INTRODUCTION A CASE STUDY ON THE CAUSES OF UNEMPLOYMENT IN INDIA

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CHAPTER- I
INTRODUCTION
A CASE STUDY ON THE CAUSES OF
UNEMPLOYMENT IN INDIA

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1.1 INTRODUCTION
India is a developing economy and of the fastest growing economies of the world. The
problem of unemployment is considered to the biggest challenge to the development of
India. Unemployment leads to a waste of human resources.
The biggest problem in India is unemployment. It gets worse every single day. When
someone is actively seeking for a job but is unable to do so, they are considered to be
unemployed. Increased population, migration, a lack of technical skills and unbalanced
industrialization all contribute to higher unemployment. Mostly young people face the
problem of unemployment. Young people are a major human resource, key agents for
social change and driving force for economic development and technological innovation.
India has a considerable young population, hence unemployment among youth is the most
critical challenge of the 21st
century. There is a imbalance between employment
opportunities and increase in population. This has resulted in large scale unemployment.
Our country is set to be progressing by leaps and bounds in the matter of economy however
this progress is low sided that the net results is the sharp boost in the variety of jobless.
Population of our nation India is increasing day by day. It is the 2nd
highest populous nation
on the planet. Today we have more than 1.15 billion people in our nation and so is the
increasing unemployment rate. Today, we have actually both informed and ignorant jobless
individuals. We have knowledgeable and inexperienced unemployed youths both in urban
and the backwoods.
Even degree holders are unemployed. In India the problem of joblessness is extremely
severe. In the cities there are countless informed individuals who either have no task or are
required to use up some work which is not commensurate with their capabilities. In the
backwoods a great deal of people remain jobless for numerous months in a year.
Unemployment is not just a cause of hardship but likewise prevents chance to earn a
livelihood. In India the linkage in between hardship and unemployment is complex.
Unemployment rate is much lower that what would be expected given the extent of
hardship.
So, generally unemployed people are involved in unproductive work like gambling and
indulge in anti-social and anti-national activities.

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1.2 OBJECTIVES :
1. To analyze the causes of Unemployment in India
2. To examine the current scenario of Unemployment in India
3. To study the current Unemployment in India
4. To analyze the Government initiatives for reducing Unemployment in India
1.3 DATA AND METHODOLOY :
This study has made use of secondary data. The secondary data were drawn from various
reports published by govt. Of India. The main sources of data have been collected from the
various issues like- Centre for Monitoring Indian Economy ( CMIE ), National Sample
Survey Organization ( NSSO ) and other published reports of Govt. etc.
1.4 LIMITATIONS :
1. It is totally based on secondary data
2. Shortage of time to explore its source of data
1.5 CHAPTER DESIGN :
 Chapter-1 : It presents an overview of Unemployment in India. It also contains it’s
objectives, Data and Methodology, Limitations of the study.
 Chapter -2 : It contains Review if Literature.
 Chapter-3 : This chapter represents the Conceptual Review of the study.
 Chapter-4 : This chapter is based on Data analysis and Interpretation, It includes
tables and figures of data collected from online sources for the research paper.
 Chapter-5 This chapter includes Govt. Initiatives and Suggestions.

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CHAPTER – II
REVIEW OF LITERATURE

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2.1 REVIEW OF LITERATURE
Unemployment is a significant problem in India, affecting millions of people across the
country. There has been a significant amount of research conducted on this topic.
Abraham Vinoj (2009 ) shows that when there is a distress, level of income falls below the
sustenance level, and the proportion of population that is not working must enter the labour
market for supplementing the household income. The distress that most commonly occurs
in the agricultural sector leads to lower levels of productivity, lower income and stagnation.
The paper shows that the income crisis that gripped farming led to employment growth in
rural areas.
Bairagya Indrajit (2018 )shows that the rate of unemployment was higher among the
educated than the uneducated and the rate of Unemployment increases with higher
education levels. The paper analyzes the factors responsible for higher rates of
Unemployment in economy. The article proves that as levels of education becomes higher,
people tend to demand jobs with a good pay-scale and do not prefer jobs in the informal
sector. The paper reinforces the need to enhance capital formation in order to reduce
Unemployment rate in India.
Kumar Ashwani (2016 ) studied that Unemployment in India was a serious social issue. He
also stated that Unemployment reports in India were kept by Ministry of Labour &
Employment of India. He told about various types of Unemployment, its causes & some
solutions to curb it.
Jabir Hasan Khan & Shamshad (2012) found that the level of Unemployment was high in
Northern parts of India as compared to Southern parts of India.
Ritu & Naresh Kumar (2013 ) analyzed that Indian economy is the third largest economy in
the world but at the same time its growth is very slow. At the end, they concluded that
Unemployment can be reduced by expansionary fiscal policies.

