Indian Economic Problems

1. BCOP-306
Indian
Economic
ProblemBy Venus
(Asst. Professor)

2. Learning Outcomes
• At the end of the presentation you will be able to
understand the
o Meaning of unemployment
o Types of unemployment
o Steps taken by govt. to reduce unemployment
o Suggestions to solve unemployment

4. Meaning of
Unemployment
Unemployment
means a
situation in
which people
are willing to
work, at the
existing rate
of wage, but

5. Definition of Unemployment
Pigou
“A man is unemployed only
when he is both without a
job or not employed and
also desires to be

7. Open
Unemployment
Under
Unemployment
Educated
Unemployment
Industrial
Unemployment
Rural Unemployment
 Urban
Unemployment
Types of Unemployment

8. It means the person does not get employment at
all during the year. These person are willing to
work ,have necessary caliber, skill, capability, but
they do not find the work.
Open Unemployment
Under Unemployment
• It means the person gets employment for a few
months and remains unemployed for some months.
• It means person works at a job that is below his caliber
and qualification.

9. Seasonal Unemployment
It means a person is employed in a particular season and
is unemployed in another season. In India, it is very
common in agriculture. Here persons get work in
cropping and harvesting season and in other months of
the year, they remain unemployed. It is estimated that a
farmer who sows a single crop in a year remains
Disguised Unemployment
It refers to a state where more people are engaged in a
given job than really needed. If some of them
withdrawn from that job, it will not lead to any fall in
Total Output.

10. Educated unemployment
When educated people do not get job according to
their educational standard it is called educated
unemployment.
Industrial Unemployment
With the rapid growth of population and
urbanisation, more people seek employment in
industries. Because of seasonal nature of
agriculture, people from village come to urban
areas in search of industrial jobs. But industries in

11. Rural unemployment
It is characterised by disguised unemployment, seasonal
unemployment and under unemployment.
Urban unemployment
It is characterised by educated unemployment, open
unemployment and industrial unemployment.
Frictional Unemployment
This unemployment of temporary nature. It arises
due to market imperfections. When people shifts
one place to another and there they seek jobs;
there many be unfilled vacancies at that place ,but
it takes some time to match the unfilled vacancies.

12. Structural Unemployment
This unemployment is because of technology changes or
change in the demand pattern of goods. It is possible that
demand of new type of goods has increase or technological
advancement has taken place and labour does not have
right skills to manufacture new type of goods or work with
new technology.
Cyclic Unemployment
In every economy, trade cycles prevail, i.e. period of
boom depression. In the period of boom, there are
many economic activities. More persons jobs in the
period of boom. While in the period of depression,
there are lesser economic activities like decrease in
demand.

13. Statistics About Unemployment In India
• Unemployment Rate in India decreased to 4.90 percent in 2013
from 5.20 percent in 2012.
• Unemployment Rate in India averaged 7.32 percent from 1983
until 2013, reaching an all time high of 9.40 percent in 2009 and a
record low of 4.90 percent in 2013. Unemployment Rate in India is
reported by the Ministry of Labour and Employment, India.
• In 2017, the unemployment rate in India was estimated to
be 3.52 percent.

15. Causes of Unemployment in India
1. Rapid growth of population and increase in labour force.
2. Underdevelopment of the economy.
3. Agricultural is seasonal Occupation
4. Defective system of education.
5. FallofCottageandsmallindustries
11.Slowgrowthofindustrialisation
12.Inappropriate technology.
13.Lesssavingsandinvestment
14.Immobility of labour
15. CasteSystem

16. Steps taken by government to
increase employment
1. Swaran Jayanti Gram Swarozgar Yojana(SGSY)
• It is the single self employment programme for the rural poor. It was
launched in Apirl, 1999. It aims at establishing a large number of small
enterprises in the rural areas.
• SGSYcovers aspects like:
●
Organisationof Self-help groups
●
Planning of activity clusters or groups
●
Infrastructure building
●
providing credit and help in marketing
• This programme provides bank credit and government subsidy for starting a
business.
• The expenditure on SGSY is shared by the central and state government in
the ratio of 75:25.
• The SGSY is implemented by District Rural Development Authority through
the Panchayat Samitis.
• In the end of Sept 2011, 42.05 lakh SHGs have been formed benefitting 168.46
lakh swarozgaris.
• The SGSY has now been restructured as National Rural Livelihood Mission
(NRLM).

