PC would answer these questions using in policy design.

Gadgil Mukherjee formula (designed in 2. Helps in monitoring schemes’ implementation
8TH FYP)- based on population, per capita through its dashboard e.g. ‘School Education
income, special problems etc. of a state. Quality Index’, ‘SDG India Index’, ‘Digital
Transformation Index’ etc.
�FAQ: ##“Do I’ve to read Niti’s report India@75- as recommended by some toppers? Ans. No
Need, because Its important points already embedded in this handout, particularly in Pillar4D: GDP.
46.8 🧔🧔 NITI → NOTABLE INITIATIVES / HOW DIFFERENT FROM PC?

Darpan 2017 onwards: NGO (Non-Governmental Organization) register here, get unique
Portal id → apply for grants under various govt schemes. नी�त आयोग के इस वेब पोटर्ल पर
पं जीकरण करने के बाद ही ग़ैर सरकारी सं गठन सरकारी योजनाओं म� जुड़ सकते ह�

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Aspirational - 2018 onwards: to rapidly transform 115 backward districts on 49 key
District performance indicators (KPIs :मु� �न�ादन सं केतक) related to Health, Nutrition,
Programme Education, Agriculture, Water Resources, Financial Inclusion, Skill
Development, Infrastructure etc.
आकां�ा�क
- progress monitored in NITI online portal called ‘Champions of Change’
�जला कायर्क्रम
Strategic - NITI Aayog suggested strategic disinvestment of 30+ sick / loss making
disinvestment CPSEs such as Air India, Pawan Hans Helicopter, Scooters India etc.
रणनी�तक�व�नवेश (PC wouldn’t have done this because of their Nehruvian mindset.)
POSHAN - Ministry of Women and Child Development (MWCD) is implementing
Abhiyaan POSHAN Abhiyaan to make India malnutrition free India by 2022 with focus
कु पोषण �नवारण के on pregnant women, mothers and children. (More in Pillar#6)
�लए - NITI Vice-Chairman is the head of POSHAN Abhiyaan’s National Council.
(Planning Commission’s focus would had been Food-calorie security through
cheap wheat /grain only, whereas Nutritional Security is bigger.)
Bills and Since its inception Niti Aayog has
policies - Helped framing various policies on Energy, Mineral etc.
कानूनों के �नमार्ण म� - Helped framing various bills, Model Acts on Agricultural Land Leasing,
सलाह Livestock Selling etc.
🌽🌽 NITI helped revamping the MSP by suggesting price deficiency payments (under
Agriculture PM-AASHA), & revamping fertilizer subsidies through DBT mechanism to
कृ �ष �ेत्र fertilizer companies. (Ref: Pill#4: Agro Handout)
SDG For Sustainable Development Goals (सतत �वकास ल�)
(More in - NITI developed SDG India Index to monitor our progress in 17 SDG goals
📑📑Pillar#6) - NITI suggested Govt. to focus on methanol / biofuel based economy for
reducing the fuel bill by around 30% by 2030.
GIRG Niti Aayog Global Indices to Drive Reforms and Growth (GIRG) dashboard to
Dashboard monitor India’s performance on various global socio-economic parameters in
(सामा�जक आ�थक such as Multidimensional poverty index of United Nations Development
�वकास के आंकड़े) Program (UNDP-सं यु� रा�� �वकास कायर्क्रम का ब�आयामी गरीबी सूचकांक). (📑📑Ref: Pill#6)
📯📯 CSS NITI helped developing Output Outcome Monitoring Framework to monitor the
क� द्र द्वारा प्रायो�जत implementation of Govt schemes. PC simply launched schemes after schemes,
योजनाएं without much attention to performance monitoring.
Seminars NITI regularly organizes seminars, workshops, conferences for idea exchange
with industries and academicians. PC was ‘closed / introvert body’ (अंतमुर्खी) in
terms of interaction with others.

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 Startups - NITI runs Atal Innovation Mission (AIM) →grant of upto ₹ 10 crores to
setup Atal Incubation Centres incubators. → AIM also started “Mentor
India” program, wherein experts from industry provide mentorship to
students in Atal incubator labs.
- SETU to help startups.(More in �Pillar#4B: Startup)
Digital Age NITI developing National Program on Artificial Intelligence.
� Conclusion? From above points, it is evident that NITI’s approach is more modernised,
forward-looking, less bureaucratic and less status-quo oriented than the erstwhile Planning
Commission. With such initiatives, NITI Ayog is playing a pivotal role for economic growth, human
development and good governance in India. नी�त आयोग का ���कोण अ�धक आधु�नक, दू रंदेशी, कम नौकरशाही और
कम 'यथा���त' वाला है- �जससे वह आ�थक वृ�द्ध, मानव �वकास, और सुशासन म� मदद करेगा

46.9 🕵🕵 🧔🧔 ECONOMY PLANNING → PM-EAC?

Prime Minister's Economic Advisory Council (प्रधानमं त्री क� आ�थक सलाहकार प�रषद)
- Just like PC and NITI, this is also neither constitutional nor statutory body.
- Started in the 2000s to give advice on economic issues to the Prime Minister.
- After PM Manmohan Singh’s term finished (2014), PM Modi did not reconstitute it for a while.
But in 2017, our growth rate ⏬ in the aftermath of demonetisation and GST, so opposition
parties & critics were making lot of hue and cry about PM’s faulty economic policies. In that
atmosphere, PM Modi again reconstituted this Economic Advisory Council (2017-Sept).
- Composition? Economist Bibek Debroy (as Chairman) & other notable full time and part time
members= Total 7 persons. NITI provides administrative / secretarial support to PM-EAC.
PMEAC has suggested to government to:
- 1) Set up a GST Council like body on public expenditure(More in 📑📑Pillar#2)
- 2) ⏬ the number of GST slabs.(More in 📑📑Pillar#2)
- 3) ⏬the Direct Taxes to boost the demand & economy.

