Causes of unemployment in India

 

  • 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 in generating unemployment
    • In some locations, certain kinds of work are prohibited for members 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
  • Inadequate Economic Growth
    • Indian economy is underdeveloped and role of economic growth is inadequate
    • This slow growth fails to provide enough unemployment opportunities to the increasing population
    • This means that as the population increases, the economy cannot keep up with demands for employment and an increasing share of people are unable to find work. The result is insufficient levels of employment nationwide.
  • Increase in Population
    • India’s population is predicted to exceed China’s by the year 2024; it will, furthermore, probably be the most populous country for the entirety of the 21st century.
    • As the country’s economic growth cannot keep up with population growth, this leads to a larger share of the society being unemployed
  • Agriculture is a Seasonal Occupation
    • 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
  • 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 production of goods.
    • Oftentimes the demand for cheap, mass-produced goods outweighs the desire for goods that are handcrafted by those with very specific skill and expertise.
    • The result is that the cottage and small-scale industry have significantly declined, and artisans have become unemployed as a result.
  • 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 kickstarted
    • Also, there is lack of investment in rural areas and tier 2 and tier 3 cities as well, as a result of which there is exists large untapped employment potential
  • Ineffective (or absent) Economic Planning
    • Problematically, there have been no nationwide plans to account for the significant gap between labor supply (which is abundant) and labor demand (which is notably lower)
    • It is crucial that the supply and demand of labor are in balance, to ensure that those who need jobs are able to get them; otherwise, many individuals will compete for one job.
  • Labor Immobility
    • Culturally, attachment and maintenance of proximity to family is a major priority for many Indian citizens. The result is that people avoid traveling long distances from their families in pursuit of employment.
    • Additionally, language, religion, and climate can also contribute to low mobility of labor
    • As one might expect, when many of those who might otherwise be suited to jobs are unable to travel to reach them, unemployment is magnified
  • Job Specialization
    • Jobs in the capitalist world have become highly specialised, but India’s education system does not provide the right training and specialisation needed for these jobs. Thus many people who are willing to work become unemployable due to lack of skills.
  • Lack of essential skilling
    • A study reveals that 33% of educated youth in India are unemployed due to a lack of future skills
    • Millions of students in our country even after finishing schooling, remain devoid of hands-on learning and robust practical knowledge.