17. 2. Sampoorna Grameen Rozgar Yojana(SGRY)
• SGRY was launched on 1st Sept, 2001.
• The main objectives of this yojana are:
– To provide opportunity of employment to
surplus labour
– To provide food security
– Development of community, social assets and
economic assets
– Development of basic infrastructure
• The expenditure on this project is shared
by the central and state government in the
ratio of 87.5:12.5
• In this yojana part of wages are paid in
terms of food.

18. 3. Micro, small and medium enterprises
With a view to reducing unemployment, government has made
special efforts to develop micro, small and medium enterprises. In
2010-11, as many as 735 lakh persons were employed in these
industries. Special incentives are given to these enterprises in 11th
five year plan.
4. Development of organised sector
Many people are getting employed in organised public and
private sectors, such as, industries, mining, transport,
construction activities etc.
India's organised sector created a little over 1,100 jobs a day in
2016-17. The rate of job creation was 2 per cent higher than 2015-16.

19. Swaranjayanti Shahari Rozgar Yojana(SSRY)
This yojana provides employment to urban unemployed.
It came into operation from 1st december, 1997.
it comprises of two special schemes;
 Urban self employment programme(USEP)
 Urban wage employment programme(UWEP)
In urban self employment programme the person starts
his own work/business and earns profit while in urban wage
employment programme the person takes employment as
employee with some other person and get wage/ salary for
his work.
Of the total expenditure on "Yojana, 75 percent will be
borne by the centre and 25 percent by the state
governments. SSRY, 14.5 lakh beneficiaries have been
benefitted upto 31st March, 2013.

20. Jawahar Rozgar Yojana:
• The Jawahar Rozgar Yojana was started on 28th April 1989.
The objective of this Yojana is to provide employment to
at least one member of each poor rural family for fifty to a
hundred days a year at a work place near his residence. A
special feature of the scheme is that 30% of the
employment generated will be reserved for women.
• The Central government will finance 80% of the
programme and the state government will have to bear
only 20% of the expenditure of this scheme. In 1989,
National Rural Employment Programme and Rural Landless
Employment Guarantee Programmes were merged in the
yojana.

21. Integrated Rural Development
Programme (IRDP)
In 1978-79, government of India
introduced IRDP to create full
employment opportunities in rural
areas. Under this programme
agriculture, animal husbandry,
forests, fisheries, small and cottage
industries, construction of roads and
canals etc. are to be developed in all
the 5111 development blocks.
Moreover, to provide more
employment, in the Seventh Plan a
sum of Rs. 312 crores was spent on
this programme. It benefited 182 lakh
families. In 1995- 96 about 21 lakh
families have been benefited.

22. Employment in Foreign
Countries
Government also helps people to get employment aboard. Special
agencies have been set up to recruit people to serve in foreign countries
like Kuwait, Saudi Arabia, Iran, Canada, Australia, etc.
Self-employment to Educated
Unemployed Youth
In 1983, a scheme namely self-employment of educated unemployed
was initiated. Under this scheme, loans up to Rs. 25,000 are given to
those educated unemployed who have no other financial resources.
This scheme is enforced by District Industries Centers. Government will
give 25 percent as subsidy of the loans given by the banks under this
scheme.

23. Employment Exchanges
• Government has set up about 890 employment
exchanges offering information on the possible
vocational avenues. These exchanges do not provide
employment directly but are of great assistance in
directing the job-seeker to the possible areas of
employment.
Employment Guarantee Scheme
• This Scheme has been launched in main states, such as,
Maharashtra, West Bengal, Kerala, Rajasthan etc. Under
the scheme unemployed persons are given economic
assistance.

24. Other Programmes by govt. are:
• National Food for Work Programme
• Setting up SpecIial Economic Zones (SEZs)
• Developing Irrigation facilities
• Employment opportunities for Women
• Development of Information Technology Sector
• Modernization of Employment Exchanges
• Skill Development Initiative Schreme (SDIS)

25. Suggestions to Solve Unemployment
• Policy regarding seasonal unemployment
• Change in education system
• Expansion of Employment exchanges
• More assistance to self employed people
• Development of small and cottage industries should be encouraged.
• More importance to employment programmes
• High rate of capital formation
• Population control
• Decentralisation of industrial activity
• Increase in Investment
• Establishment of Power Houses in Villages
• Expansion of small irrigation facilities
• Promotion of Exports