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CHAPTER –III
CONCEPTUAL REVIEW

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3.1 MEANING OF UNEMPLOYMENT
Normally anyone, who is not gainfully employed in any productive activity, is called
unemployed. Unemployment could be voluntary or involuntary. However, there is no
scientific treatment with the help of which we can distinguish between voluntary and
involuntary unemployment. Generally speaking people in the age group of 15- 59 years are
considered to be in the working population of a country and the concept of unemployment
is restricted to this group of people only. That is, children and old persons are not included
in the definition of unemployment. However, some economists suggest a holder definition.
It should include
1. All persons ( men , women and children ) who are working and
2. Those not working, but are searching for work.
There may be some people who may be interested in jobs at wage rates higher than those
prevailing in the labour market. Persons failing in above two categories are called
voluntarily unemployed.
Involuntary unemployment is characterized by a situation in which people are prepared to
work at prevailing wage rate but they are not able to get employment.
The problem of unemployment in underdeveloped economics is different from that in
developed economics. In developed economics generally unemployment takes the form of
cyclical unemployment or frictional unemployment. Cyclical unemployment arises due to
cyclical movements in economics activities. Frictional unemployment takes place because
of shift to a new technology. Thus, cyclical and frictional unemployment are temporary in
nature.
On the other hand , the nature of unemployment in underdeveloped economics is basically
structural in nature. In an under- developed economy the demand for labour is less mainly
due to agricultural backwardness, undeveloped Industries and small size of the service
sector. Although the type of unemployment found in underdeveloped economics fits into
the definition of involuntary unemployment, is much different from the nature of
unemployment found in developed economics.

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3.2 NATURE OF UNEMPLOYMENT IN INDIA
In India, the problem of unemployment is much more serious than what we find in
developed economics. India is an underdeveloped though a developing economy. It is
important to emphasis that unemployment in underdeveloped economy like India is not the
result of deficiency in effective demand but in fact a result of shortage of capital equipment
and complimentary resources. In India there are various types of unemployment. Generally
speaking it takes the forms of rural unemployment and urban unemployment.
3.3 TYPES OF UNEMPLOYMENT
a) RURAL UN EMPLOYMENT:
The unemployment found in villages is called rural unemployment. Following are the types of rural
unemployment:-
1. Seasonal unemployment:- A large no. Of people remain unemployed during the slack
season or in the off season. Agriculture being a seasonal occupation, farmers have to depend upon
monsoon for cultivation. Majority of the labour force in the agricultural sector remain unemployed
for nearly 5-7 months in a year. Seasonal unemployment is also found in tourism, marriage bands,
sugar factories, ice factory, fisheries etc.
2. Disguised unemployment:- It is also known as invisible unemployment. Disguised
unemployment is generally found in villages in India. It is a situation in which more people are
doing work than actually required. Even if some are withdrawn, production does not suffer. In other
words, it refers to a situation of employment with surplus manpower in which some workers have
zero marginal productivity.
The excessive pressure on land leads to disguised unemployment in rural areas. It is estimated that
nearly 20% of the labour force is disguisedly unemployed in rural areas.
Joint family system, lack of alternative job opportunities result in overcrowding in agriculture.
These are the main reasons for disguised unemployment.

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b) URBAN UNEMPLOYMENT:
Urban unemployment refers to unemployment found in the urban areas i.e. towns and cities
of the country. Following are the types of urban unemployment:
1. Educated Unemployment: When people are educated and willing to work but do not get
jobs is known as educated Unemployment. This type of unemployment is found among
matriculates, undergraduates, graduates and post- graduates casual approach to education,
imbalance between job opportunities and no. of educated youth, preference for white collar jobs,
lack of employable skills, lack of awareness about available educational opportunities are the main
reasons for unemployment among educated youth in India.
2. Industrial Unemployment: It refers to unemployment in the industrial sector. The
unemployed workers may be skilled or unskilled. This is generally a form of open unemployment.
Slow industrial growth, rapid growth of population, lack of training facilities, low adaptability to
modern technology, inconvenient location of Industries, low mobility of labour etc. are the main
reasons for industrial unemployment.
3. Technological unemployment: Technological unemployment arises because of changes in
technology. Modern technology is capital- intensive and requires less labourers. When new
techniques are introduced in the industrial sector, existing workers are displaced from their jobs due
to lack of proper training, e.g. computerization, introduction of robotic technology.
4. Frictional Unemployment: Frictional unemployment is caused due to breakdown of
machinery, power failure, shortage of raw materials, strikes by workers etc. Frictional
unemployment is temporary by nature.
5. Cyclical Unemployment: cyclical unemployment is the result of cyclical fluctuations in the
level of business activity. The economy passes through phases of prosperity of depression, effective
demand falls which leads to a fall in the prices and profits earned by the producers.
As a result, there is a corresponding decline in investment and production of commodities. A fall in
production leads to a fall in employment. As a result, workers are thrown out of jobs during the
period of depression.
6. Structural Unemployment: This type of unemployment arises due to drastic changes in the
economic structure of a country. These changes may affect either the supply of or demand for a
factor of production. Structural changes in the economy are caused by changes in government
polices, shortages of capital, shifting of industry from one region to another etc. Structural
unemployment is a long- term phenomenon. Structural Unemployment takes place because of a
mismatch between the skills of workers and the jobs that are actually available, e.g.
1. Horse carts had been replaced by auto rickshaws,
2. Introduction of computerized typing has caused unemployment among manual typists.