46.9.1 🤳🤳 Economy Planning → PRAGATI?

2015: Pro-Active Governance and Timely Implementation (PRAGATI) is a web platform under
Prime Minister's Office (PMO) for
1. Monitoring scheme implementation (योजनाओं के अमल क� �नगरानी)
2. Addressing common man’s grievances related to tax refunds, EPFO claims etc. (आम आदमी क�
�शकायतों का �नवारण)
PM uses this digital platform for monthly video conferencing with ministries & departments
@Union, and Chief Secretaries(IAS) @States.

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 Table 2: Some Other related Organizations

eSamikSha - 2014: PM Modi launched web portal under Cabinet Secretariat.

- After the Ministers / officials meet PM → decisions / follow up actions are
monitored through this portal.
- If an IAS is sitting on a file, this webportal allows PM / Cabinet Secretary to
digitally ask that IAS to explain the delay or expedite the decision-making.
Project - 2013: PM Manmohan formed “PMG” in Cabinet Secretariat for fast tracking
Monitoring approval / implementation of public sector, private sector and PPP Projects.
Group - They operate a webportal ‘e-Nivesh Monitor’ for investment / biz proposals.
Investment - (2004-09: Under Ratan Tata to make recommendations to the government on
Commission policies and procedures to facilitate investment.
- 2016 Government thought to revive it but faded topic. (फू टा �आ कारतूस)
CPGRAMS - 2007: Personnel Ministry → Department of Administrative Reforms & Public
(भ्र�ाचार Grievances (DARPG: प्रशास�नक सुधार और लोक �शकायत �वभाग) launched the portal
भाई भतीजावाद Centralized Public Grievance Redress And Monitoring System (CPGRAMS)
धाँधली क� - Any citizens can file complaint against any Central
�शकायत के �लए) Ministries/Departments/Organisations for Corruption, Nepotism,
harassment, mismanagement, absenteeism, Delay in providing services etc.
They also launched a mobile app ‘My Grievance’.
[Yearbook] Following don’t fall under any ‘Ministry or Dept’
Misc. APEX/ INDEPENDENT OFFICES/Dept
1) President’s Secretariat (रा��प�त स�चवालय)
2) Cabinet Secretariat (मं त्रीमं डल स�चवालय) → Research & Analysis Wing
3) Prime Minister’s Office (प्रधान मं त्री कायार्लय) → National Security Advisor (NSA:
रा�ी� य सुर�ा सलाहकार)
4) NITI Aayog (National Institution for Transforming India)
5) Department of Atomic Energy (परमाणु ऊजार् �वभाग)
6) Department of Space (अंत�र� �वभाग)
7) National Security Council Secretariat (रा��ीय सुर�ा प�रषद स�चवालय)
🔠🔠❓MCQ Which of following is correct chronology sequence of formation of the Commissions? (UPSC-
CDS-i-2020)
A. Finance Commission (FC), Planning Commission, Investment Commission, Election
Commission (�वत् आयोग, योजना आयोग, �नवेश आयोग, चुनाव आयोग)
B. Election Commission, Planning Commission, FC, Investment Commission
C. Planning Commission, Election Commission, FC, Investment Commission
D. Investment Commission, FC, Planning Commission, Election Commission

Statistical data is required to prepare an economic plan or fiscal policy & to

monitor its success or failure. And that leads to the next topic →

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46.10 ➗📊📊 🕵🕵 📈📈 [YEARBOOK] MOSPI, NSSO, CSO, NSO

Ministry of Statistics and Programme Implementation (MOSPI: सां��क� और कायर्क्रम कायार्�यन मं त्रालय)’s
administrative head is called ‘Secretary & Chief Statistician of India’ (भारत के मु� सां��क��वद)् .- usually,
Indian Statistical Service officer recruited by UPSC. MoSPI has →
1. 📈📈 National Statistical Office (NSO: रा��ीय सां��क� कायार्लय) →
a. A] Central Statistics Office (CSO: क� द्रीय सां��क� कायार्लय) → computation of GDP, GSDP,
IIP, ASI, CPI (Rural, Urban, All India) and Economic Census (6th was done in 2013);
b. B] National Sample Survey Office (NSSO: राष्ट�ीय प्र�तदशर् सव��ण कायार्लय) → data collection
for various socio-economic indicators, Annual Survey of Industries (ASI), Rural-urban
prices and other data required for CSO’s calculations.
c. 2019: MoSPI merged A+B, henceforth it’ll be called National Statistical Office (NSO)
only. it will be headed by Chief statistician of India-cum-Secretary of MoSPI. (Earlier, C
Rangarajan’s National Statistical Commission in 2005 had recommended this
CSO+NSSO Merger). Further, MoSPI also planning to setup a National-Level Data
Warehouse: It’ll act as a central repository of all the statistical data collected various
ministries, and provide big data analytics.
2. 📯📯 Programme Implementation wing (कायर्क्रम कायार्�यन �ं ध) →
a. Member of Parliament Local Area Development Scheme (MPLADS-1993: सांसद �ानीय
�ेत्र �वकास योजना) → each MP can suggest development works worth ₹ 5 crore per year in
his constituency. (📑📑More in Pillar#5: Rural infra)

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 b. Twenty Point Programme (2006: बीस सूत्री कायर्क्रम) to measure performance of various
schemes related to poverty alleviation, employment, housing, education, health, etc.
c. Infrastructure Monitoring and Project Monitoring.

