graphical representation of unemployment in india

Unemployment rate in India (2008 to 2024): Current rate, historical trends and more

What is the current unemployment rate in india how about the unemployment rate in the last ten years let's find out.

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The Current Unemployment Rate in India:

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Poverty rate in India: Trend over the years and causes

Inflation Rate in India 2024: A closer look at economic trends

GDP of India: Current and historical growth rate, India's rank in the world

These changing trends in labour demand and employment rates call for thoughtful policy measures to address the prevailing economic challenges and ensure sustainable growth in rural and urban areas. It highlights the importance of diversifying economic activities to create more employment opportunities and bolster the country's financial resilience.

Unemployment Rate in India: Historical Data

How is the current unemployment rate calculated, major economic events impacting the unemployment rate in india in the past.

• Global Financial Crisis (2008-2009): The 2008 global financial crisis severely affected India's economy, leading to a slowdown in growth and reduced employment opportunities in various sectors.
• Demonetisation (2016): The government's decision to demonetise high-value currency notes in 2016 caused economic disruptions, particularly in the informal sector, resulting in temporary job losses.
• Goods and Services Tax (GST) Implementation (2017): The introduction of GST aimed to simplify the tax structure, but it initially caused short-term disruptions in the economy, affecting businesses and employment.
• Covid-19 Pandemic (2020): The Covid-19 pandemic and the subsequent lockdown measures profoundly impacted the Indian economy, resulting in a surge in unemployment as businesses closed and economic activities came to a standstill.
• Inflationary Pressures: India has also faced inflationary pressures over the years, influencing the current unemployment rate in India. High inflation rates can erode the purchasing power of consumers, leading to reduced demand for goods and services. This can have a cascading effect on businesses, resulting in cost-cutting measures, including layoffs and hiring freezes, leading to higher unemployment rates.
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Periodic Labour Force Survey (PLFS) Annual Report 2022-2023 Released Increasing Trend in Labour Force Participation Rate and Worker Population Ratio Constant Decrease in Unemployment Rate

Considering the importance of availability of labour force data at more frequent time intervals, National Sample Survey Office (NSSO) launched Periodic Labour Force Survey (PLFS) in April 2017.

The objective of PLFS is primarily twofold:

• to estimate the key employment and unemployment indicators (viz. Worker Population Ratio, Labour Force Participation Rate, Unemployment Rate) in the short time interval of three months for the urban areas only in the ‘Current Weekly Status’ (CWS).
• to estimate employment and unemployment indicators in both ‘Usual Status’ (ps+ss) and CWS in both rural and urban areas annually.

Five Annual Reports covering both rural and urban areas giving estimates of all important parameters of employment and unemployment in both usual status (ps+ss) and current weekly status (CWS) have been released. These five Annual Reports are brought out on the basis of data collected in PLFS during July 2017- June 2018, July 2018-June 2019, July 2019-June 2020, July 2020 - June 2021 and July 2021-June 2022.

Now the sixth Annual Report is being brought out by NSSO on the basis of Periodic Labour Force Survey conducted during July 2022-June 2023.

PLFS fieldwork during July 2022 – June 2023

The field work for collection of information in respect of the samples, allotted for the period July 2022 – June 2023, was completed timely for the first visit as well as revisit samples, except for 51 first visit and 68 revisit FSUs for the State of Manipur, allotted in the last quarter i.e., April-June 2023, which were treated as casualties, due to disturbed field situation and unavailability of internet services.

Canvassing of revisit schedules is undertaken mostly in telephonic mode since June 2020 when field work was resumed after the suspension due to Covid-19 pandemic.

Sample Design of PLFS

• A rotational panel sampling design has been used in urban areas. In this rotational panel scheme, each, selected household in urban areas is visited four times, in the beginning with ‘First Visit Schedule’ and thrice periodically later with a ‘Revisit Schedule’. In urban area, samples for a panel within each stratum were drawn in the form of two independent sub-samples. The scheme of rotation ensures that 75% of the first-stage sampling units (FSUs) are matched between two consecutive visits. There was no revisit in the rural samples. For rural areas, samples for a stratum/sub-stratum were drawn randomly in the form of two independent sub-samples. For rural areas, in each quarter of the survey period, 25% FSUs of annual allocation were covered.