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3.4 CAUSES OF UNEMPLOYMENT IN INDIA
Foregoing analysis about trends and structure of unemployment in India, reveals the
gravity of the problem. The causes of unemployment in India are:
1. Slow Economic Growth Process: It is no doubt that the problem of unemployment
is found in both developed as well as underdeveloped economics. Despite high incomes of
these developed economies, problem of Unemployment is prevalent there too. But the kind
of unemployment found in underdeveloped countries is basically due to its low levels of
development and slow growth process.
It is expected that as an economy grows, production expands and thus the end
opportunities. We find that in the past, after Independence there has been growth in
production. As a result, absolute level of employment has also risen. But rate of growth in
Production been less than the target. As a result, adequate number of employment
opportunities could not be created.
But we should also keep in mind that growth alone is not expected to solve the problem of
Unemployment. Some economics have hinted at a possible conflict between employment
and economic growth, in the early phase of development. In India also this conflict has
been apparent. In the early plans till sixth five year plan thus conflict was not recognized.
As a result, although absolute level of employment increased, it was hardly sufficient to
solve the problem of unemployment.
2. Increase in Labour Force: There has been significant growth in the labour force in
the last fifty years, due to fast growing population. Since Independence, death rate has been
declining very fast, without a corresponding fall in birth rate. As a result, population is
growing at a very high rate; at present rate of growth of population is around 2% . This is
naturally followed by fast expansion in labour force.
There is another factor, which has led to increase in labour force, due to urbanization and
changed attitude towards employment. After Independence, education among women has
led to change in attitude of woman towards employment. They now compete with men for
employment. This phenomenon is more prevalent in urban areas.

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The rapid growth in labour force can be ascribed to:
 Fast growing population,
 Changed attitude of women towards employed,
 Failure of growth process to create sufficient additional jobs.
All these factors have increased the problem of Unemployment -
3. Inappropriate Technology: In India is abundant while capital is a scare factor of
production. Therefore, to solved the problem of Unemployment, we need to adopt such a
technology, which makes use of more labour and less of capital to produce a given level of
output; But, it is unfortunate that not only in Industries, even in Agricultural production
capital is substituting labour very fast. This, capital- labour ratio has increased in
production process. Technological change has been labour- saving.
While making a choice about technology, normally western model is adopted. We
understand that in the west, labour is scare and can capital is abundant. Therefore, for them
appropriate technology is capital intensive. But in India we cannot justify the use of more
sophisticated and round about methods of production, which substitute capital for labour,
But adoption of such a technology has led to larger unemployment.
A pertinent question at this point is that why, despite abundance of labour, capital-
intensive technology is adopted in India. This happens because rate of return on capital and
labour are not market determined. While on the one hand, Labour is assured of minimum
wages, rate of interest is kept low arbitrary. As a result, people are inclined to make more
use of capital- intensive technology, as it is economically more viable.
4. The caste system:
 The caste system, a structure of social stratification that can potentially pervade
virtually every aspect of life in India is a major factor is generating unemployment.
 In some locations, certain kinds of particular castes. This also leads to the result that
work is often given to members of a certain community, rather than to those, who truly
deserve the Job those who have the right skills.
 The result is higher levels of unemployment.

5. Low rates of saving and Investment:
 India lacks sufficient capital across the board. Likewise, savings are low and the
result is that investment- which depends on savings- is also low.
 Were there higher rates of Investment, new jobs would be created and the economy
would have kick started.

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6. Ineffective ( or absent ) Economic planning:
 Problematically, there have been no nationwide plans to account for the signing gap
between labour supply ( which is abundant ) and labour demand ( which is notably lower ).
 It is crucial that the supply and demand of labour are in balance, to ensure that those
who need Jobs are able to get them, Otherwise, many individuals will compete for onr job.
7. Joint family system: Large family businesses may often involve family members
who depend on the family's joint income but do not contribute substantive work. Although
these individuals may appear to be working they may not actually add anything to the
business. The result is that their unemployment is “ disguised”.
Thus the family system may contribute to low productivity. However, this system also
numerous positive benefits as a social and economic safety net in which those who cannot
find work elsewhere can derive support from their families and contribute to their business.
It’s likely, then, that this system may offer more benefits than drawbacks.
8. Seasonality of Agricultural Occupations: Agriculture offers unemployment for a
large segment of the population, but only for several months out of the year. The result is
that for a considerable portion of the year, many agricultural workers lack needed
employment and income. More stable sources of income are essential to permit the
fulfillment of basic needs.
9. Gender disparities: Women are more likely to be unemployed than men in India.
This is due in part to cultural and social norms that limit women’s access to education and
job opportunities.
10. Poverty and Illiteracy: One of the main reasons for unemployment is due to a lesser
number of people being educated and literate. As they do not possess the skills necessary
for employment due to low levels of income and standard of living, they often find it
difficult to obtain jobs in the formal sector.
11. Inflation: A continuous rise in prices without a proportionate increase in goods and
services produced, leads to fall in real income in the hands of the public. When there is an
increase in population, supply of labour is greater than the demand which has an adverse
impact on wages. This leads to more people being unemployed as they are not satisfied
with the current wages being offered to them.