46.11 ➗📊📊 🕵🕵📈📈 NATIONAL STATISTICAL COMMISSION (रा��ीय सां��क� आयोग)

Setup in 2005 in MOSPI by Cabinet resolution based on recommendations of C.Rangarajan
Committee. So, neither constitutional nor statutory.
- (सं रचना) Structure? 1 part time chairman, 4 part time members + NITI Secretary is ex-officio
member = 6 people. Chief Statistician of India serves as ‘Secretary’ to this commission.
- Functions? It replaced the Governing council of the NSSO. It designs the standards of data
collection - data publication, coordination among the different agencies involved.
- 😰😰Controversy? 2019-Jan: Two members resigned citing “Over the months, we have been
feeling that we were not been taken seriously and being sidelined by the govt. NSC had approved
the Employment Survey 2017-18 but it’s not yet released.” Critics allege this Employment survey
shows jobs fell after demonetization / GST so Modi did not want data released.

If this type of data manipulation & window-dressing is continued then eventually,

⇒ international organisations will lose confidence in India's data collection methodologies. They
will not believe fully, even if the Indian economy is growing really. (हमारे आंकड़ों क� �व�सनीयता कम)
⇒ Large sized economy has to contribute more money to IMF & in return gets more voting rights
in IMF board (e.g. USA). But, if IMF loses confidence in our data collection methodologies, they
may not ⏫ our quota, even if we become an economic superpower.
⇒ International credit rating agencies such as Standard & Poor's (S&P), Moody's, and Fitch Group
will give poor ratings to Indian G-Sec and corporate bonds → Foreign investors will feel shy
about investing in India or they will demand higher interest rates.

To install faith in official statistical data, Government is doing following

1) Draft National Statistical Commission (NSC) Bill 2019 to give statutory status to National
Statistical Commission, so it may work more independently. [वैधा�नक �ान देने के �लए]
2) Draft new National Policy on Official Statistics. [नई नी�त बनायी जा रही है]
3) 2019-Dec: MOSPI setup a Standing Committee on Economic Statistics (SCES). Its Chairman
Pronab Sen suggested that
o Govt should announce a specific calendar that on ‘x’ date of each month or quarter, ‘y’
Macroeconomic indicator data will be released. [�नय�मत �प से एक तय तारीख़ पर सव��ण के आंकड़े
जारी क�ए जाए, तािक �वप� और पत्रकार आरोप न लगा सके िक आँकड़ो के साथ छे ड़-छाड़ क� जा रही है]
o This way critiques will have more confidence in the data released by the Govt.

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46.11.1 ➗📊📊📊📊 Mahalanobis National Award for Statistics
⇒ P. C. Mahalanobis= Father of Indian Statistics. Architect of 2nd Five Year Plan (FYP)
⇒ MoSPI gives P. C. Mahalanobis National Award for outstanding work in statistics.
⇒ 2020: Given to C. Rangarajan (ex-RBI governor). He's the 1st person to win it.

46.11.2 ➗📊📊⚖ Collection of Statistics Act, 2008

⇒ It regulates the collection of statistics related to social, economic, demographic, scientific and
environmental aspects, by central, state and local governments.
⇒ Penalty if companies, individuals and households doesn’t give information / give false
information to the data collectors. सरकारी सव��णों को आंकड़े नहीं देने पर ��� को सजा के प्रावधान।
Sidenote: Data collection / classification is done as per the System of National Accounts 2008 (SNA
2008) by United Nations Statistical Commission (UNSC).

🔠🔠❓ MCQ. National Statistical Commission was established on the basis of the recommendations
of which one of the following commissions/committees? (UPSC-Geologist-2020)
A) Rangarajan B)Lodha C) Santhanam D) M.G.K. Menon Committee

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47 � PILLAR#4C: INDICATORS → UNEMPLOYMENT

47.1.1 🕵🕵🕵🕵🕵🕵International Labour Organization (ILO: अंतररा��ीय श्रम सं गठन)

⇒ 1919: ILO was created as part of the Treaty of Versailles that ended World War I.
⇒ It is a specialised agency of United Nations, HQ: Geneva, Switzerland.
⇒ Famous for its World Employment and Social Outlook report.

47.1.2 👷👷👷👷Occupational of Indian Workers- as per 📔📔📔📔ES22 (number in Crores)

47.2 � UNEMPLOYMENT → INVOLUNTARY → TYPES

1) Voluntary Unemployment (�ै��क बेरोजगारी): a person is out of job on his own choice. Either he
wants higher wages or doesn’t want to work at all.
2) Involuntary unemployment (अनैक��क बेरोजगारी): person is willing to work at the prevailing wage
rates, but unable to find work due to factors beyond his control.

