Unemployment In India 2024

Introduction

The National Sample Survey Office (NSSO) performed the Periodic Labour Force Survey (PLFS) in 2023, and the results showed that India’s unemployment rate had decreased dramatically, reaching its lowest level in the previous three years.

Key employment and unemployment indicators such as the Worker Population Ratio (WPR), Unemployment Rate (UR), and Labor Force Participation Rate (LFPR) are estimated by the PLFS, along with the activity statuses of “Usual Status” and “Current Weekly Status.”

What is the Report on the Unemployment in India?

• India’s Unemployment Rate
  • In 2023, the unemployment rate in India for those over the age of 15 fell to 3.1%, which is the lowest level in the previous three years.
  • In 2022, the unemployment rate was 4.2%, whereas in 2021 it was 3.6%.
  • The female unemployment rate has decreased, from 3.3% in 2022 and 3.4% in 2021 to 3% in 2023.
  • Likewise, for men, it dropped from 4.5% in 2021 and 3.7% in 2022 to 3.2% in 2023.
• Recovery in Employment Scenario
  • Following the easing of state and federal lockdowns, there has been an improvement in the job situation following the effects of the Covid-19 epidemic.
• Urban and Rural Unemployment
  • Urban regions saw a fall from 5.9% in 2022 and 6.5% in 2021 to 5.2% in 2023, while rural areas had a decrease from 2.8% in 2022 and 3.3% in 2021 to 2.4% in 2023.
  • The LFPR in Current Weekly Status (CWS) for people living in urban areas who are 15 years of age or older increased to 56.2% in 2023, indicating a positive trend from 52.8% in 2022 and 51.8% in 2021.
• Economic Growth
  • This encouraging job figure follows other statistics that showed India’s economy grew by 8.4% in the third quarter of 2023–2024.
  • According to NSO statistics, industries including manufacturing, mining & quarrying, and construction were major contributors to this rise.
  • India’s growth is predicted by the NSO to be 7.6% for the whole fiscal year 2023–2024, which is higher than the first estimate of 7.3% given in January 2024.

Also read: Freedom of Press in India in 2023

What is Unemployment?

• When people who are capable of working actively seek employment but are unable to find acceptable positions, this is referred to as unemployment.
• A person who is in the labor force has the necessary abilities but is not actively working, is considered jobless.
• In essence, an unemployed individual is a person who is of working age, unemployed, able and willing to work, and actively seeking employment.

What is the Measurement of Unemployment?

• The following formula is frequently used to determine the nation’s unemployment rate:
• [Number of Unemployed Workers / Total Labor Force] x 100 equals the unemployment rate.
• The terms “total labor force” and “unemployed” are used interchangeably in this context. People who are not in the workforce—students, for instance—are not regarded as part of the labor force.

What are the Types of Unemployment?

• Structural Unemployment: This type of unemployment draws attention to structural problems in the labor market since it stems from mismatches between the skills held by the workforce and the needs of open positions.
• Cyclical Unemployment: This kind is cyclical; it rises in recessions and falls in expansions, demonstrating how sensitive labor supply is to broader macroeconomic factors.
• Frictional Unemployment/Transitional Unemployment: This sort of unemployment, also known as transitional unemployment, is a result of people naturally changing occupations and represents the brief time people spend looking for new possibilities.
• Underemployment: Although it’s not the same as unemployment, this idea refers to those who work in jobs that don’t fully utilize their abilities or don’t offer enough hours, which adds to the feeling of inefficiency in the economy.
• Hidden Unemployment: Refers to those who, for various reasons, such as discouragement, are not actively pursuing work but could do so if circumstances change for the better.
• Disguised Unemployment: It results from the factory/land employing more laborers than necessary. Productivity, or production per unit of labor, will thus be lower.

What are the Major Causes of Unemployment in India?

