Unemployment is a situation when people who are
willing to work at the going wages are not able to find the jobs.
Types of Unemployment
Structural unemployment occurs because of an
absence of demand for a certain type of worker. This happens when there are
mismatches between the skills employers want and the skills workers have.
Frictional unemployment occurs because of the
normal turnover in the labour market and the time it takes for workers to find
new jobs. Throughout the course of the year in the labour market, some workers
Seasonal unemployment occurs when people are not
able to find jobs during some months of the year.
In case of disguised unemployment people appear
to be employed. But their Marginal Productivity is Zero. In simple terms,
suppose a plot requires 3 people for the whole work but a family of 6 people is
involved in it. So it has 3 member extra members involved, than the required. The extra output added by
these 3 extra people is zero.
In Agriculture we see both Disguised and
Status of Unemployment in India
ILO Report on Unemployment in India
The number of unemployed people in India is
expected to rise by 1 lakh in 2017 and another 2 lakh in 2018.
India’s unemployment rate is expected to go down from 3.5 per cent to 3.4 per
cent in 2017.
Economic Growth is not inclusive. Rather has
turned into Jobless Growth.
Urban areas suffer mostly
from educated unemployment.
A study showed that
unemployment of graduate and post-graduate has increased faster than among
Employment across various sector of the Economy
Attracting and Retaining Youth in
The ICAR has initiated the program (ARYA) in
selected districts through KVKs with an objective for entrepreneurial
development of Youth in Rural Areas to take up various Agriculture, allied
and service sector enterprises for sustainable income and gainful employment.
The identified youth are trained on
entrepreneurship development skills by providing a basket of options to start
agriculture ventures for self employment.
It employs more than 50% of India’s Work force.
But its share in GDP is abysmally low.
Protests by agricultural communities in the last
two years eg. Marathas in Maharashtra ,
Jats in Haryana, Patels in Gujarat shows the distressed situation of Indian
Disguised unemployment is one of the major
reasons of low productivity of Agriculture in India.
Most parts of India have subsistence Agriculture.
The industrial sector, contributes nearly 25% of GDP.
India’s service sector has grown at an annual
rate of 9% since 2001, and contributed 64% of the GDP in 2015-16. While its
contribution in employment is just around
Services sector has attracted significant
foreign investment flows.
It contributed significantly to exports.
India’s services sector covers a wide variety of
activities such as trade, hotel and restaurants, transport, storage and communication,
financing, insurance, real estate, business services, community, social and
personal services, and services associated with construction.
Employment in Informal Sector -Informalisation of Indian Economy
More than 90% of Indian working population is in informal
sector and it is major cause of concern because informal sectors suffers from
lack of social security measures, hazardous work place conditions, unregulated
working hours etc.
Rigid Labour Laws.
The rigid labour regulatory framework of India has proved to
be a bottleneck for ferms , from hiring workers and expanding their production
India has large number of labour laws catering to different
aspects of labour namely minimum wages, compensation, disputes resolution,
social security, working conditions etc.
Labour is listed in Concurrent List thus both the Central
and State Governments are competent to enact legislations. As a result, a large
number of labour laws have been enacted catering to different aspects of
Niti Aayog in an Ease of doing business report has asked the
government to make labour laws more flexible and easier to do business in in
In 2002, the Second National Commission on Labour suggested
the formulation of labour codes similar to those in Russia, Germany, Poland,
Hungary and Canada. The commission recommended that labour legislation be
divided into five broad areas: industrial relations, wages, social security,
safety and welfare, and working conditions.
The Code on Wages Bill 2017
The Code on Wages Bill 2017 subsumes 4 existing Laws, viz. the
Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Payment of Bonus
Act, 1965; and the Equal Remuneration Act, 1976.
This will remove the multiplicity of definitions
and authorities leading to ease of compliance without compromising wage
security and social security to the workers.
New Code on Wages will ensure minimum wages to all
and timely payment of wages to all employees irrespective of the sector of
employment without any wage ceiling.
A concept of statutory National Minimum Wage for
different geographical areas has been introduced. It will ensure that no State
Government fixes the minimum wage below the National Minimum Wages for that
particular area as notified by the Central Government.
The proposed payment of wages through cheque or
digital/ electronic mode would not only promote digitization but also extend
wage and social security to the worker.
An Appellate Authority will lead to speedy, cheaper and efficient
redressal of grievances and settlement of claims.
Pandit Deen Dayal Upadhyaya Shramev Jayate Karyakram
To create an environment conducive to industrial
development simultaneously ensuring transparency in the labour sector.