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47.2.1 � Unemployment Major Reasons: (बेरोजगारी के प्रमुख कारण)

⇒ Slow Economic Growth vs Rapid Population Growth. आबादी क� वृ�द्ध के सामने आ�थक वृ�द्ध कम
⇒ Defective Educational System, Lack of skill / employability.[�श�ा प्रणाली, कौश� क� कमी]
⇒ Lack of Banking/Transport/Communication Infrastructure in some areas → people unable to
pursue educational and economic goals [ब�िकंग, सं चार, प�रवहन िक बु�नयादी अवसं रचना क� कमी- इस�लए कु छ
गरीब लोग �श�ा और आ�थक अवसर ढूँ ढ नहीं पाते]
⇒ Social Factors- discrimination against SC/ST/Women/PH. [कमजोर वगर् के �खलाफ़ भेदभाव]
⇒ (More in �Pillar#6: HRD- Education, Skill, Poverty)

Types Features
Cyclical (चक्र�य बेरोजगारी ) ⇒ Economy goes through boom-bust cycles. [आ�थक तेज़ी/मं दी]
⇒ during bust / recession / depression when workers are laid off on
mass scale.
⇒ E.g. Maruti removed 3000 workers in 2019 because car sales ⏬.
Frictional ⇒ When a person is out of one job and is searching for another job.
(प्र�तरोधा�क) During this transition time, he’s deemed frictionally
unemployed.[एक नौकरी छोड़ के दू सरी ढूँ ढ रहा है]

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 Types
Disguised
🍒🍒 Unemployment
(प्र��)
☔ Seasonal (मौसमी)
Underemployment
(अ�रोज़गार) or Educated
unemployment
🤖🤖 Technological
Unemployment
(प्रौद्यो�गक� / मशीनीकरण/ रोबोट- ⇒ 2018-Sept: World Economic Forum released “Future of Jobs
यं त्रमानव के उपयोग से मज़दू रों क�
बेरोज़गारी)
Open / Structural
(सं रचना�क) [आदमी का
कौश�, बाज़ार क� ज़�रतों के
अनुकूल नहीं]
Natural rate of
unemployment. (NROU)
बेरोजगारी का प्राकृ �तक दर
Features
⇒ Unemployment which is not visible because person seems visibly
working but his marginal productivity / contribution is zero.
⇒ E.g. Farming family of 4 persons produces 200 kgs of grapes, but
even if you remove 3 persons still production remains at 200 kgs.
⇒ ऐसी बेरोज़गारी जो ��मान तो नहीं िक�ु मज़दू र का सीमांत उ�ादन शू� ह�।
⇒ Labourers in Agriculture, Salt-pans, Sugar Mills, Ice-factory,
Tourist spots, Marriage Catering-Orchestra etc.
⇒ Person is employed but not in a befitting position or salary
corresponding to his qualification.
⇒ e.g. M.Com working as Swiggy delivery boy, M. Tech working as
Bank clerk etc.
⇒ When men are replaced with machines e.g. Handloom workers
vs Textile Machines, Horse carriage vs Automobile.
Report”. It says, by 2025, machines will do more work than
humans. As a result, 75 million worker jobs may be lost, but 133
million new jobs may emerge in robot repair/robot software
design etc. Hence urgently workers need to be reskilled.
⇒ Lack of jobs when person’s skill/qualification is insufficient for
the jobs available in the market
⇒ e.g. An IT Graduate knows C++ language but demand is for
software developers of Python/JAVA computer language.
sum of frictional unemployment and structural unemployment is
referred as the natural rate of unemployment. (NIOS Textbook)

47.3 �📊📊 UNEMPLOYMENT → NSO SURVEY TYPES

NSO surveys → Quinquennial Employment and Periodic Labour Force Survey (PLFS
Unemployment Surveys आव�धक श्रम बल सव��ण)
Survey frequency? Every 5 years. Starting from ⇒ Annual. Started since 2017
(सव��ण क� आवृ�� िकतनी 1972 Last survey done in 2011- ⇒ PLFS Survey: workers aged 15
समयाव�ध पर) 12. Then discontinued years or higher are counted.

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 NSO surveys → Quinquennial Employment and Periodic Labour Force Survey (PLFS
Unemployment Surveys आव�धक श्रम बल सव��ण)
Which households are Non-agriculture workers in ⇒ Both urban & rural, agro & non-
surveyed? (िकतने घरों का rural and urban areas (के वल ग़ैर agro covered. (शहरी ग्रामीण कृ �ष
सव��ण) कृ �ष मज़दू रों का सव��ण) ग़ैरकृ �ष सभी का सव��ण)

47.4 �📊📊 UNEMPLYOMENT: PERIODIC LABOUR FORCE SURVEY (PLFS)

PLFS Annual Release Year Time period Covered
Report No. (कब प्रका�शत �आ) (उस �रपोटर् म� िकन वष� का डेटा है?)
Report #1 2019-May July 2017- June 2018
Report #2 2020-June July 2018 - June 2019
Report #3 2021-July July 2019-June 2020
Apart from this, MOSPI → NSO also releases quarterly bulletins e.g.

Quarter Released in
Q2:Jul-Sept-2020 2021-Aug
Q3:Oct-Dec-2020 2021-Sept
⚾📻📻⚾🎙🎙✋But preparing the quarterly data = poor cost:benefit from exam point of view. . �तमाही
आंकड़ों के पृथ�रण का डेटा तैयार करने म� परी�ा क� मेहनत �ादा और परी�ा म� फायदा कम है.

47.4.1 📊📊 � Indicators → unemployment rate (UR: बेरोज़गारी दर)

Figure 1: Amount in Crores, Source- latest Economic Survey 2022

👷👷�Labour force (श्र�मक वगर्)= Those who are 'working' (or employed) + Those 'seeking or available
for work' (=involuntarily unemployed).
Unemployment rate finds involuntarily unemployed persons via following formula:
��𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 (𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖) 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑖𝑖𝑖𝑖 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓
Unemployment Rate = � 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 👷👷���
� × 100

For example: 2018: Unemployment Rate= (3 cr divided by 51.8cr) x 100 = 5.8%

Table 3: NSO measures unemployment in 3 different approaches viz.
Current Weekly Status If not employed even 1 hr work in a week
Current Daily Status If not employed even 1 hr work in a day in a given week.