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12. Job specialization: Jobs in the capitalist world become highly specialized but in
India's education system does not provide the right training and specialization needed for
these jobs. Thus many people who are willing to work become unemployable due to lack of
skills.
13. Migration of rural population: There has been a continuous migration of people
from rural to urban areas in search of jobs. This has increased the problems of
unemployment in urban areas.
14. Lack of essential Skilling: A study reveals that 33% of educated youth in India are
unemployed due to lack of future skills.
15. Loss of small- scale/ cottage Industries: Industrial development has made cottage
and small scale industries considerably less economically attractive, as they do not offer the
economies of scale generated by large- scale mass introduction of goods.
3.5 EFFECTS OFUNEMPLOYMENT
 Loss of human resources: The problem of Unemployment effects loss of human
resources, labourers spend their maximum time in search of employment.
 Increase in poverty: Unemployment deprives a man of all sources of income. As a
result, he grows poor. Therefore, Unemployment generates poverty.
 Social problems: Unemployment breeds many social problems including
dishonesty, gambling, bribery, theft etc. As a result of unemployment, social security is
jeopardized.
 Political instability, Unemployment gives birth to political instability in the country,
unemployed persons lose all faith in democratic values and peaceful means.
 Exploitation of labour, In the state of Unemployment, labourers are exploited to the
maximum possible extent. Those labourers who get work have no work under adverse
conditions and low wages.

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 Young people after a long long time of Unemployment find the wrong way to earn
money.
 Unemployed youths accepts suicide as the last options of their life.
 Increase rate in crimes. As the employed youth don’t have anything to do they start
doing robbery, murder etc.
 Health issues ( i.e. ) it affects mentally as well as physically.
 The standard of living of people remains low because of unemployment.
 Unemployment aggravates social unrest and economic imbalance of the country.
 To get rid of the unemployment stress, they accept alcohol or drugs.
 Unemployment is the leading cause for depression among youth.
 Poor people, who are unemployed, finds it difficult to manage the rising cost to
manage the rising cost to basic necessities.
 Low capital formation, unemployed persons only increasing spending because they
are consumers. They don’t work or save money for investments. As a result, the rate of
capital formation is still low.
 Low productivity, there is a low level of productivity as a result of hidden
Unemployment. Low productivity translates to low growth rates.
 Greater Inequality, greater inequality in the distribution of income and wealth is
correlated with higher Unemployment rates. Growth does not occur with social justice
under such circumstances.
 Social conflict, Unemployment creates a rift between the wealthy and the poor in
society. As a result, class conflict worsens the issue of social unrest..
 Social unrest, Although there are likely many additional motivations for terrorism,
the role played by self- desperation is by no means less important.

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3.6 IMPACT OF UNEMPLOYMENT ON ECONOMY
1. Exploitation of labour: Due to unemployment labourers are exploited. They have to
accept low wages and work under un- favorable conditions.
2. Industrial disputes: Industrial disputes arise because of Unemployment. It has
adverse effects on employer- employee relations. Due to Industrial disputes, the
Unemployment rises.
3. Political instability: There is political instability in the country due to
Unemployment. Unemployed persons engage themselves in destructive activities. They
consider Government, worthless. Economic development becomes difficult under
conditions of political instability.
4. Social problems: Many social evils like dishonesty, gambling and immorality etc.
arise due to unemployment. It endangers law and order situation of the country. It causes
social disruption in the society.
5. Increase in poverty: Under the situation of Unemployment a man has no source of
income. Unemployment causes poverty, Burden of debt increases, Economic problems
increase.
6. Loss of human resources: Due to Unemployment, human resources go waste. No
constructive use of labour force is made. If human resources are properly used, economic
growth of the country will increase.
3.7 OTHER IMPACT OF UNEMPLOYMENT
 The government suffers extra borrowing burden because unemployment causes a
decrease in the production and less consumption of goods and services by the people.
 Unemployed persons can easily be enticed by antisocial elements. This makes them
lose faith in the democratic values of the country.
 Unemployment affects the Economy of the country as the workforce that could
have been gainfully employed to generate resources actually gets dependent on the

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remaining working population, thus escalating socio- economic costs for the state. For
instance, a 1% increase in Unemployment reduces the GDP by 2% .
 It is often seen that unemployed people end up getting addicted to drugs and alcohol
or attempts suicide, leading to losses to the human resources of the country.