Shram Suvidha Portal:
The portal would allot Labour Identification Number (LIN) to nearly 6 lakhs
units and allow them to file online compliance for 16 out of 44 labour laws
Random Inspection Scheme:
Utilizing technology to eliminate human discretion in selection of units for
Inspection, and uploading of Inspection Reports within 72 hours of inspection
Universal Account Number:
Enables 4.17 crore employees to have their Provident Fund account portable,
hassle-free and universally accessible.
Apprentice Protsahan Yojana:
Will support manufacturing units mainly and other establishments by reimbursing
50% of the stipend paid to apprentices during first two years of their training.
Social Security Issues
41 of the constitution says, “the state shall, within the limits of its
economic capacity and development, make effective provisions securing the
right to work, to education, and to public assistance in case of
unemployment, old age, sickness and disablement or any other case of
Our constitution speaks of an integrated concept of social
security. We have a sound legal framework which ensures smooth implementation
of the laws protecting the rights and interests of the citizens.
Govt Initiative to
Promote Social Security
Pradhan Mantri Jan Dhan Yojana (PMJDY)
Launched in August 2014, is a historical
initiative towards financial inclusion of the poor.
The Prime Minister termed the launch of PMJDY as
“vish chakra se gareebon ki azadi
ka parv” (celebration of liberation of the poor from a vicious cycle).
Pradhan Mantri Jeevan Jyoti Bima Yojana
Offers a renewable one year life cover of Rs 2
lakh to all savings account holders in the age group of 18-50 years covering
death due to any reason for an annual premium of Rs 330.
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Covers accidental death to the people in the age
group of 18-70 years at an affordable annual premium of Rs12.
This scheme has the potential to strengthen the social
security net by improving insurance penetration especially in the rural and
excluded areas of the country.
Atal Pension Yojana (APY)
Guarantees old age income security to the
By ensuring a fixed pension (after the age of 60
years) to the subscribers ranging from Rs 1,000 – 5,000 depending upon the
contributions made, the scheme will cater to the old age/post retirement needs
of the subscribers.
Pradhan Mantri Awas Yojana- Gramin.
The step has a goal of achieving ‘Housing for
all by the year 2022’ (the 75th Year
of the Independence of India).
Deen Dayal Upadhyaya Antyodaya Yojana (DAY)
It is a skill based scheme for the urban and
The scheme aims at empowering Indian
youth through skills to generate livelihood opportunities.
Pradhan Mantri Ujjwala Yojana
This has been launched as a long-term and indirect
step towards women’s sound health and enhanced life expectancy.
Low Labour participation of women is low
In the “Global Gender Gap Report” (2017) (WEF),
India has been ranked a low 108 out of 144 countries on the gender equality
Low female LFPR is a drag on gross domestic product (GDP) growth and
an obstacle towards reaching a higher growth path.
More participation of women in informal
According to an International Labour
Organization study, the participation of women in informal employment and
non-standard forms of employment (eg. part-time jobs or jobs in the informal sector)
is higher than men.
The share of women in services and industry is
less than 20%.
Startup India Program- An Initiative for Innovation and Inclusiveness
To promote entrepreneurship, innovation and
inclusive development at all the levels of economic growth and social
Startup India mission will ease the transition
from education to employment for
a youngster while nurturing innovative mindset.
This is the platform where creative and
innovative youth will get a forum to translate their dream into reality.
Providing Skill Development Training for Carpets
up of Indian Institute of Carpet Technology (IICT) at Bhadohi.
Interest subvention and grant of MUDRA loan
schemes to the handicrafts artisans so as to compete with
Organizing Indian Handicrafts & Gifts Fair
twice a year
Stand up India Scheme
Stand Up India Scheme promotes entrepreneurship among Scheduled
Castes/Schedule Tribes and Women.
The schemes provides for composite loans by
banks between Rs. 10 lakh and upto Rs.100 lakh for setting up a new enterprise
in the non-farm sector.
These loans would be eligible for refinance and
credit guarantee cover.
There will be a credit guarantee fund of Rs.
5,000 crore for providing guarantee cover for loans under Stand Up India in first
Creating Employment Through Skill
MUDRA Bank Micro Units Development Refinance Agency (MUDRA) Bank
To encourage entrepreneurs to set up micro
The Bank will refinance Micro-Finance
Institutions through a Pradhan Mantri Mudra Yojana and will have a
corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.
Priority to be given to SC/ST enterprises while
These bottom-of-the-pyramid, hard-working
entrepreneurs (SC/ST) find it difficult, if not impossible, to access formal
systems of credit.
These measures will greatly increase the
confidence of young, educated or skilled workers who will now be able to aspire
to become first generation entrepreneurs.