• Population Size
  • India has a large population, which increases competition for jobs and puts more strain on the labor market.
  • To effectively handle this demographic problem, economic development, and employment creation must be approached holistically.
• Skills Mismatch
  • One major reason is that labor force skills could not match the changing needs of the labor market. It will need measures to improve education and vocational training programs to address this issue.
• Informal Sector Dynamics
  • The predominance of the unorganized sector makes it more difficult to monitor and manage unemployment. A more realistic portrayal of working conditions may result in the formalization and regulation of this industry.
• Policy Implementation Challenges
  • Well-meaning policies may encounter difficulties in being implemented effectively, which might affect their capacity to create jobs. It is crucial to ensure consistency with ground realities and streamline the execution of policies.
• Global Economic Factors
  • Geopolitical changes and trade dynamics are two examples of how the global economy may influence India’s employment situation. It is crucial to create policies that increase the economy’s resistance to outside influences.

What are the Government’s Initiatives Related to Employment?

• Support for Marginalized Individuals for Livelihood and Enterprise (SMILE)
  • After the current schemes for transgender people and beggars were merged, a new scheme was created.
  • The plan calls for the rehabilitation of those who participate in begging to take place in the shelter houses already owned by the State/UT Governments and Urban Local Bodies.
  • If the current shelter houses aren’t available, the implementing agencies are required to provide new, purpose-built shelter homes.
• PM-DAKSH (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi)
  • The PM-DAKSH Yojana will go into effect in 2020–21.
  • This covers the provision of skill development training programs on entrepreneurship development, short-term training, up-skilling/reskilling, and long-term training to qualified target groups.
  • The Ministry of Skill Development and Entrepreneurship’s sector skill councils, government training institutes, and other reliable organizations are putting these training programs into action.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
  • One of the biggest employment guarantee programs in the world is MGNREGA.
  • The main goal of the program is to provide adult members of rural households who are willing to perform unskilled manual labor connected to public work with 100 days of employment guaranteed per fiscal year.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
  • The government formed the Skill India Mission in 2015, which oversees the administration of the main program, Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
  • By 2022, it hopes to have trained more than 40 crore Indians in a variety of skills. Its goal is to provide Indian youngsters with vocational training and certification so they may live better and be respected by society.
• Start-Up India Scheme
  • It was started in April 2016 to foster grassroots entrepreneurship with an emphasis on job creation and economic empowerment.
  • utilizing the institutional credit framework to connect with underrepresented groups of individuals, including women entrepreneurs, SCs, and STs.
• Rozgar Mela
  • The national government launched the Rozgar Mela as a means of giving the nation’s youngsters job opportunities.
  • Ten lakh positions in Group A and B Gazetted Posts, Group B Non-Gazetted Posts, and Group C Non-Gazetted Posts will be open for applications under the Rozgar Mela Scheme.
• Indira Gandhi Urban Employment Guarantee Scheme- Rajasthan
  • According to the Chief Minister, creative measures have been taken to execute the “Indira Gandhi Urban Employment Guarantee Scheme” in the state, modeling it after the “Mahatma Gandhi National Rural Employment Guarantee Scheme.” Approximately 1.5 lakh individuals have registered for the program thus far.

Way Forward

• Bringing education into line with the needs of the labor market by focusing on vocational training, encouraging lifelong learning to improve employability, and revising curricula to teach pertinent skills.
• Creating a supportive atmosphere for new businesses by cutting red tape, lowering costs, and supporting entrepreneurship via mentorship programs.
• Creating and executing policies that support the development of jobs, such as infrastructure spending, rules that favor company operations, and financial incentives.

Conclusion

India’s unemployment rate experienced a notable decline in 2023, reaching its lowest level in three years, indicative of economic recovery and positive growth trends. The report highlights various initiatives and strategies to address unemployment, emphasizing the importance of skill development, entrepreneurship support, and policy implementation. To sustain progress, continued efforts are necessary, including aligning education with market needs and fostering a conducive environment for business and job creation.

Frequently Asked Questions(FAQs)

Sources:

• https://www.forbesindia.com/article/explainers/unemployment-rate-in-india/87441/1
• https://en.wikipedia.org/wiki/Unemployment_in_India
• https://www.mospi.gov.in/sites/default/files/Statistical_year_book_india_chapters/ch32.pdf
• https://economictimes.indiatimes.com/news/economy/indicators/et-explains-is-unemployment-in-india-rising-or-falling/articleshow/106121701.cms?from=mdr
• https://www.thehindu.com/news/national/iim-study-points-to-structural-problems-in-indian-labour-market/article67857448.ece