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CHAPTER – IV
DATA ANALYSIS AND INTREPRETATION

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4.1 THE INDIAN SCENARIO
The huge population in India has led to a greater need for employment opportunities.
However, the jobs available are lesser than the number of job- seekers in the country. The
low level of education and vocational skills of the people have further led to an increase in
unemployment rate. The society does not receive adequate support from the government
and poor infrastructural facilities has created a situation of crisis in the economy. As India
is a developing country with a majority of population living in the rural areas, people are
more dependent on informal jobs that are irregular in nature with several health hazards. In
the primary sector, a low productivity and lack of alternative opportunities for agricultural
workers makes it difficult for transition from agricultural to industrial or services sector. A
lower investment and inadequate growth of the manufacturing sector also restricts its
employment potential.
The problem of unemployment leads to lesser rate of growth and development in the
economy. It increases the level of poverty and malnutrition due to low or no income for the
population, thus affecting the health status of the people.
4.2 CURRENT SCENARIO OF UNEMPLOYMENT IN INDIA
Among the states 2022, Haryana had the highest unemployment rate 37.4% followed
by Rajasthan at 28% , Delhi by 20.8% and Bihar by 19.1% . While Odisha had the Lowest
unemployment rate by 0.9% , followed by Gujarat by 2.3% , Karnataka by 2.5% and
Meghalaya by 2.7% .
As per the National Statistical Offices 16th
Periodic Labour Force Survey, in the fiscal
second quarter that ended on September 30, India’s unemployment rate for those who are
15 years of age or older and live in urban areas dropped from 9.8% to 7.2% indicating a
sustained recovery from the coronavirus pandemic that had left millions of people without
jobs.
From July to September, the unemployment rate for females (aged 15 and older ) in urban
areas dropped from 11.6% to 9.4% and for males dropped from 9.3% to 6.6% a year ago.

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4.3 MEASUREMENT OF UNEMPLOYMENT
In India, the problem of unemployment is of much larger magnitude than conventionally
measured unemployment. Persons belonging to low income households cannot afford to
remain unemployed and therefore they may be engaged in any work that is available, even
if it yields a very low income. Thus, rates of unemployment as measured conventionally
are deserved to be relatively low. We understand that in self- employed sectors and primary
sectors work sharing is very common. We also understand that in India these are the
dominant sectors in terms of number of labourers. Thus measures of open unemployment
are inadequate for the purpose of measuring and analyzing the problem of unemployment
in India. Giving recognition to this fact. National Sample Survey Organization ( NSSO )
provides estimates of magnitude of unemployment on the basis of three different concepts.
These three concepts of unemployment are as follows:
1. Usual Status (US) unemployment
2. Current Weekly status (CWS) unemployment
3. Current Daily status (CDS)
 Usual Status Unemployment: A person is considered to be unemployed on usual status
( US ) basis if he/ she was not working but was either seeking or was available for work
for a relatively longer time during the reference year. Usual Status unemployment rates
could be regarded as a measure of chronic unemployment during the reference year.
This measure provides the number of ( chronically or over a long period ) unemployed
persons. This is the narrowest concept of unemployment, as estimate of unemployment
given by this measure in lowest. This is obvious in a poor country like India, because
very few can afford to remain without work over a long period and they take any work
for short duration.
 Current Weekly Status Unemployment: In this measure reference period is one week- a
person is considered to be unemployed by current Weekly status ( CWS ), if he/ she
had not worked for even one hour during the reference week. CWS is also a measure or
chronic unemployment but with a reduced reference period. This again is a narrow
concept of unemployment but is little more comprehensive as compared to usual status
unemployment. According to this a person would be considered employed even if he
unemployed for six days of the reference week and for the seventh day he worked for
an hour. That is, a person according to this concept would be considered unemployed
only if he had not worked for a single hour on any day of the week, but was seeking
and available for work. It may be noted that this measure does not give number of
unemployed persons. It is a measure of unutilized time in terms of persons weeks.

