Causes Of Unemployment In India: One of the most difficult problems for developed as well as developing nations to solve is the rising number of young people without jobs. The future prosperity and development of nations are impacted more broadly when people are unable to join the labor force. Because of this, employment and unemployment are major issues for global development.
In developing countries like India, the degree to which unemployment and poverty are associated is frequently the subject of significant discussion. India’s unemployment rate is much higher than that of developed nations because of its emerging economy. India’s rural and urban areas also endure high unemployment rates.
The economy’s sluggish growth and high unemployment rates are caused by a shortage of capital equipment. The underutilization of labor and human resources as a result of unemployment lowers economic production. Although there are many overlapping and interconnected reasons for unemployment in India, it is still possible to pinpoint a few major ones.
This article will make an effort to explain and lay out these causes, which range from more macro-level to more micro-level variables. To address this serious issue and build a society in which everyone can find a sustainable means of support for themselves and their families, it is important to first understand the causes of unemployment.
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Top 12 Causes of Unemployment In India
1. Overpopulation: In India, a major issue has been the ongoing population growth. One of the biggest reasons for unemployment is this. Over the past fifty years, the population has grown significantly. The nation has the second-largest population in the world after China, with more than 1.3 billion people.
By 2024, India’s population is expected to surpass China’s, and throughout the 21st century, it is likely to hold the title of most populous nation. An increasing proportion of the population is unemployed as a result of the nation’s economy not growing at the same rate as population growth.
2. Neglect of small-scale industries: Peasant farmers in rural India’s principal sources of income include clothing and cottage industries. Because of the lack of economies of scale brought about by large-scale mass production of commodities, industrial development has made small- and cottage-size businesses far less attractive from an economic standpoint.
The desire for things made by hand by persons with exceptionally specialized knowledge and abilities frequently loses out to the demand for cheap, mass-produced goods. As a result, craftspeople have lost their jobs, and cottage and small-scale industries have suffered greatly. Hence, an increase in India’s high unemployment rate.
3. Inflation: Unemployment in India is primarily a result of inflation. The public’s real income decreases as a result of ongoing price increases without corresponding increases in the output of goods and services. Because there is more labor available than there is demand for when the population grows, salaries are negatively impacted. Because they are dissatisfied with the pay being provided to them, this causes more people to be unemployed. The sad state or circumstance that India is currently in is as such.
4. Defective educational system: India’s educational system continues to be seriously defective despite an increase in literacy rates over the previous few decades. The program is mostly theoretical and lacks the practical training required to be in line with the current economic environment.
The degree-oriented system renders itself unnecessary when it comes to producing human resources who are adept at fitting into certain jobs inside the economy. Students should receive hands-on training in the classroom to prepare them for the workforce in the future. They should receive vocational training so they can become employable. If this is not the case, unemployment will occur.
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5. Biased distribution of land: Another factor contributing to the rise in unemployment in developing countries like India is the unfair seizure of land to prevent many farming families from having enough access to the land, which is a valuable resource for horticultural creation and work.
A few rural families’ access to land has also been restricted as a result of land subdivisions that began around 1951 in response to the pressure of rapid population growth. As a result, many people who previously worked independently in agribusiness are now landless horticulture workers who suffer the negative repercussions of severe unemployment and underemployment.
6. Inadequate employment planning: In comparison to the population increase, the government’s employment planning is insufficient. India’s population continues to grow annually. However, there was not a corresponding rise in employment possibilities to match the rate of population growth.
As a result, there is a noticeable disparity between population increase and work prospects. Providing everyone with access to suitable job opportunities, on the other hand, is a very challenging assignment for the government. In addition to this, the government also doesn’t make enough progress in this direction. The government’s poor employment planning significantly hastens the resolution of this issue. As a result, unemployment is becoming an increasingly serious issue.
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7. Slow Economic Growth: India now has a developing economy with extremely slow economic growth. The population is growing, yet there aren’t enough jobs available because of this slow growth. In other terms, this means that as the population grows, the economy cannot keep up with the demand for jobs, and a growing number of individuals are unable to find employment.
There are not enough jobs available nationwide as a result. This goes to show that when a country’s economic activity increases, economic growth increases.
8. Caste System: One of the key elements causing India’s high unemployment rate is the caste system, a social stratification structure that can affect almost every aspect of life. In India, the caste system has spread widely. A certain caste may not practice a particular occupation in some regions. Additionally, as a result of this, people from a certain community frequently receive job opportunities instead of others who are deserving of them and have the necessary abilities.
Higher unemployment rates are the end outcome. India’s poverty is also greatly influenced by the caste system.
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9. Use of capital-intensive technique: The use of capital-intensive production techniques, particularly in sectors producing consumer products where alternative labor-intensive techniques are available, has been a significant contributor to the slow development of employment.
In agriculture, for instance, heedless mechanization of various agricultural tasks despite the presence of surplus labor has diminished the employment-augmenting benefit of new high-yielding technology involving the use of HYV seeds, fertilizers, and pesticides. As a result, there aren’t enough jobs being created in rural areas.
10. Lack of infrastructure: Just like the use of capital-intensive techniques mentioned above, another major cause of unemployment in India is the lack of infrastructure. The absence of infrastructure, including roads, power, telephones, motorways, and irrigation facilities for agriculture, is a similar issue contributing to the high unemployment rate in these countries. The creation of chances for productive employment is severely hampered by the inadequate availability of infrastructure.
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11. Low Rates of Saving and Investment: India lacks adequate money on a national level. Due to this, savings are low, which causes less investment. Higher investment rates would allow for the creation of new jobs and a boom in the economy.
Additionally, there is a dearth of investment in rural areas and second- and third-tier cities, which results in significant unrealized job potential.
12. Immobility of the Labour: For Indian citizens, attachment to and maintenance of closeness to family are crucial. People fear moving far away from their families in search of employment as a result. Language, religion, and climate all have a significant impact on how mobile the labour force is.
As a result, those who may otherwise be qualified for the positions are unable to go to them, which increases unemployment.
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Unemployed people are those who are unable to obtain employment despite their eagerness to do so. Numerous things, such as a lack of education and training, an imbalance between the supply and demand of labor, and others, may be to blame for this. It may cause a country’s demographic dividend to become its demographic burden. It is essential for the government of all countries, India inclusive to work on improving their employment rate. This is because the employment rate is essential to the health of any country’s economy since those who are employed may boost it and make use of its resources.
Edeh Samuel Chukwuemeka ACMC, is a Law Student and a Certified Mediator/Conciliator in Nigeria. He is also a Developer with knowledge in HTML, CSS, JS, PHP and React Native. Samuel is bent on changing the legal profession by building Web and Mobile Apps that will make legal research a lot easier.