Sampling method

• Sample Size for First Visit during July 2022- June 2023 in rural and urban areas for the Annual Report: Out of the total number of 12,800 FSUs (7,024 villages and 5,776 UFS blocks) allotted for the survey at the all-India level during July 2022 - June 2023, a total of 12,714 FSUs (6,982 villages and 5,732 urban blocks) were surveyed for canvassing the PLFS schedule (Schedule 10.4). The number of households surveyed was 1,01,655 (55,844 in rural areas and 45,811 in urban areas) and number of persons surveyed was 4,19,512 (2,43,971 in rural areas and 1,75,541 in urban areas). Among the persons surveyed, total number of persons of age 15 years and above was 3,20,260 (1,81,049 in rural areas and 1,39,211 in urban areas).
• Conceptual Framework of Key Employment and Unemployment Indicators : The Periodic Labour Force Survey (PLFS) gives estimates of Key employment and unemployment Indicators like, the Labour Force Participation Rates (LFPR), Worker Population Ratio (WPR), Unemployment Rate (UR), etc. These indicators, and the ‘Usual Status’ and ‘Current Weekly Status’ are defined as follows:
• Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in labour force (i.e. working or seeking or available for work)in the population.
• Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
• Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labour force.
• Activity Status- Usual Status: The activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period. When the activity status is determined on the basis of the reference period of last 365 days preceding the date of survey, it is known as the usual activity status of the person.
• Activity Status- Current Weekly Status (CWS): The activity status determined on the basis of a reference period of last 7 days preceding the date of survey is known as the current weekly status (CWS) of the person.

The Annual Report on PLFS 2022-23 is available at the website of the Ministry( https://mospi.gov.in ). The key results are given in the statements annexed.

Key Findings of PLFS, Annual Report 2022- 2023

• Estimates of key labour market indicators in usual status (ps+ss)
• Increasing Trend in Labour Force Participation Rate (LFPR) for persons of age 15 years and above

In rural areas, LFPR increased from 50.7% in 2017-18 to 60.8% in 2022-23 while for urban areas it increased from 47.6% to 50.4%. LFPR for male in India increased from 75.8% in 2017-18 to 78.5% in 2022-23 and corresponding increase in LFPR for female was from 23.3% to 37.0%.

• Increasing Trend in Worker Population Ratio (WPR) for persons of age 15 years and above

In rural areas, WPR increased from 48.1% in 2017-18 to 59.4% in 2022-23 while for urban areas it increased from 43.9% to 47.7%. WPR for male in India increased from 71.2% in 2017-18 to 76.0% in 2022-23 and corresponding increase in WPR for female was from 22.0% to 35.9%.

• Decreasing Trend in Unemployment Rate (UR) for persons of age 15 years and above

In rural areas, UR decreased from 5.3% in 2017-18 to 2.4% in 2022-23 while for urban areas it decreased from 7.7% to 5.4%. UR for male in India decreased from 6.1% in 2017-18 to 3.3% in 2022-23 and corresponding decrease in UR for female was from 5.6% to 2.9%.

Principal activity status (ps) - The activity status on which a person spent relatively long time (major time criterion) during 365 days preceding the date of survey, was considered the usual principal activity status of the person.

Subsidiary economic activity status (ss) - The activity status in which a person in addition to his/her usual principal status, performs some economic activity for 30 days or more for the reference period of 365 days preceding the date of survey, was considered the subsidiary economic activity status of the person.

• Estimates of key labour market indicators in Current Weekly Status (CWS)

In rural areas, LFPR increased from 48.9% in 2017-18 to 56.7% in 2022-23 while for urban areas it increased from 47.1% to 49.4%. LFPR for male in India increased from 75.1% in 2017-18 to 77.4% in 2022-23 and corresponding increase in LFPR for female was from 21.1% to 31.6%.

In rural areas, WPR increased from 44.8% in 2017-18 to 54.2% in 2022-23 while for urban areas it increased from 42.6% to 46.0%. WPR for male in India increased from 68.6% in 2017-18 to 73.5% in 2022-23 and corresponding increase in WPR for female was from 19.2% to 30.0%.

In rural areas, UR decreased from 8.4% in 2017-18 to 4.4% in 2022-23 while for urban areas it decreased 9.5% to 7.0%. UR for male in India decreased from 8.7% in 2017-18 to 5.1% in 2022-23 and corresponding decrease in UR for female was from 9.0% to 5.1%.

Note: Detailed Results are available at the website of theMinistry ( www.mospi.gov.in .)