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 Usual Status - It’s further subdivided into Principal Activity Status (ps) and
(US: सामा� �प से) Subsidiary Economic Activity Status (ss) but internal difference
poor cost benefit.
- If person’s usual status (pp+ss) was “Unemployed” for majority
of the year → he’s deemed unemployed.
- In official reports, this figure is given more prominence.
- 2019: NSO’s periodic labour force survey 2017 (PLFS: आव�धक
श्रमबल सव��ण) says unemployment rate = 6.1% as per (US PP+SS:
2017) which is highest in last 45 years.
- As per 📔📔📔📔ES21 : High % of unemployment: Arunachal, Kerala, Manipur, and Bihar
- Low % of unemployment: Gujarat, Karnataka, West Bengal and Sikkim
- Unemployment %: highest among urban youth (20%) and is lowest among "illiterates" at
1.1% (बेरोज़गारी का प्र�तशत शहरी युवाओं म� सबसे �ादा है। अनपढ़ों म� बेरोज़गारी सबसे कम)

47.4.2 👷👷/( 👷👷 �) Indicators → Worker Population Ratio (WPR)

It is the percentage of employed persons in the population.
𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝👷👷�
WPR= �𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 👼👼👼👼���👴👴� × 100

All Persons (Male+Female) in Both (Urban+Rural) areas 2017 2018 2019

As per latest PLFS (Upto June-2020)
Unemployment Rate = steadily decreased 6.1 5.8⏬ 4.8⏬
Worker Population Ratio = steadily increased 34.7 35.3⏫ 38.2⏫
(people who actually have jobs divided by total
population)
Labour Force Participation Rate (LFPR: persons who are 36.9 37.5⏫ 40.1⏫
working or looking for a job)

47.5 👷👷/( 👼👼👼👼👴👴) INDICATORS → LABOUR FORCE PARTICIPATION RATE (LFPR)

(LFPR) is the % of persons in labour force (i.e. working or seeking or available for work) in the
population. (श्रम बल भागीदारी दर)

𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝👷👷� + ��𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

� � × 100
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 👦👦👦👦👦👦���👴👴👴👴

- 2017: 37% (male+female in rural+urban combined). It can’t be 100% because there will be
children, elderly outside the ‘15-59’ age group meant for workers.
- �LFPR for female: Replace the word ‘person’ with ‘female’ in above formula. It’s lower than
male LFPR.
𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 � + �𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿(𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓) = � � × 100
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑜𝑜𝑜𝑜 𝑡𝑡ℎ𝑒𝑒 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 👧👧👧�👵👵

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 % LFPR (Approx.) 2017 2018 2019 Comment,if any
�FEMALE Urban 15 16⏫ 18⏫ Urban Female less LFPR than rural
�FEMALE Rural 18 19⏫ 24⏫ due to city women pursuing higher
education so not looking for job at
present, husband is earning big so
housewife staying @home.
�FEMALE 17 19⏫ 23⏫ Female LFPR(All India)@23% is much
Urban+Rural=All India less than MALE LFPR(All India)@57%
All India (Urban+Rural) 37 मिहलाओं का श्रम बल भागीदारी दर, पु�षों के मुकाबले
37.5⏫ 40⏫
(👷👷Male+ �Female) काफ� कम है😰😰

47.5.1 �⏬⏬Why FEMALE LFPR Declined between 2004 to 2018?

From 2004 to 2017, LFPR (Female: rural+urban) steadily declined ⏬ (from 45% to 17%) because-

 ⏫ women pursuing higher studies → their entry in the job market is delayed.
 ⏫ in income of (some) rural men → their wives have stopped working as labourer and just
playing domestic housewives role.[कु छ ग्रामीण मद� क� आमदनी बढ़ी तो प�ी क� नौकरी बं द करवाई]
 ⏫mechanization of agriculture & animal husbandry → ⏬ demand for female agri workers.
 ⏬ textile/leather exports due to US/EU protectionism → ⏬demand for female workers
 ⏬real estate sales → ⏬ construction of new buildings → ⏬female laborers
 Cultural factors, social constraints and patriarchal norms restricting mobility and freedom of
women. (सां�ृ�तक कारक, सामा�जक बाधाएं और �पतृस�ा�क मानदं ड के चलते मिहलाओं क� आजादी पर पाबं दी)

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 Many rural / small-town girls don’t have require knowledge of computer and English to get jobs
in emergent startup sectors. (अंग्रेजी और कं �ूटर �ान क� कमी)
 NSO's Time Use Survey, 2019 reported that females spend relatively more time in unpaid
domestic and caregiving activities (7.5 hours) than in paid/employment activities (5.7 hours) per
day. (मिहलाएँ रोज़गार से �ादा समय घरेलू अवैत�नक काय� म� �बताती है)
 Examples of unpaid domestic activities = taking care of children, elderly in the household,
Cooking, cleaning home etc. (जैसे क� ब�े और बुजुग� क� देखभाल, रसोई, साफ़ सफ़ाई)
 Solution? Government should invest in child care / day care facilities, paid parental leave,
family-friendly work environment, and elderly care facilities, Equal pay and career progression
for women, medical and social security benefits for female workers. If these things are not
available then there will be more family pressure on the women not to do the job and take care of
the house. (सरकार ने ऐसी सु�वधाएँ प्रदान करनी चािहए जहाँ नौकरीशुदा मिहलाओं के ब�े और बुजुग� क� देखभाल क� �व�ा
हो, मिहलाओं के �लए वेतन तथा पदो��त म� पु�षों के समान अवसर उपल� हो, अ�था प�रवार क� तरफ़ से मिहला पर नौकरी क�
जगह घर क� देखभाल का बोझ का दबाव �ादा रहेगा)
Solution to improve LFPR? [कै से इज़ाफ़ा / बढ़ोतरी कर� ?]
⇒ Government schemes for skill development and entrepreneurship among women → �Ref:
Pillar6-HRD → Women empowerment. (मिहला सश��करण के �लए �व�वध कौशल �वकास योजनाएं )
⇒ Government should invest in child care / day care facilities, paid parental leave, family-friendly
work environment, and elderly care facilities, Equal pay and career progression for women,
medical and social security benefits for female workers.( नौकरीशुदा मिहलाओं के ब�े और बुजुग� क� देखभाल
क� �व�ा, मिहलाओं के �लए वेतन तथा पदो��त म� पु�षों के समान अवसर उपल� हो)
⇒ If these things are not available then there will be more family pressure on the women not to do
the job and take care of the house. (अ�था प�रवार क� तरफ़ से मिहला पर नौकरी क� जगह घर क� देखभाल का दबाव)