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 Current Daily Status Unemployment: Estimate of current daily status unemployment is
made in terms of total person days of unemployment. According to this concept,
unemployment is measured as an aggregate of all the unemployment days of all persons
in the labour force during the week under reference. Since this estimate includes both
chronic unemployment as well as underemployment on weekly basis, this is the most
comprehensive measure. It may be noted that this measure does not give the number of
unemployed persons. It is a measure of unutilized time in terms of person days.
4.4 UNEMPLOYMENT RATE IN INDIA 2022- 2023
The centre for Monitoring Indian Economy ( CMIE ) , estimates India’s Unemployment
rate in India is around 7.45% at present. It is 7.93% in urban India, whereas only 7.44% in
rural India.
The following Table shows the month wise Unemployment in India in the year 2022, from
January 2022 to December 2022:
Month Unemployment Rate (%)
India Urban Rural
Feb-2023 7.45 7.93 7.23
Jan-2023 7.14 8.55 6.48
Dec-2022 8.30 10.09 7.44
Nov-2022 8.00 8.96 7.61
Oct-2022 7.92 7.34 8.19
Sept-2022 6.43 7.71 5.83
Aug-2022 8.28 9.57 7.68
July-2022 6.83 8.22 6.17
Jun-2022 7.83 7.32 8.07
May-2022 7.14 8.24 6.63
Apr-2022 7.83 9.22 7.18
Mar-2022 7.57 8.28 7.24
Feb-2022 8.11 7.57 8.37
Jan-2022 6.56 8.14 5.8
Table No -1( UNEMPLOYMENT RATE IN INDIA 2022- 2023 )

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8.50%
8.00%
7.50%
7.00%
6.50%
6.4
6.00%
Jan-2022 Apri-2012 July-2022 Oct-2012 Jan-2023
Fig. 1 Unemployment Rate In India 2022 - 2023.

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4.5 UNEMPLOYMENT RATE IN INDIA YEAR WISE
With an average of 8.22 percent during the years, India’s unemployment rate ranged from
a record high of 23.50% in April 2020 to a record low of 6.40% in September 2022. We
have listed the unemployment rate in India broken down each year below.
 In India, the unemployment rate in 2021 was 5.98%, a decrease of 2.02% from the
year before.
 In India, the unemployment rate for 2020 increased by 2.73% to 8.00%.
 In India, the unemployment rate for 2019 was 5.27% ,a decrease of 0.06% from
2018.
 India’s unemployment rate decreased from 5.33% in 2017 to5.33% in 2018.
Following Table shows unemployment rate in India year wise from the year 2000 to the
year 2021:
Year Unemployment Rate Percentage Change
2021 5.98% -2.02%
2020 8.00% 2.73
2019 5.27% -0.06%
2018 5.33% -0.03%
2017 5.36% -0.07%
2016 5.42% -0.01%
2015 5.42% 0.00%
2014 5.44% 0.01%
2013 5.42% 0.01%
2012 5.42% -0.12%
2011 5.43% 0.00%
2010 5.55% 0.13%
2009 5.54% -0.16%
2008 5.41% -0.03%
2007 5.67% -0.01%
2006 5.60% -0.02%
2005 5.61% -0.01%
2004 5.63% -0.11%
2003 5.53% -0.05%
2002 5.58% 0.01%
2001 5.56% -0.18%
Table No -2 (UNEMPLOYMENT RATE IN INDIA YEAR WISE )

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4.6 UNEMPLOYMENT RATE IN INDIA STATE WISE 2022
In India state wise 2022, Haryana had the highest unemployment rate at 3.74% , while
Odisha had the Lowest rate at 0.9%. seven additional states, including the capital of the
country, have double- digit unemployment rates in addition to Haryana.
The Following Table shows the unemployment rate in India state wise for the month
December of the year 2022:
State Unemployment Rate(%) State Unemployment
Rate(%)
Andhra
Pradesh
7.7 Pondicherry 4.7
Assam 4.7 Punjab 6.8
Bihar 19.1 Rajasthan 28.5
Chhattisgarh 3.4 Sikkim 13.6
Delhi 20.8 Tamil Nadu 4.1
Goa 9.9 Telangana 4.1
Gujarat 2.3 Tripura 14.3
Haryana 37.4 Uttar Pradesh 4.3
Himachal
Pradesh
7.6 Uttarakhand 4.2
Jammu &
Kashmir
14.8 West Bengal 5.5
Jharkhand 14.8
Karanataka 2.5
Kerala 7.4
Madhya
Pradesh
3.2
Maharashtra 3.1
Meghalaya 2.7
Odisha 0.9
Table No-3 (UNEMPLOYMENT RATE IN INDIA STATE WISE 2022

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4.7 YOUTH UNEMPLOYMENT RATE IN INDIA
The youth Unemployment rate refers to those in the workforce who are aged 15 to 24 years
and without a job, but actively seeking one.
Generally, youth Unemployment rates are higher than the adult Unemployment rates, and
India is no exception. Youth Unemployment in India is significant higher than the national
Unemployment rate.
 Youth Unemployment Rate In India In 2021:
In 2021, the estimated youth Unemployment rate in India was at 28.26%. For the past
decade India’s youth Unemployment rate has been hovering around the 22 percent mark.
Following Table shows the Youth Unemployment rate in India from the year 1999 to 2021:
Characteristic Youth Unemployment Rate
2021 28.26%
2020 24.9%
2019 22.74%
2018 23.05%
2017 22.28%
2016 22.24%
2015 21.74%
2014 21.22%
2013 20.68%
2012 20.17%
2011 19.66%
2010 19.47%
2009 18.94%
2008 18.5%
2007 18.11%
2006 18.07%
2005 18.1%
2004 18.16%
2003 18.2%
2002 18.14%
2001 17.89%
2000 17.83%
1999 17.75%