India Unemployment Rate

Unemployment rate in india decreased to 7.64 percent in march from 8.01 percent in february of 2024. unemployment rate in india averaged 8.17 percent from 2018 until 2024, reaching an all time high of 23.50 percent in april of 2020 and a record low of 6.40 percent in september of 2022. source: centre for monitoring indian economy, unemployment rate in india is expected to be 6.60 percent by the end of this quarter, according to trading economics global macro models and analysts expectations. in the long-term, the india unemployment rate is projected to trend around 6.90 percent in 2025 and 7.10 percent in 2026, according to our econometric models.,   markets,   gdp,   labour,   prices,   money,   trade,   government,   business,   consumer,   housing,   taxes,   health,   climate.

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India Unemployment Rate

• India Unemployment Rate increased to 7.11% in Dec 2020, from the previously reported figure of 5.27% in Dec 2019.
• India Unemployment Rate is updated yearly, available from Dec 1991 to Dec 2020, with an average rate of 5.66%.
• The data reached an all-time high of 7.11% in Dec 2020 and a record low of 5.27% in Dec 2019.
• The data is reported by reported by CEIC Data.
• In the latest reports, India Population reached 1,382.89 million people in Mar 2023.

View India's Unemployment Rate from 1991 to 2020 in the chart:

What was India's Unemployment Rate in 2020?

India Unemployment Rate increased to 7.11% in Dec 2020, from the previously reported figure of 5.27% in Dec 2019. See the table below for more data.

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19 charts that explain India’s economic challenge

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Attilio di battista.

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India has come a long way in modernizing its economy, reducing poverty and improving living standards for a large segment of its population.

Its economy has been one of the largest contributors to global growth over the last decade, accounting for about 10% of the world’s increase in economic activity since 2005, while GDP per capita in PPP (purchasing power parity) terms is today three times as high as in 2000.

Yet, this period also witnessed a rise in inequality, which has been mainly driven by income gaps between India’s states, and a growing urban-rural divide. India continues to have the largest number of poor in the world (approximately 300 million are in extreme poverty), and nearly half of the poor are concentrated in five states.

Growth has slowed in recent years and several challenges remain unsolved. Bringing more people into the process of generating growth and sharing the gains more widely will make India more resilient for the future.

The country is often cited as an example of an economy that is modernizing by jumping directly into services without passing through manufacturing. The weight of manufacturing in India has been relatively stable over the past two decades, at much lower levels than China and ASEAN countries. Business services – a high value added sector – represent a larger share of economic activity in India than in Europe.

Will India be able to achieve shared prosperity without a growing manufacturing sector? Agriculture accounts today for only 16% of total value added (down from 44% in 1965), but still employs about half of the Indian population. Productivity in this sector did not increase significantly in the past decades, limiting improvements in living standards in rural areas.

The competitiveness landscape

After five years of decline, India’s competitiveness improved notably this year as measured by the Global Competitiveness Report 2015-2016, where the country improves 16 ranks to 55th of 140 economies.

This improvement can be largely attributed to two main factors.

Firstly, macroeconomic conditions improved significantly. Inflation eased to 6% in 2014, down from near double-digit levels the previous year. The government budget deficit has gradually dropped since its 2008 peak, although it still amounted to 7% of GDP in 2014, one of the world’s highest.

Secondly, the country benefits from the momentum initiated by the election of Narendra Modi, whose pro-business, pro-growth, and anti-corruption stance has improved the business community’s sentiment toward the government. Infrastructure has also improved, but remains a major growth bottleneck. The fact that the most notable improvements are in the basic drivers of competitiveness bodes well for the future, but other areas also deserve attention, including technological readiness.

How inclusive is growth?

Despite India’s relatively strong record in terms of economic growth over the last decade, its middle class remains small and getting a job is no guarantee of escaping poverty.

India must take further action to ensure that the growth process is broad-based in order to reduce the share of the population living on less than $2 a day—many of whom are employed in informal and low skilled jobs. Educational enrollment rates are relatively low across all levels, and quality varies greatly, leading to notable differences in educational performance among students from different socioeconomic backgrounds.

The gender gaps in labour force participation and wages are both high, showing that India’s women are not benefiting equally from economic opportunities. India scores well in terms of access to finance for business development and real economy investment (investment channelled towards productive uses), yet new business creation continues to be held back by administrative burdens. India also under-exploits the use of fiscal transfers compared to peer countries.

