International Review of Business and Economics
16. A STUDY ON THE CAUSES AND
IMPACT OF UNEMPLOYMENT IN INDIA
Ms. SHRUTI NAIR, Assistant Professor, Department of Economics, Ethiraj
College for Women, Chennai.
ABSTRACT of a shortage in capital equipment.
The rate of unemployment in India Unemployment leads to under-
has been increasing over the years. utilization of labour and human capital
The current paper aims to analyze the resulting in lower productivity in the
factors leading to unemployment and economy. This will further aggravate
its impact on the Indian economy. The poverty, malnutrition and lower per-
study focusses on how employment capita income of the population.
rate plays a major role in overall However, frictional unemployment
development of the economy. The can be present in the economy with
study makes use of secondary data the rate of unemployment from two
sources and focusses on the present to three percent and is unavoidable.
scenario of unemployment in rural and Despite the measures taken by the
urban areas. The paper analyzes how government to reduce unemployment
an increase in population, poverty, rates, there exists an increasing trend
illiteracy, inflation and lack of full in the rate of unemployment in the
employment can lead to a slowdown country.
in the growth of the economy.The
paper discusses the problems faced OBJECTIVES
by the economy due to high rate of 1. To analyze the current scenario
unemployment and recommends of unemployment in rural and urban
strategies to improve the current areas
status of employment in the country. 2. To identify the causes of
Keywords: unemployment, population, unemployment in India
growth, development 3. To recommend strategies for
improving the status of employment
INTRODUCTION in the economy
When a person who is actively searching
for employment is unable to find a REVIEW OF LITERATURE
suitable work, unemployment arises in Abraham Vinoj (2009) shows that
the economy. The Indian economy is when there is a distress, level of
facing a major slowdown due to the income falls below the sustenance
increasing rate of unemployment. As level, and the proportion of population
India is a developing economy, nature that is not working must enter the
of unemployment is quite different labour market for supplementing
from the scenario of unemployment the household income. The distress
prevailing in developed countries. In that most commonly occurs in the
India, unemployment exists in both agricultural sector leads to lower levels
rural and urban areas. The stagnant of productivity, lower income and
rate of growth and high rates of stagnation. The paper shows that the
unemployment occurs as a result income crisis that gripped farming led
Volume 4, Special Issue No.1, July 2020 98
, ISSN: 2474-5146 (Online) 2474-5138 (Print)
to employment growth in rural areas. GOVERNMENT INITIATIVES
BairagyaIndrajit (2018) shows that The following are the initiatives
the rate of unemployment was taken by the government to increase
higher among the educated than employment opportunities in the
the uneducated and the rate of economy:
unemployment increases with higher • Integrated Rural Development
education levels. The paper analyzes Programme (IRDP): Launched in
the factors responsible for higher rates 1980, this scheme aims to create full
of unemployment in the economy. employment in rural areas.
The article proves that as levels of • Training of Rural Youth for Self-
education becomes higher, people Employment (TRYSEM): Launched
tend to demand jobs with a good pay- in 1979, this scheme aims to make
scale and do not prefer jobs in the unemployed youth in rural areas
informal sector. The paper reinforces between 18-35 years to acquire self-
the need to enhance capital formation employment skills.
in order to reduce unemployment rate • Mahatma Gandhi National
in India. Rural Employment Guarantee Act
(MGNREGA): This scheme , launched in
THE INDIAN SCENARIO 2005, aims at providing social security
The huge population in India has led by guaranteeing minimum 100 days
to a greater need for employment of paid work in a year to families that
opportunities. However, the jobs have adult members opting for an
available are lesser than the number unskilled labour-intensive work.
of job-seekers in the country. The • Pradhan Mantri Kaushal
low level of education and vocational VikasYojana (PMKVY): The scheme
skills of the people have further led launched in 2015, aims to enable a
to an increase in unemployment rate. large number of youth in the country
The society does not receive adequate to take up skills training required for
support from the government and poor industries.
infrastructural facilities has created a • Start Up India Scheme:
situation of crisis in the economy. As Launched in 2016, the objective of the
India is a developing country with a scheme was to develop an ecosystem
majority of population living in the rural that promote entrepreneurship in the
areas, people are more dependent country.
on informal jobs that are irregular in • Stand Up India Scheme:
nature with several health hazards. In Launched in 2016, the objective of
the primary sector, a low productivity this scheme was to provide bank
and lack of alternative opportunities loans from Rs. 10 Lakh to Rs. 1 Crore
for agricultural workers makes it for atleast one SC/ST borrower and
difficult for transition from agricultural to minimum one woman borrower
to industrial or services sector. A lower per branch of the bank to set up a
investment and inadequate growth of greenfield enterprise.
the manufacturing sector also restricts
its employment potential.
The problem of unemployment leads to Table 1 shows that the rate of
lesser rate of growth and development unemployment is increasing over the
in the economy. It increases the level years and shows the rise in the trend
of poverty and malnutrition due to of unemployment from 2.2 per cent in
low or no income for the population, the year 2011 to 6.1 per cent
thus affecting the health status of the
people.