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1999 17.75%
2000 17.83%
2001 17.89%
2002 18.14%
2003 18.2%
2004 18.16%
2005 18.1%
2006 18.07%
2007 18.11%
2008 18.5%
2009 18.94%
2010 19.74%
2011 19.66%
2012 20.17%
2013 20.68%
2014 21.22%
2015 21.74%
2016 22.24%
2017 22.58%
2018 23.05%
2019 22.74%
2020 24.9%
2021 28.26%
0% 10% 20% 30%

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Fig. 2 (Youth unemployment Rate in India 1999 to 2021)
4.8 GOVERNMENT INITIATIVES AND POLICY MEASURES
The following are the initiatives taken by the government to increase employment
opportunities in the economy:
1. Swarna Jayanti Gram Swarozgar Yojana ( SGSY ): launched in April,1999 after
restructuring the Integrated Rural Development Programme( IRDP ) and allied schemes. It
is the only self – employment scheme for the rural poor in India.
2. Swarna Jayanti SahariRozgarYojana ( SJSRY ) : This scheme was launched in
December,1997. It provides gainful employment to the urban unemployed and
underemployed. It included self- employment, women self- employment programme, skill
training for employment promotion and urban wage employment programme. For this
scheme , central government shares 75% of the cost and state government shares 25% of
the cost.
3. Integrated Rural Development Programme ( IRDP ) : Launched in 1980, this
scheme aims to create full employment in rural areas.
4. Pradhan Mantri RozgarYojana ( PMRY ) : This scheme is being implemented since
1933, to create and provide sustainable self- employment opportunities to more than one
million educated unemployed youth.
5. National Skill Development Mission: National Skill Development Mission was
initiated after the Twelfth Five Year Plan emphasized on bridging the skill deficit needed
for jobs.
This programme aims to skill 500 million people by the year 2022. The prime minister's
national council of skill development was set up as an appex organization to frame policies,
give directions and provide vocational training in schools. To promote skill development in
rural areas, Apprenticeship Training Scheme ( ATP ) , Vocational Training Providers (
VTP ) and many other programmes were undertaken. Government has also decided to
transform public employment exchanges into career centers to provide guidance and career
counseling to young people. National Multi- skill Programme called skill India has been
launched which focuses mainly on entrepreneurial skill development.
The skill challenge becomes acute for India considering that the country has a large portion
of it’s population below 25 years of age.
Currently a major proportion of this population is not productively engaged in economic
activities due to a 'skills versus jobs requirement' mismatch which leads to economically
inactive working age group people affecting the economy and increasing unemployment.

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6. Employment Guarantee Scheme ( EGS ) : EGS was first introduced by the
government of Maharashtra on 28th
March 1972. This scheme was intended to provide
productive employment to the rural population and there by solve the problem of rural
unemployment and poverty. Under this scheme, government assures to provide minimum
employment opportunities. Due to it’s success in Maharashtra, EGS was implemented in
other states as well.
7. Mahatma Gandhi National Rural Employment Guarantee Act ( MGNREGA ):
MGNREGA, was enacted by the central government in 2005, aimed at improving living
standards of the rural poor and providing social security to them by giving the adult
members of every household at least one hundred days of guaranteed wage employment of
unskillful manual work in a financial year. The Act succeeded in generating employment in
more than 300 districts since it was launched. Since, 2nd
October 2009 , National Rural
Employment Guarantee Act has been renamed as Mahatma Gandhi National Rural
Employment Guarantee Scheme.
8. Ministry of Micro, Small and Medium Enterprises ( MSME ): MSME, regarded as
the engine of economic growth and development. In India, it has played a key role in
generating job opportunities and promoting self- employment. MSME Act 2006, facilitates
the development of both manufacturing and service sector and also enhances their
competitiveness. They are spread across the country and boost the manufacturing of many
products the promoting entrepreneurship and also provide services to meet the local market
needs. It is found that since they have limited financial resources they are unable to hire
skilled and specialized workforce.
This hinders technological advancement and expansion of the enterprise . Moreover, these
industries do not develop the skill set of the employed unskilled workforce thereby keeping
their employability low.
9. Training Rural Youth For Self-Employment ( TRYSEM ): It was initiated in 1979
with the objective of tackling unemployment problem among the rural youth. It aimed at
training about 2 lakh rural youth every year to enable them to become self- employed .
TRYSEM was managed into Swarnjayanti Gram Swarozgar Yojana in April 1999.
10. Jawahar Rozgar Yojana ( JRY ): On 1st
April 1989, the government announced a
new wage employment scheme , the Jawahar Rozgar Yojana for intensive employee
creation in 120 backward districts . It was restricted to rural area with effect from April
1999, it was renamed as Jawahar Gram SamrudhiYojana ( JGSY ).