Modernizing India’s public institutions

Modernizing public institutions has been high on the agenda of reforms in India in recent years, and results are starting to show. In 2015, businesses perceived lower levels of corruption among public officials and showed more trust in government’s decisions. Improved public institutions are one of the main drivers of the increase in India’s competitiveness. Yet, there is still a lot of ground to cover.

Talent, education and social mobility

Educational enrolment rates are relatively low across all levels: barely above the median for its peer group on pre-primary and primary, and below the median for secondary, vocational and tertiary levels.

Only 1.4% of secondary students are enrolled in technical and vocational programs, limiting the talent pool for skilled labor. The average level of education is only 7.3 years and a gender gap continues to persist, with boys benefiting from two more years of schooling than girls. India ranks 31st out of 37 lower middle income countries in providing equal educational opportunities for men and women, which translates into low levels of female participation in the labor force.

Unequal access to finance

India scores relatively well in terms of access to finance for developing businesses and investing in the economy. India’s entrepreneurs have better access to bank accounts, credit, venture capital, and equity markets than their counterparts in most peer countries. However, access to finance remains limited for low income individuals, especially women. 400 million people remain unbanked in India and disconnected from the financial system despite impressive gains in recent years . Most unbanked are poor and female: only 27% of individuals in bottom quintiles and 37% of women have access to a bank account. Finance can help poor households optimize severely constrained resources across their lifetime.

Barriers to Entrepreneurship

Yet, only 7% used their savings account to start a business (the proportion is even smaller for those in the bottom 40% of the income distribution). A last-placed ranking on small business ownership is evidently not for want of good ideas, as India scores fourth on a measure of patent applications. But budding entrepreneurs are held back by red tape and an inefficient justice system, with relatively low rankings for indicators such as the time and cost of starting a business, enforcing a contract and resolving insolvency.

Closing the infrastructure gap in India

Infrastructure development has not keep up with the increasing needs of the economy. Since 2007, the country slipped 14 ranks to 81st worldwide in terms of overall quality of infrastructure. In a recent report , the World Bank estimates that India might need up to 1.7 trillion dollars to close its gap in infrastructure development. Such a huge challenge cannot be borne by the government alone and will require more private investments and public-private partnerships. Private infrastructure financing totalled only 2.4 % of GDP per year on average from 2009-2013.

A quarter of Indians still do not have access to electricity and almost a third of the urban population live in slums. 65% of the population does not have access to improved sanitation and access remains unevenly distributed. This is also the case for clean drinking water.

Modernizing transport infrastructure will be particularly important to increasing India’s competitiveness. The airline sector is one of the weaknesses of India’s transport system. Operational airports are still out of reach for large parts of the country given that only half of Indian roads are paved, contributing to one of the highest accident rates in the world. On the flipside, the railway system performs relatively better than other modes of transport, traversing the country for approximately 65,000 kilometers (the fourth largest in the world). Nonetheless, investments are needed to improve the speed and efficiency of the system, especially within urban areas.

Connecting India

Despite many clusters of excellence in the IT industry and a vibrant service sector, India is not fully leveraging ICTs (information and communication technologies) for the benefits of its entire population. Regulation of the ICT sector is among the most competitive in the world and costs are low by international standards. Yet, the uptake of ICTs in India remains very low. Fewer than one in five Indians access the Internet on a regular basis, with only 1 percent of the population having fixed broadband (more worryingly, this figure has not gone up significantly in recent years). Smartphones are the privilege of the very few, with 5 mobile broadband subscriptions for every 100 population, while less than two in five Indians are estimated to own even a basic cell phone.

India has been slipping behind other countries in developing Asia over the last decade. Until 2007, internet usage was in line with the median performance of other economies in the region. Since then, countries such as Thailand and the Philippines have experienced a tremendous increase in the uptake of ICTs. Connecting India will mean investing in both physical and human capital to bridge the gap with other emerging markets. ICT could help fulfil India’s ambition to become a global manufacturing hub. Furthermore, ICT could do wonders in improving productivity in agriculture and the services sector, while boosting access to some basic services among the rural population.

India’s tax tystem and social safety net

Some countries effectively use redistribution to reduce inequality, but India is not among them. Its Gini coefficient (a measure of income distribution) is the second highest among lower middle income countries and is barely changed by fiscal transfers. Tax revenues are extremely low and India’s tax code is regressive, meaning that the poor bear a heavier burden than the rich, which is not offset by social spending. The country spends only 2.5% of GDP on social protection compared with over 6% in many peer countries.

