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Indian Economy / Macro Social Aggregates

Facts about Unemployment in India

All those persons who are in an age group of 15-59 years, capable and desirous of working for remuneration but are unable to find employment are known as unemployed.

Unemployment and its Causes in India

  • Work Force - All those who are in an age group of 15-59 years and working for remuneration (employed) constitute work force.

  • Work Force Participation Rate (WPR) - It is number of persons working per 1000 population i.e. the population of workforce to the total population is known as WPR.

  • Labour Force - Labour Force includes those people who are working and who are unemployed. Those people who are in between 0-14 years and who are above 60 years, housewives and students who are still pursuing education, do not come under Labour Force.

  • Labour Force Participation Rate - It is the proportion of Labour Force to the total population.

  • Unemployment Rate - It is proportion of Unemployed to Labour Force. Generally, the unemployment rate expressed in terms of number of persons who are unemployed per 1000 persons in the total Labour Force. Sometimes, Unemployment Rate is also expressed in terms of percentage.

  • National Sample Survey Office (NSSO) regularly conducts large scale sample surveys on employment and unemployment and releases unemployment rate.

  • Union Ministry for Labour and Employment in 2015-16 claimed that the national unemployment oscillates around 5%. However, Bombay Stock Exchange (BSE) and Centre for Monitoring Indian Economy (CMIE) releases Weekly and Monthly unemployment rate, according to which it hovers around 7%.

  • Our economy is labour surplus economy. Generated jobs are not adequate for the additional Labour Force every year.
  • Causes of Unemployment in India

    • Excessive and rapid increase in population

    • Slow growth of the economy

    • Lack of any National employment policy

    • Emphasis on the capital intensive technology rather than on the labour intensive technology

    • Defective education system
  • Government Measures to Reduce Unemployment in India

    • Adoption of the labour intensive technologies

    • Encouragement to the small and micro enterprises

    • Population control

    • Restructuring the education system