47.6 👷👷� WORKERS TYPES BY NSO

self-employed ⇒ those who work for themselves & charge 'fees'. They do not sell their
�-रोजगारी labour power to anyone else for a "wage", so they are their own 'boss'. सेवा
के बदले फ�स लेते है.तन�ाह/वेतन नही
⇒ subcategories: 1) Own Account 2) Partners / Owners / Employers Of
Business Firm 3) Unpaid Family Labourers
wage/salaried They sell their labour to 'boss (employer)', for predetermined wages/salary.
employees Their job continuous round the year. �नयत वेतनभोगी कमर्चारी
Their numbers decreased ⏬ as per latest PLFS (it was bound to happen due
to Corona) कोरोना महामारी के चलते वेतनभोगी श्र�मकों / कमर्चा�रयों क� सं �ा कम �ई
casual workers ⇒ They sell labour for 'wage' but 'boss (employer) hires them for very short
अ�नयत कमर्चारी time period on daily or monthly basis. [ब�त छोटे समय के �लए काम �मलेगा]

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 ⇒ As per Latest PLFS: Male = no significant %change (कु छ खास बदलाव नहीं)
⇒ Female = Their proportion ⏬ in Corona-2020 (female ragpickers,
construction workers etc removed from job in lockdown)

47.6.1 👷👷� Worker Types → Census-2011 classification of workers

Worker type Employed for this much duration in a year
Main worker 6 months or more. (183 days to be precise)
Marginal worker less than 6 months. (सीमांत श्र�मक)

🔠🔠❓MCQ. As per Census, ‘Main Worker’ is a person who works for at least _ _ days in a year
(Geologist-2020) A) 100 days in a yr. B) 153 days C) 183 days in a year. D) 200 days in a year.

🔠🔠❓ MCQ. Find correct statement(s) about Indian economy after the 1991 (Prelims-2020)
1. Worker productivity per worker (at 2004-05 prices) increased in urban areas while it
decreased in rural areas. (मज़दू रों क� उ�ादकता शहरों म� बढ़ी गाँव म� कम होगी)
2. The percentage share of rural areas in the workforce steadily increased.
3. In rural areas, the growth in the non-farm economy increased.
4. The growth rate in rural employment decreased.(गाँव म� रोज़गार वृ�द्ध दर म� �गरावट)
Codes: (a) 1 and 2 only (b) 3 and 4 only (c) 3 only (d) 1, 2 and 4

🔠🔠❓ MCQ. Which of the following statements about the employment situation in India according to the
periodic Labour Force Survey 2017-18 is/are correct? (UPSC-CAPF-2020)
1. Construction sector gave employ­ment to nearly 1/10th of urban male workforce in India
2. Nearly 1/4th of urban female workers in India were working in manufacturing sector
3. 1/4th of rural female workers in India were engaged in the agri­culture sector
Codes: (a) 2 only (b) 1 and 2 only (c) 1 and 3 only (d) 1, 2 and 3
🔠🔠❓MCQ. In India, which one of the following compiles information on industrial disputes, closures,
retrenchments and lay-offs in factories employing workers? (Prelims-2022)
(a) Central Statistics Office (b) DPIIT (c) Labour Bureau
(d) National Technical Manpower Information System

47.6.2 👷👷🧱🧱🧱🧱 Worker Types → Unorganized sector

⇒ An unorganized sector (असं गिठत �ेत्र) firm is not registered under any law such as Shop
Establishment Act, Factory Act, Companies Act, Statutory Corporation, Govt org etc.

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⇒ Unorganized sector consists of individuals / self employed workers engaged in non-trade-
unionized casual / seasonal work with irregular payments & lack of social security like
EPFO/ESIC. (मजदू र सं घ नहीं होता �ाई/�नय�मत �प से काम/आमदनी नहीं, सामा�जक सुर�ा का अभाव)
⇒ Government has enacted Unorganized Sector Workers' Social Security Act, 2008 to provide
them with life and disability cover, health and maternity benefits, old age protection etc.
(जीवनबीमा, और �वकलांगता बीमा, �ा� और मातृ� लाभ, बुढ़ापे क� सुर�ा आिद।)

Table 4: Labour Ministry classification →

Examples of Unorganized worker <List not exhaustive>
Occupation wise Small and marginal farmers, landless agricultural labourers, share croppers,
(�वसाय के आधार fishermen, those engaged in animal husbandry, beedi rolling, labeling and
पर) packing, building and construction workers, leather workers, weavers, artisans,
salt workers, brick kilns and stone quarries
Nature of Attached agricultural labourers, bonded labourers, migrant workers, contract
employment and casual labourers.
Specially Toddy tappers, Scavengers, Carriers of head loads, Drivers of animal driven
distressed vehicles, Loaders and unloaders.
Service Midwives, Domestic workers, Fishermen and women, Barbers, Vegetable and
categories fruit vendors, News paper vendors etc.
Miscellaneous Cobblers, Hamals, Handicraft artisans, Handloom weavers, Lady tailors,
�व�वध / अ� Physically handicapped self employed persons, Rickshaw pullers, Auto drivers,
Carpenters, Tannery /Power loom workers and Urban poor.
Unorganised worker (असं गिठत मजदू र) = Person working in above sectors. There are more number of
workers in unorganized sector, than in the organized sector.