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11. Deen Dayal Upadhyaya Grameen KaushalyaYojana 2014: It is the most important
placement linked skill training programme under the Ministry of Rural Development
announced on September 23, 20114.
The mission of this scheme is to reduce poverty as well ass provide gainful and sustainable
employment through regular wages. The focus of this programme is on the rural Youth
from poor families, in the age group of 15-35 years.
12. National Policy For Skill Development And Entrepreneurship-2015: The first
National Policy on skill development was notified in 2009 to promote private sector
participation via innovative funding models.
The objective of this scheme is to co- ordinate and strengthen factors essential for growth
of entrepreneurship across the country. This would include:
 Promote entrepreneurship culture.
 Encourage entrepreneurship as a viable career option through advocacy.
 Promote entrepreneurship among women.
13. Setup India Initiative: It was introduced in January 2016 with an aspiration to
impart more” strength and inspiration to the talented young generation of India to do
something new for India and humanity”.
14. Pradhan Mantri Kaushal VikasYojana ( 2016-20 ): The objective of this scheme is
to encourage skill development among youth by providing monetary rewards for successful
completion of approved training programmes. The government has allocated a budget of
12,000 crores till 2020 for implantation of the scheme.
15. Stand Up India Scheme: Launched in 2016, the objective of this scheme was to
provide bank loans from Rs.10 Lakh to Rs. 1 crore for at least one SC/ST borrower and to
minimum one woman borrower per branch of the bank to set up a Greenfield enterprise.

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CHAPTER –V
SUGGESTIONS AND CONCLUSION

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5.1 SUGGESTIONS
The following are the suggestions in order to reduce the problem of unemployment in India and to
improve the status of workers:
 Despite the measures taken by the government, India remains a country experiencing
severe unemployment problems. This section seeks to propose strategies for reducing
unemployment in India.
It is desirable to reduce tax rates and increase government spending which will eventually increase
the aggregate demand and the rate of economic growth. Lower tax rates increase the disposable
income of people and thus increase consumption and purchasing power leading to higher aggregate
demand ( AD ).
 The interest rates should be decreased which would lower the cost of credit and encourage
people to spend and invest. Also, the exchange rates would get reduced and which would lead to
increase export.
 Reduction of income tax would work as an incentive for the unemployed as well as
employed. It is an attractive proposition which motivates the unemployed to join the labour market
and the existing workforce to strive harder. Lower corporation Tax encourages the young
entrepreneurs to start their own ventures.
 Government should invest more in human capital development to increase the
employability in our country. It should also emphasis more on imparting quality education to the
people.
Education should be imparted in such a way that it should empower the youth with the necessary
skills which can make them employable.
 It has been observed that unemployment is especially concentrated in certain regions. In
order to overcome this geographical disparity, the government could incentivize firms to set up
operations in these areas by giving tax breaks . Alternatively, financial assistance can be provided
to unemployed workers who moved to established areas which have high employment.
 Vocation courses are recognized as an important part of under-graduation and post-
graduation collages. Government should emphasis in including these courses in the primary level
and makes it compulsory part of the curriculum so that people become proficient in their early stage
of life. Career counseling should be provided within the school and should reach all the students.

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 Population explosion is one of the most important factor for the present unemployment
problem, since the government may take an initiative for the awareness of population control
among the public’s.
 The government should open more training centers for vocational education. Young men
with special training from these centers can easily fit in any industrial undertaking.
 The government should try for rapid Industrialization in under- industrialized, regions of
the country and create more opportunities for employment.
 The village and cottage industry should be developed. If the villages become sufficient in
their economy the villagers would not run to the cities in search of jobs.
 Loan facilities should be extended among the unemployed youths, so that they may set up
small Industries
 Our young men should build up new Industries, form co- operative societies and go in for
agriculture.
 Labour- intensive technology has to be adopted by the formal and informal sectors in order
to increase employment opportunities in both rural and urban areas.
 On the job training and employment subsidies can be provided to the existing employees to
improve their current skills and to increase job satisfaction and reduce shift from one job to another.
5.2 CONCLUSION
Unemployment is the situation when people are unable to find a suitable job or any kind of
other occupation for earning the monthly income needed for the survival of their family. It’s time
for giving attention to this major issue of unemployment which can be the reason of destruction of a
family And our country.
Self-help is the best help. We must admit the bitter fact that no government can provide
employment to all the unemployed youths. Government measures cannot solve such as enormous
problem.
Still, the government should adopt measures to create opportunities for Self-Employment.