One Day Online International Conference Organised by IRBE Publications, Denver, USA 99
16. A STUDY ON THE CAUSES AND
IMPACT OF UNEMPLOYMENT IN INDIA
Ms. SHRUTI NAIR, Assistant Professor, Department of Economics, Ethiraj
College for Women, Chennai.
ABSTRACT of a shortage in capital equipment.
The rate of unemployment in India Unemployment leads to under-
has been increasing over the years. utilization of labour and human capital
The current paper aims to analyze the resulting in lower productivity in the
factors leading to unemployment and economy. This will further aggravate
its impact on the Indian economy. The poverty, malnutrition and lower per-
study focusses on how employment capita income of the population.
rate plays a major role in overall However, frictional unemployment
development of the economy. The can be present in the economy with
study makes use of secondary data the rate of unemployment from two
sources and focusses on the present to three percent and is unavoidable.
scenario of unemployment in rural and Despite the measures taken by the
urban areas. The paper analyzes how government to reduce unemployment
an increase in population, poverty, rates, there exists an increasing trend
illiteracy, inflation and lack of full in the rate of unemployment in the
employment can lead to a slowdown country.
in the growth of the economy.The
paper discusses the problems faced OBJECTIVES
by the economy due to high rate of 1. To analyze the current scenario
unemployment and recommends of unemployment in rural and urban
strategies to improve the current areas
status of employment in the country. 2. To identify the causes of
Keywords: unemployment, population, unemployment in India
growth, development 3. To recommend strategies for
improving the status of employment
INTRODUCTION in the economy
When a person who is actively searching
for employment is unable to find a REVIEW OF LITERATURE
suitable work, unemployment arises in Abraham Vinoj (2009) shows that
the economy. The Indian economy is when there is a distress, level of
facing a major slowdown due to the income falls below the sustenance
increasing rate of unemployment. As level, and the proportion of population
India is a developing economy, nature that is not working must enter the
of unemployment is quite different labour market for supplementing
from the scenario of unemployment the household income. The distress
prevailing in developed countries. In that most commonly occurs in the
India, unemployment exists in both agricultural sector leads to lower levels
rural and urban areas. The stagnant of productivity, lower income and
rate of growth and high rates of stagnation. The paper shows that the
unemployment occurs as a result income crisis that gripped farming led
Volume 4, Special Issue No.1, July 2020 98
, ISSN: 2474-5146 (Online) 2474-5138 (Print)
to employment growth in rural areas. GOVERNMENT INITIATIVES
BairagyaIndrajit (2018) shows that The following are the initiatives
the rate of unemployment was taken by the government to increase
higher among the educated than employment opportunities in the
the uneducated and the rate of economy:
unemployment increases with higher • Integrated Rural Development
education levels. The paper analyzes Programme (IRDP): Launched in
the factors responsible for higher rates 1980, this scheme aims to create full
of unemployment in the economy. employment in rural areas.
The article proves that as levels of • Training of Rural Youth for Self-
education becomes higher, people Employment (TRYSEM): Launched
tend to demand jobs with a good pay- in 1979, this scheme aims to make
scale and do not prefer jobs in the unemployed youth in rural areas
informal sector. The paper reinforces between 18-35 years to acquire self-
the need to enhance capital formation employment skills.
in order to reduce unemployment rate • Mahatma Gandhi National
in India. Rural Employment Guarantee Act
(MGNREGA): This scheme , launched in
THE INDIAN SCENARIO 2005, aims at providing social security
The huge population in India has led by guaranteeing minimum 100 days
to a greater need for employment of paid work in a year to families that
opportunities. However, the jobs have adult members opting for an
available are lesser than the number unskilled labour-intensive work.
of job-seekers in the country. The • Pradhan Mantri Kaushal
low level of education and vocational VikasYojana (PMKVY): The scheme
skills of the people have further led launched in 2015, aims to enable a
to an increase in unemployment rate. large number of youth in the country
The society does not receive adequate to take up skills training required for
support from the government and poor industries.
infrastructural facilities has created a • Start Up India Scheme:
situation of crisis in the economy. As Launched in 2016, the objective of the
India is a developing country with a scheme was to develop an ecosystem
majority of population living in the rural that promote entrepreneurship in the
areas, people are more dependent country.
on informal jobs that are irregular in • Stand Up India Scheme:
nature with several health hazards. In Launched in 2016, the objective of
the primary sector, a low productivity this scheme was to provide bank
and lack of alternative opportunities loans from Rs. 10 Lakh to Rs. 1 Crore
for agricultural workers makes it for atleast one SC/ST borrower and
difficult for transition from agricultural to minimum one woman borrower
to industrial or services sector. A lower per branch of the bank to set up a
investment and inadequate growth of greenfield enterprise.
the manufacturing sector also restricts
its employment potential.
The problem of unemployment leads to Table 1 shows that the rate of
lesser rate of growth and development unemployment is increasing over the
in the economy. It increases the level years and shows the rise in the trend
of poverty and malnutrition due to of unemployment from 2.2 per cent in
low or no income for the population, the year 2011 to 6.1 per cent
thus affecting the health status of the
people.
One Day Online International Conference Organised by IRBE Publications, Denver, USA 99
