Unemployment in India

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Unemployment in India is a major social issue and unemployment records in India are kept by the Ministry of Labour and Employment.[1] As per the constitution of India, the responsibility to provide proper gainful employment lies with the state. As of September 2018, according to the Indian government, India had 31 million jobless people.[2] The numbers are widely disputed.


According to the National Sample Survey Office (NSSO) report, the unemployment rate was at an all-time high of 6.1 percent in 2017-18, the highest in 45 years. The report also says that male youth had an unemployment rate of 17.4 percent and 18.7 percent in rural and urban areas, while women youth had rates of 13.6 percent and 27.2 percent respectively in 2017-18. However, the think tank of Government of India, NITI Aayog says that these are not official and the data is not yet verified.[3] The employees in the country are estimated to grow by 8 million per annum for the next decade and a half, which is a little part of the job requirements in the economy, with a lot of workforce still finding employment.[4]

Union Ministry for Labour and Employment claimed national unemployment hovers around 3.7 percent in 2015-16. However, the data is based on usual principal subsidiary status (UPSS) approach that requires only 30 days of work in a year to call the person employed. 77 percent of the families reportedly have no regular wage earner and more than 67 percent have income less than 11,000 per month. Around 58 percent of unemployed graduates and 62 percent of unemployed post graduates cited non-availability of jobs matching with education/skill and experience as the main reason for unemployment. As per the National Skill Development Mission Document, as much as 97 percent of the workforce in India has not undergone formal skill training. About 76 percent of the households did not benefit from employment generating schemes like MGNREGA, PMEGP, SGSY, SJSRY, etc.

A significant change in inequality in income and wealth is possible only in a longer term prospective. Employment structure of an economy is the normal instrument that can cause a change in inequality either way i.e. an increase or a decrease in inequality. Since the government functions within the administrative and fiscal constraints, the target group programmes normally have a marginal impact on income redistribution. Income of labour enables flow of resources across income classes of people and across the social and ethnic groups. Flows of income across locations are influenced both by assets available and modes of creating employment opportunities. However, income generated by employment of migrant labour, facilitates flow of resources across regions of a given regional distribution of capital assets. Employment and equity of income across classes of people and across regions are therefore, closely related to each other in the long term.[5]

According to India Skills Report launched in the 3rd CII National Conference on Skill Development, 96 percent were found unemployable out of 100,000 candidates. The Report not only captured the skill levels of talent pool but also brought out the hiring estimates across major Industry sectors in the country. The report also brings out a general trend amongst the employers to look for skills rather than qualifications in candidates.[6][7] According to NSS (66th Round) Report from Ministry of Statistics and Programme Implementation, Government of India published on 2013[8]

In January 2019 the Indian government announced that the labour bureau job report would be replaced by the National Sample Survey Office periodic labour force survey. News reports suggest that the most recent labour bureau job report had been approved in December 2018, but its publication was withheld by the government.[9] Later in January 2019, two of the four members of the National Statistical Commission resigned because of alleged suppression of employment survey data.[10]

Causes of Unemployment in India[edit]

The rise in the unemployment rate can be traced to various factors.[11] First, farming has become very unattractive given the vicissitudes of the monsoon and government policy. A bad monsoon means lower crop output and income leading to farmer indebtedness and at the extreme, suicides. A good crop leads to prices coming down and with an ineffective minimum support price (MSP), farmers’ income tends to come down again leading to the same set of problems. Therefore, the children of farmers would rather not do farming and move over to the urban areas or look for jobs in the non-agricultural space. In a way, the disguised unemployment which was earlier there with excess hands working on a piece of land has officially become unemployed.

Second, with GST coming in, there has been an upheaval in the small and medium-sized enterprises (SME) space which was a major absorber of labour all through the years especially in rural areas. With forced recognition and opaqueness of processes, there has been unsettling of several self-employed leading to distress. Considering that this came on the back of demonetisation, it was but natural that this class got affected the most as the business went down.