India has a great deal of opportunity to enhance the generosity and progressivity of its social protection system so that it can give its citizens the safety net needed to take risks and participate fully in the economy and society.

Increasing its narrow tax base can also give India more fiscal space to make these much needed social expenditures, particularly in health. India’s public health system remains limited in coverage. Out-of-pocket expenses are high, limiting affordability. This translates into poor (and unequal) health outcomes. Inequality adjusted life expectancy is 25 years while in many peer countries like Thailand and Vietnam there is only around 10 years’ difference between high and low-income individuals.

The way ahead

To achieve both economic growth and social inclusion, India should focus on a number of areas of reform, including:

Authors: Gemma Corrigan, Economist, Economic Growth and Social Inclusion Initiative, Inclusive Growth, World Economic Forum. Attilio Di Batisto is a Quantitative Economist at the World Economic Forum.

Image: Passengers ride an overcrowded bus as they head towards their village to celebrate “Dashain”. REUTERS/Navesh Chitrakar

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Explained: The fall in unemployment rate in the 2020-21 labour survey, what it means

The annual report of the Periodic Labour Force Survey for July 2020 to June 2021 showed that the unemployment rate, as per usual status (reference period of last 365 days preceding the survey), eased to 4.2 per cent from 4.8 per cent in 2019-20.

Labour indicators recorded a sharp, all-round improvement in 2020-21 (July-June) compared with the previous three years, data released by the National Statistical Office (NSO) on Tuesday showed.

As per the current weekly status (reference period of one week) — contrary to perceived expectations of a likely hit on jobs — unemployment rate eased to 7.5 per cent in 2020-21 from 8.8 per cent. But there is a catch: while the overall employment situation showed improvement, the rise was seen mostly in low-quality, unpaid work.

The headline numbers

The headline employment numbers show an improvement in the employment situation.

The unemployment rate of 4.2 per cent in 2020-21, the lowest since the first PLFS showed an unemployment rate of 6.1 per cent in 2017-18. According to the report, the labour force participation rate (LFPR), or those working or seeking or available for work in the labour force, was the highest in four years at 39.3 per cent in 2020-21, as was the worker population ratio (WPR) at 36.3 per cent. WPR is defined as the percentage of employed persons in the population.

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The unemployment rate was higher for males in rural areas than females. In rural areas, the unemployment rate was 3.9 per cent in 2020-21, while that for females was 2.1 per cent. In urban areas, the unemployment rate for females was 8.6 per cent, while that for males was 6.1 per cent.

Rise of agricultural share, unpaid work

While the overall employment situation showed improvement, the rise was seen in low-quality, unpaid work.

Employment in the unpaid self-employed category continued to show an increase in 2020-21 by rising to 17.3 per cent from 15.9 per cent in 2019-20 and 13.3 per cent in 2018-19. Rural unpaid employment also showed increase to 21.3 per cent in 2020-21 from 20.0 per cent in the previous year, while that for urban areas increased to 6.3 per cent from 5.7 per cent.

Unpaid self-employment for females increased to 42.8 per cent in rural areas in 2020-21 from 42.3 per cent a year ago, while that for rural males increased to 11.0 per cent from 10.4 per cent.

In urban areas, unpaid self-employment for females showed a significant increase to 12.4 per cent in 2020-21 from 11.1 per cent in 2019-20, while that for males increased to 4.5 per cent from 4.1 per cent.

The PLFS data shows that the share of the labour force engaged in agriculture continued to show a rise in 2020-21, increasing to 46.5 per cent from 45.6 per cent in 2019-20 and 42.5 per cent in 2018-19 — a reversal of the decades-long decline in the labour force participation in agriculture.

This suggests that the movement of labour out of agriculture, which had gathered pace post 2004-05, seems to have been stymied by the economic slowdown and the pandemic. The reverse migration of labour from cities to villages would have only increased the pressure on agriculture to absorb the workers.

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The increase in share of agricultural employment was seen more for urban areas than rural areas. In urban areas, male employment in agriculture increased to 5.3 per cent in 2020-21 from 5.0 per cent in 2019-20, while that for females increased to 10.4 per cent in 2020-21 from 8.2 per cent.

In rural areas, both males and females recorded a slight moderation in agricultural employment to 53.8 per cent and 75.4 per cent, respectively, from 55.4 per cent and 75.7 per cent in the previous year.