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47.6.3 👷👷⏳ Worker Types → Informal worker (अयथाव�ध/अनौपचा�रक मजदू र)
⇒ = Person who is not in the formal records / contract of a firm. So he could be in unorganized
sector and he could be even in ‘organized sector’ e.g. driver / Security Guard / Chowkidaar /
gardener in Reliance ltd.
⇒ Non-Agri Sectors where large % of workers are Informal workers: Construction (>80% of its
workers), Mining (>30% of its workers) , Transport Hotel restaurant (>10% of its workers) ये ग़ैर-
कृ �ष �ेत्र है जहाँ के मज़दू रों म�, �ादातर अनौपचा�रक / अयथाव�ध मज़दू र है
⇒ They are usually deprived of Minimum wages, EPFO/ESIC's Insurance/pension/social security
=Cannot afford to stay in the city area during Corona uncertainty.
⇒ So they would quickly flee to the village home in panic.
⇒ Corona: more than 60 lakh migrant workers travelled through Shramik Special trains in May-
August 2020. = factory production / Supply ⏬⏬ (अयथाव�ध इन मज़दू रों को सामा� �प से �ूनतम वेतन,
तथा सामा�जक सुर�ा लाभों से वं �चत रखा जाता है इस�लए महामारी िक अ�न��तता के दौरान वे तुरंत वतन वापसी करते ह�. �जससे
फ़ै ��ी उ�ादन/ आपू�त म� �गरावट)
Table 5: Number of workers in Crores each category. Source: Latest Economic Survey 2022

So, basically, 1) workers in unorganized > organized. 2) workers in Informal > Formal.
Formalization of jobs = when proportion of formal workers ⏫ , in above table.

🔠🔠❓MCQ. Which about India's unorganised sector are true? [UPSC-CDS-2014-I]

1. Labour is more in number than that in the organised sector.
2. Job security and work regulation are better in unorganised sector.
3. They are usually not organised into trade unions.
4. Workers are usually employed for a limited number of days.
Answer Codes: (a) 1, 2 and 4 (b) 1, 3 and 4 (c) 3 and 4 (d) 1 and 3

🔠🔠❓MCQ. With reference to the casual workers employed in India, consider the following
statements: [अयथाव�ध मजदू रों के बारे म� सही वा� ढू ं�ढए] (Prelims-2021)
1) All casual workers are entitled for Employees Provident Fund coverage. [सभी अयथाव�ध मजदू र
ईपीएफओ के �लए हकदार ह�]
2) All casual workers are entitled for regular working hours and overtime payment. [सभी अयथाव�ध
मजदू र सामा� घं टों म� िकए गए कायर्वेतन और ओवरटाइम वेतन के �लए हकदार है]

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3) The government can by a notification specify that an establishment or industry shall pay wages
only through its bank account. [सरकार यह �नद�श जारी कर सकती है िक �च��त उद्योगों ने के वल ब�क खाते द्वारा वेतन
भुगतान करना होगा]
Codes: a) 1 and 2 only b) 2 and 3 only c) 1 and 3 only d) 1, 2 and 3

47.6.4 👷👷 🖱🖱 Worker Types → Unorganized workers → E-Shram Portal for them (2021-Aug)
- National Database of Unorganized Workers By Ministry of Labour & Employment
- to register Unorganised Workers of India such as construction workers, migrant workers, street
vendors, domestic workers, milkman, truck drivers, fisherman, agriculture workers etc. (असं गिठत
�ेत्र के मज़दू रों के पं जीकरण के �लए श्रम मं त्रालय का एक ऑनलाइन पोटर्ल बनाया गया है)
- There is no registration fee. Upon registration the workers shall be issued a e-SHRAM card with
unique Universal Account Number (UAN). पं जीकरण के �लए कोई फ�स नहीं लग�गी
- He can use it for various social security schemes through this Card anywhere anytime.
- �E-Shram Portal registered worker will get Rs 2.0 Lakh Accidental Death free of cost through
under Pradhan Mantri Suraksha Bima Yojana (PMSBY- REF Pillar1D) . (आक��क मृ�ु पर मुआवजा)
- � �ES22: So far 23 cr registered.
o Area-wise Highest from: UP (35%) > W.Bengal > Bihar
o Sector wise: Highest from: Agri > Domestic Workers > Construction Workers.