Existing small businesses, too, will be able to
expand their activities.
Deen Dayal Upadhyay Gramin Kaushal Yojana
Launched to cater to rural youth employment opportunities.
Disbursement will be through a digital voucher
directly into qualified student’s bank account
Employment and Talent Utilisation)
SETU is be a TechnoFinancial, Incubation and
Facilitation Programme to support all aspects of start-up businesses, and other
self-employment activities, particularly in technology-driven areas.
Atal Innovation Mission (AIM)
AIM will be an Innovation Promotion Platform involving
academics, entrepreneurs, and researchers and draw upon national and
international experiences to foster a culture of innovation, R&D and
scientific research in India.
platform will also promote a network of world-class innovation hubs and Grand
Challenges for India.
Self Employment in Horticulture
One can start the Agriculture Clinic and Government
provides money (up to 10.00 Lac) for this venture.
An educated horticulturist expert can raise
commercial nursery of fruit plants, flower and ornamental plants, Seed producer
of vegetables and flower crops, Fruit/ Vegetable / Flower grower, Floral
decorator/ florist shop, Horticulture Services Contractor, Mushroom grower,
Seed dealer/ Merchant, Proprietor cold storage, Processing work of horticulture
production and one can start establishing an institute for vocational education
(Horticulture / Landscape) etc.
National Rural Livelihood Mission (NLRM) / Aajeevika
It is designed as a special programme for rural
For basic skill development of the BPL rural
youths, the Rural Self Employment Institutes (RSETIs) under NRLM have been set
up, which enables them to undertake micro enterprises and wage employment.
Foreign Direct Investment and Employment
Make in India Mission
Through Make in India programme, the government intends
to create 100 million new jobs by 2022 providing manufacturing sector a
stronger role in domestic job creation.
It has a goal of transforming the country into a
global manufacturing hub.
EASE OF DOING BUSINESS
The corporate tax rate for companies registered
in India to go down from 30% to 25% of net profits in a phased manner.
Services Tax has been implemented.
the e-BIZ portal.
Do you think increasing automation eventually lead to replacement of the workforce?
Big Data analyst is able to analyze a large volume of data and draw
inferences. High-speed internet makes it possible to connect devices that can
be controlled remotely. We have ushered-in to the era of Internet of Things
(loT), where each device, from a washing machine, coffee machine, lamp to car
and jet engines is possible to be controlled over loT.
In many areas, a machine is not only replacing
human labor, but it is also taking on cognitive skills.
Machines will replace some jobs, and new jobs
will be created while existing jobs may take on a new set of tasks. It is
anticipated that millions of new jobs will be created by technology, including
those responsible for designing, manufacturing and maintaining robots.
Merely improving efficiency by cost cutting
techniques and replacing human by machines without a holistic framework for
sustainability will have an adverse effect on business on a long run.
Trends show that there is a growing belief among
manufacturer that technology and labour are two opposite sides. However,
adopting a mutually reinforcing relationship where automation extends the
capability of workers should be a long term solution.
Repetitive manual jobs and hazardous jobs are
required to be automated.
Automation has long term implications and apparently
threatening joblessness of semi and unskilled workforces. It is, therefore,
essential that automations are sustainable and able to create benefits for
Automaton in fair price shops (FPS)
To ensure the benefits of minimum support
price reach farmers and to ensure reduction in pilfering in the stocks in the
public distribution system, the government has proposed the automation of 3
lakh of the 5.35 lakh fair price shops (FPS) in the country.
Employment of Children into factories- A dark side of Employment
Article 24 of Indian Constitution Prohibits
Child labour (prohibition and regulation)
Amendment Act, 2016 amends the Child Labour (prohibition and Regulation) Act,1986.
Although the child can help in family enterprise which is other than
any hazardous occupation after school hours or during vacation. Working as an
artist in the audio visual entertainment industry, advertisements, films,
television serial except Circus is permitted under the Law.
It has decreased
the list of hazardous occupation for children from 83 to just mining,
explosives and occupation mentioned in the factory act.
According to UNICEF there are 33 million child
labourers in India. According to census 2011 , 80% of the child labours are
Dalit and 20% are from the backward classes . As the law allows employment to
the family businesses thus it may restrict the children to the traditional
caste based occupation for generations.
The implementation of the
Goods and Services Tax (GST) would create a common national market and reduce
the overall tax burden on goods. It is expected to reduce costs in the long run
thus will promote trade and employment. Further the Labour Reform and Promotion
of Ease in Doing Business along with social security measures and govt initiatives
like Make In India Mission to promote indigenous production, will lead to
better prospects for employment