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Aanchal Magazine is Senior Assistant Editor with The Indian Express and reports on the macro economy and fiscal policy, with a special focus on economic science, labour trends, taxation and revenue metrics. With over 12 years of newsroom experience, she has also reported in detail on macroeconomic data such as trends and policy actions related to inflation, GDP growth and fiscal arithmetic. Interested in the history of her homeland, Kashmir, she likes to read about its culture and tradition in her spare time, along with trying to map the journeys of displacement from there.   ... Read More

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India's unemployment rate remains high, worsened by Covid-19 pandemic

NEW DELHI - Engineering graduate Govind Mishra, 31, had dreams of earning a fat pay cheque in a regular office job after completing his Bachelor of Technology degree (BTech) a decade ago.

He had worked in the private sector as a data manager for four years but had no job satisfaction and was unable to sustain himself on 8,000 rupees (S$144) a month in New Delhi.

He then decided to try for a government job but was unsuccessful despite four years of sitting exams to qualify for a job. He is now back in his village helping in farm work, toying with the idea of starting a business like a village shop.

"I thought there was a value to BTech. But when you reach the job, you realise companies want totally different skills like (programming language) Java, which was not there in the syllabus," he said. "I will not apply for a job again."

Disillusionment among India's employable population, analysts said, was a worrying trend amid its unemployment problem.

India's labour force participation rate, which is the percentage of the population that is either working or actively looking for work, is 40 per cent, while the global rate is 60 per cent.

"It is not that everybody is hopeless. But people on the margins are losing hope and that is not a good sign," said Mr Mahesh Vyas, managing director of the Centre for Monitoring Indian Economy (CMIE).

Jobless growth in India was a problem made worse by the pandemic. Unemployment went up to 7.83 per cent in April, from 7.6 per cent in March, according to CMIE.

In 2019 to 2020, there were 442 million people in the labour force, and the number fell to 424 million the following year when India had a stringent Covid-19 lockdown.

As the economy started revving up on the back of pent-up demand, the number rose to 435 million people.

"It's a challenge pent-up demand can take care of to some extent. But the recovery is still ongoing. We are not employing as many people as (we were) pre-pandemic. We need more investments to happen and this is not happening," said Mr Vyas. "Going forward, the situation looks challenging."

Women, in particular, have been dropping out of the workforce in a trend that has continued to worry policymakers. Factors range from having to stay home to take care of children to not having enough job opportunities.

Job creation has not kept pace with the 12 million people who enter the workforce every year. This is due to falling investments, an education system seen to be out of tune with the growing economy, slowdown in the labour-intensive manufacturing sector and the service-driven economy.

Prime Minister Narendra Modi unveiled a Make in India programme in 2014 to push local manufacturing and create jobs. But the manufacturing sector has not yet taken off, making up just 17.4 per cent of India's gross domestic product in 2020.

And the situation among graduates is also grim. An Azim Premji University report said that unemployment among the well educated is thrice the national average.

Government think-tank NITI Aayog's vice-chairman Rajiv Kumar was quoted as saying early this year that 45 per cent of management students and 48 per cent of engineering ones were unemployed.

Mr Rishav Ranjan, national general secretary of Yuva Halla Bol, a national movement against joblessness, said: "This is a chain of unemployment which continues and never declines. The applicant pool is not declining because you have fresh graduates even if some have given up."

There is a greater demand for government jobs, considered to provide job security and prestige particularly in the central belt states, which lead India's demographic dividend.

Even though government recruitment has been falling, some 11,000 applicants, including law graduates, engineers and people with MBAs, showed up five months ago to apply for 15 job vacancies, including as an office helper and driver in Madhya Pradesh state.

"The pandemic where people lost jobs has made people want government jobs even more," said Mr Ranjan.

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Present Status of Unemployment In India – Explained Pointwise

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• 1 Present Status of Unemployment in India according to “State of Working India 2023” report
• 2.1 Types of Unemployment
• 3.1 Education and Skills Reasons
• 3.2 Social Reasons
• 3.3 Economic Structure reasons
• 4 Why addressing the present status of unemployment is crucial for India’s development?
• 5 What should be the way forward for addressing the present status of unemployment in India? 

Recently released report “State of Working India 2023” has higlighted the present status of unemployment in India. The report has been prepared by Azim Premji University’s Centre for Sustainable Employment. The report highlights the trends of Unemployment in India over the decade.

What is Unemployment, and what are the different types of Unemployment?