47.6.5 👷👷👷👷👷👷 Worker Types → Gig workers & Two sided market - 📔📔📔📔ES21
⇒ Definition: Gig workers are temporary workers who are engaged in livelihoods outside the
traditional employer-employee arrangement. Delivery boys, app-based taxi drivers, service
providers such as cleaners and technicians, and freelance workers are all part of the gig economy.
(�गग-मज़दू र/श्र�मक - अ�ाई मज़दू र है जो िकसी ऑनलाइन मोबाइल ऐप के द्वारा एक �तं त्र ठे केदार के �प म� अपनी सेवाएँ देता है
जेसे क� जोमेटों एप द्वारा ग्राहक को रे�ोर�ट का खाना प�ँ चाना।)
⇒ DATA: 7.5 million+ workers were engaged in the gig economy in 2020-21, and this number
could grow to more than 20 million in the next 8 year.
⇒ Problem: usually deprived of social security benefits such as maternity leave, EPFO, ESIC,
unemployment allowance, disability allowance etc. (इ�� सामा� श्र�मक क� तरह कं पनी द्वारा बीमा, प�शन,
EPFO, बीमारी के दौरान सवेतन छु ट्टी, मातृ� लाभ इ�ािद सामा�जक सुर�ा योजनाओं का लाभ नहीं �मलता।)

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Digital technology enables such two-sided markets. Its features are: (दो बाज़ूओ ं वाला बाज़ार)

⇒ 1) two sets of agents (Buyer and seller) interact through an intermediary or platform or
Aggregator app (Amazon, Ola, Uber etc) (दो एज�ट आपस म� एक �बचौ�लए के द्वारा आदान प्रदान करते ह�)
⇒ 2) the decisions of each set of agents affects the outcomes of the other set of agents (e.g.
Customer gives 5-star delivery rating or not → Delivery boy's payment affected etc)
Gig worker- Characteristics/Features: (गीग कम� क� ला��णकता)

⇒ 1) He/she works in a digital technology enabled two sided market. In the company's
records/contracts- such workers are usually shown as "independent service
providers/contractor" and not as "employees". So they are usually deprived of the
EPFO/ESIC/And other social security benefits (Ref: #1D3) Although Code on Social Security
2020 aims to fix this problem. (कं पनी के अनुबंध के िहसाब से यह कम� कं पनी का कमर्चारी नहीं िकंतु एक �तं त्र सेवा देने
वाला ठे केदार है. इस�लए वो प्राय �व�भ� प्रकार क� सामा�जक सुर�ा योजनाओं से वं �चत रह जाता है.)
⇒ 2) work-contract is usually shorter, temporary, Not permanent. (इस लघु अव�ध का अ�ायी अनुबंध)
⇒ 3) Their payment may include
o a) piece rate (e.g. How many deliveries made)
o b) partly reward above a fixed salary (e.g. How many 5 star ratings received on delivery)
(�न��त तन�ाह के अलावा अ�त�र� ईनाम पुर�ार)
o c) partly profit (e.g. Taxi owner, Amazon seller) आं�शक मुनाफ़ा

47.6.6 👷👷👷👷👷👷 NITI Report on Gig Workers

⇒ NITI Report- “India’s Booming Gig and Platform Economy”: following recommendations →
⇒ � Social security measures such as income support, paid sick leave, insurance, and pensions

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⇒ � Women are more likely to take up platform jobs after education and marriage. So,
Government should give tax and subsidy benefit to companies if they're hiring more women /
PH. (शादी के बाद कई मिहलाएँ पारंप�रक िक़� क� ऑिफ़स क� नौकरी नहीं कर सकती। वे भी �गग-वकर् र बनना चाहती है। इस�लए
सरकार ने कं प�नयों को टै� और स��डी म� ऐसे प्रो�ाहन देने चािहए तािक वे �ादा से �ादा मिहला और अपािहजों को �गग-वकर् र
क� नौकरी दे।)

47.6.7 👷👷👷👷👷👷 How to create more jobs?

⇒ Mains Quality Enrichment Program (QEP): https://unacademy.com/course/mains-
economy-revision-quality-improvement-program-qep/H6N2TJ6H
⇒ But do it after finishing all 6 pillars, to see interlinkages.

47.7 ✍🎺🎺 MOCK QUESTIONS FOR MAINS → NITI PC UNEMPLOYMENT

Is inclusive growth possible under market economy? State the significance of financial 2022
inclusion in achieving economic growth in India. (�ा बाज़ार अथर्�व�ा के अ�गर्त समावेशी �वकास
सं भव है? भारत म� आ�थक �वकास क� प्रा�� के �लए �व�ीय समावेश के मह� का उ�ेख क��जए।) Ans. Youtube
Economic growth in the recent past has been led by increase in labour productivity. 2022
Explain this statement. Suggest the growth pattern that will lead to creation of more jobs
without compromising labour productivity. (“हाल के िदनों का आ�थक �वकास श्रम उ�ादकता म� वृ�द्ध के
कारण सं भव �आ है।” इस कथन को समझाइए । ऐसे सं वृ�द्ध प्र�त�प को प्र�ा�वत क��जए जो श्रम उ�ादकता से समझौता
िकए �बना अ�धक रोजगार उ��� म� सहायक हो) Ans. Youtube
Examine the role of ‘Gig Economy’ in the process of empowerment of women in India. 2021
भारत म� मिहलाओं के सश��करण क� प्रिक्रया म� '�गग इकोनॉमी' क� भू�मका का प�र�ण क��जए।
The nature of economic growth in India in described as jobless growth. Do you agree with 2015
this view? Give arguments in favour of your answer. भारत क� आ�थक वृ�द्ध, "रोजगार-रिहत/बेरोजगार
यु�" आ�थक वृ�द्ध है.�ा आप इससे सहमत ह�? Ans. Many points similar to 2017 Qs on we failed to
create labour intensive exports. Ref: Sp.classs
How are the principles followed by the NITI Aayog different from those followed by the 2018
erstwhile Planning Commission in India? नी�त आयोग द्वारा अपनाए गए �सद्धांत योजना आयोग से अलग कै से

📑📑Next: Pillar#4C: GDP, GNP, V-Shaped Recovery, $5 Trillion Economy

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