Third, migration to urban areas has resulted in more jobs in the real estate construction sector which takes in unskilled labour. This has been the trend in the past. Now, 2017-18 was a year when Real Estate (Regulation and Development) Act, 2016 (RERA) was enforced post-demonetisation and there was a perceptible slowdown in the real estate sector, especially commercial and non-affordable housing projects. The stock of inventory tended to increase which slowed down the pace of new projects. This, combined with a slow pace of growth in private infrastructure, meant that these jobs also became scarce. Therefore, the intake of labour was restricted.

Fourth, the youth of today also has aspiration and often are unwilling to take on low-skill jobs once they have a recognised degree. However, given that the economy is not growing at the desired pace of 8 percent-plus in the last three years; demand for labour has been restricted to the higher-end—engineers, management graduates and other professionally qualified personnel. This makes a basic degree irrelevant for employment and while local laws ensure there is employment in supermarkets and e-commerce businesses, migratory labour is not within the perimeter.[12]

Steps taken by the Government[edit]

Mahatma Gandhi National Rural Employment Guarantee Act 2005

The Government of India has taken several steps to decrease the unemployment rates like launching the Mahatma Gandhi National Rural Employment Guarantee Scheme which guarantees a 100-day employment to an unemployed person in a year. It has implemented it in 200 of the districts and further will be expanded to 600 districts. In exchange for working under this scheme the person is paid 150 per day.[citation needed]

Apart from Employment Exchange, the Government of India publishes a weekly newspaper titled Employment News. It comes out every Saturday evening and gives detailed information about vacancies for government jobs across India. Along with the list of vacancies, it also has the notifications for various government exams and recruitment procedures for government jobs.

Steps taken on Disguised Unemployment

Agriculture is the most labour absorbing sector of the economy. In recent years, there has been a decline in the dependence of population on agriculture partly because of disguised unemployment. Some of the surplus labour in agriculture has moved to either secondary or the tertiary sector. In the secondary sector, small scale manufacturing is the most labour absorbing. In case of the tertiary sector, various new services are now appearing like biotechnology, information technology and so on. The government has taken steps in these sectors for the disguised unemployed people in these methods.[13]

National Career Service Scheme

The Government of India has initiated National Career Service Scheme whereby a web portal named National Career Service Portal (www.ncs.gov.in) has been launched by the Ministry of Labour and Employment (India). Through this portal, job-seekers and employers can avail the facility of a common platform for seeking and updating job information. Not only private vacancies, contractual jobs available in the government sector are also available on the portal.

See also[edit]


  1. ^ Papola, TS (1 May 2014). An assessment of labour statistics system in India (PDF). Country office New Delhi: ILO. Retrieved 9 November 2018.
  2. ^ "Unemployment Statistics". www.labour.gov.in. Ministry of labour and employment. Retrieved 9 November 2018.
  3. ^ Madan Sabnavis (31 January 2019). "NSSO data confirms India's jobs crisis: Unemployment at 45-year high of 6.1 percent, way out is to make economy grow". Retrieved 31 January 2019.
  4. ^ Tandon, Rajguru. "India Needs 10 Million Jobs Per Annum Till 2030 To Counter Unemployment". BW Businessworld. Retrieved 25 February 2019.
  5. ^ Bureau of Labour Statistics, Indian Government. (8 October 2010). "Report on Employment & Unemployment Survey (2009-10)" (PDF). Retrieved 29 March 2014.
  6. ^ The first India Skills Report 2014 launched
  8. ^ "Socio-Economic Profiles & Inter-State comparison of some Major States of India" (PDF). Economic Survey 2012-13, Government of India. 2012–2013. p. 276. Retrieved 21 April 2014.
  9. ^ "By hiding unemployment data, the government will not help the economy - or itself". The Telegraph. Calcutta. 17 January 2019. Retrieved 20 February 2019.
  10. ^ Daniyal, Shoaib (31 January 2019). "The Daily Fix: Modi government bid to hide unemployment rate, other key data hurts Indian democracy". Scroll.in. Retrieved 20 February 2019.
  11. ^ "Unemployment in India". digitalLEARNING. 8 December 2017. Retrieved 20 February 2019.
  12. ^ Madan Sabnavis. (31 January 2019). "NSSO data confirms India's jobs crisis: Unemployment at 45-year high of 6.1 percent, way out is to make economy grow". Retrieved 31 January 2019.
  13. ^ Employment News