Definition- Unemployment refers to a situation where a person who is able and willing to work is not able to find a job. It is often used as a measure of the health of an economy, as high levels of unemployment can indicate a lack of available jobs, which in turn can lead to reduced economic growth and increased social and economic inequality.

Types of Unemployment

Read More- Unemployment Forum IAS

What are the reasons for present high unemployment in India?

The reasons behind the present status of unemployment in India are the following-

Education and Skills Reasons

Failure of Indian Education system – Although literacy rates have risen in the last few decades, there still remains a fundamental flaw in the education system in India. The degree-oriented system fails when it comes to producing skilled human resources for specific job profiles in the economy.

Higher educational level among youth – Youth unemployment has increased significantly from 2011-12 to 2021-22, nearly doubling during this period. As educational attainment improves , more educated individuals are less inclined to accept unskilled and informal jobs. This is the reason behind high unemployment among graduate youth.

Social Reasons

Joint Family System – It has encouraged disguised unemployment. In big families having large business establishments, many persons don’t do any work and are dependent on the joint income of the family. The joint family system is more prevalent in rural areas, with families employed in the agricultural sector.

Rush for government jobs for social prestige and security – Many educated youth are running behind government jobs due to social pressure, socially respected job profile and social security. This has to a situation where many students choose to remain unemployed during preparation for government jobs.

Low mobility of Labour due to social reasons – People generally avoid migrating to far-off areas of work due to factors like diversity of language, religion, customs and family loyalty . This low labour mobility has contributed to the high unemployment in India.

Expansion of social security measures – The government has increased the distribution of food under the National Food Security Act. This has reduced the pressure on individuals to immediately seek employment. It allows them more time to “search for work, ” which has also contributed to the increase in the unemployment rate.

Economic Structure reasons

Economic growth model promoting informal job creation like Gig Economy – Economic growth model of India has been tilted towards gig economy which is based on informal and contractual jobs. Thus, even though the workers have moved out of the agricultural sector, they have been absorbed in the informal and contractual employment as opposed to formal employment. Ex- Delivery boys, service providers.

The decline of Small Scale and Cottage Industries- Independent India’s preference to large scale industry and new industrial policy of the 1990s has resulted in the decline of small scale industries. This has resulted in high unemployment in rural areas.

Huge dependence on agricultural sector- Agriculture remains the biggest employer in the country. The seasonal nature of employment in the agricultural sector has led to recurring cycles of unemployment for the rural population.

Why addressing the present status of unemployment is crucial for India’s development?

Reaping the demographic dividend – India could get old before it becomes rich if the present status of unemployment is not addressed. The high unemployment in India will prevent us from reaping the benefits that our demographic dividend may provide.

Women’s Empowerment- Increasing the female formal job opportunities will lead to socio-economic upliftment of women in different fields.

Poverty alleviation-  Increasing formal employment and addressing the flaws in the informal sector jobs will help India alleviate poverty. This will improve the socio-economic position of the vulnerable sections of the society.

Lead India into the league of developed nations – Addressing the present status of unemployment is indispensable for leveraging the contribution of women and the youth. Both are crucial population segments which will propel India towards becoming a developed economy.

What should be the way forward for addressing the present status of unemployment in India? 

Need for National Employment Policy (NEP)- There is a need for formulation of National Employment Policy (NEP) that would encompass a set of multidimensional interventions ranging from social to economic issues.

Special packages for Labour Intensive Industries – Government must provide special packages for labour intensive industries like leather and footwear , food processing, furniture and home decor, textiles and apparel. These industries have high potential for generating more jobs per capital spent.

Focus on resource based development-   Decentralisation of Industrial activities based on resources will address the problem of labour mobility and provide employment opportunities in backward regions of the country like Jharkhand, Odisha.

Proper Implementation of New Education Policy – The proper implementation of New Education Policy will reduce the distance between Industry and academia. Incubation centers need to be promoted to cultivate original business ideas that will be financially viable for employment generation.

Removal of social barriers for more women participation- SHGs led women employment schemes like Kudumbashree must be promoted to break the social barriers for entry of women in job market.

Greater public investment – The government must make greater public investment in sectors like health, education, police and judiciary to create many government jobs and associated employment opportunities.

Proper Implementation of the government employment schemes – Government schemes like Atma Nirbhar Bharat Rojgar Yojana (ABRY), Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) etc. must be properly implemented for reducing the present levels of unemployment in India.

Source- Indian Express

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