Indian Economy
General Knowledge



» In common parlance anybody who is not gainfully employed in any productive activity is called unemployed. However, it can be of two kinds - (i) voluntary unemployed and (ii) involuntary unemployed. Here we are concerned with the second category of unemployed persons.
» Hence, unemployment can be defined as a situation when persons able and willing to work are seeking jobs at the prevailing wage level but they are unable to get the same.
» Unemployment in developing economies like India is not the result of deficiency of effective demand in the Keynesian sense, but a consequence of shortage of capital equipment or other complementary resources.'
» In India unemployment is structural in nature due to lack of productive capacity and resources.

Types of Unemployment

(i) Cyclical unemployment : It is the result of depression in an economy.
(ii) Frictional unemployment : This kind of unemployment is temporary. It is the result of a situation when new industries drive out old ones and workers change over to better jobs.
(iii) Open unemployment : It refers to those who have no work to do even though they are able and willing to do work.
(iv) Seasonal unemployment : This occurs at certain period of the work when work load is comparatively less, and hence people are rendered jobless. For example, in the period between past harvest and next sowing, agricultural labourers are unemployed.
(v) Educated unemployed : This is mainly found in urban areas. Those educated persons who are unable to get work come under this category.
(vi) Under-employment (Disguised unemployment) : It results when a person contributes to production less than what he or she is capable of, for example, an engineer working as a clerk is under employed.
(vii) Compulsory unemployment : It means the labour power which is ready to work on the current rate but does not get the work.
(viii) Seasonal unemployment : It means the unemployment of the farmers and farm labourers during non-crop seasons.

» During Ninth Plan, total 3.6 crore fresh unemployed began to look for employment.
» The Planning Commission collects data of unemployment on the basis of 'Lakadawala Formula' effective from 11th March, 1997 and prior to this the process to collect data was on the basis of surveys of National Sample Survey Organisation (NASO).
» In 8th Plan, the aim was to create 1 crore employment. During Ninth Plan the additional requirement of work opportunities was approximately 5 crore 30 lakhs.

» In India, the data relating to unemployment are collected by National Sample Survey Organisation (NASO). This Organisation has the following concepts with regard to unemployment :
  (1) General status of unemployment : In this category, generally, those unemployed for more than one year are included. As such it is a long-term unemployment.
  (2) Weekly-unemployment : The persons who have not got work for even one hour in a week are included in this category.
  (3) Daily unemployment : It is considered the best concept of unemployment.

» The main reasons for unemployment in India are slow economic development, population explosion, outdated technique, improper education system and limited effect of government planning.