Unemployment in India……The devil is in the detail

So this is yet another article written about unemployment in India.

Unemployment, a boring and yet uneasy topic for many as it brings us face to face with the harsh realities that we are confronting in India today.

A lot of us must be hearing about it in our daily lives, also facing problems due to it, gossiping about it amongst our friends and relatives and above all thinking that we have a fairly good idea as to why we are facing it in India and the ill effects that are being caused due to it.

However, do we really have an idea as to what impact unemployment in India is having on our lives? I don’t think so.

Some of us are well off and hold steady jobs and businesses. So we may be under the impression that unemployment doesn’t affect us. However, we are wrong. Unemployment in India is affecting all classes of people whether they are rich or poor. People who are doing well financially either through employment or business are also affected directly by this scourge ruining our country. Confused? Let me explain.

The first impact of unemployment is on our social lives. India being a young country has got individual who are full of aspirations. These aspirations stem from the fact that technology has exposed us all to the luxuries in life which we now see as a necessity. However, when one is unemployed, he is deprived of major sources of income. Without the back-up of the income needed to fulfill one’s aspirations, the person becomes susceptible to the evils in our society such as dishonesty, cheating, bribery, theft and other misdeeds. In order to survive, the person will indulge in these evils to make money and go on to fulfill his needs. These actions also add to the insecurity of the person and thus it becomes a virtual cesspool out of which he cannot come out even if he wants to. All of his actions are guided by his insecurity and greed to fulfill his ambitions. This is what we are seeing in India right now. Why do we have a declining political establishment? Why are new taxes being imposed upon us every day? Why the gap between the rich and the poor is widening so much? Why is the crime rate increasing all over the country? Try procrastinating over it and you will get the answer. Trust me; with the alarming levels of unemployment, we are headed for a social unrest which will catch us unawares and at that time it would be too late for us.

The purpose of this blog is not to indulge in scare mongering. The idea is make the readers identify with this problem so that they can contribute their bit in getting rid of it. For this we need to deeply study the causes of this problem and the solutions forthcoming with it. However, before proceeding further, it is important that we study the numbers first.

The population of India is currently above 131 crore. By the year 2022, we are expected to surpass China whose current population is above 170 crore. So in about five years, we will be the world’s most populated country housing more than 2000 ethnic groups’ right from Kashmir all the way to Kerala. Phew!!

Some more staggering figures await us. India has more than 50% of its population below the age of 25 and more than 65% below the age of 35. That means approximately 65 crore people are below 25 years of age and approximately 85 crore people are below 35 years of age. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan (source Wikipedia).

According to a Livemint report dated March 6, 2017, over 30% of youth aged 15-29 in India are not in employment, education or training.

According to a Kotak Securities report, India needs 2.3 crore jobs annually, but over the last 30 years, the country has created about seventy lac jobs every year.

Now unemployment is a very broad term. We also need to factor in another variable i.e. “under employment”. In India, the government is claiming that the unemployment rate is 5% (in 2015-16) which does not seem that alarming to us. However, this figure is a load of rubbish especially when you know how it is computed. This figure does not reflect the correct numbers or the reality of the situation.

The Labor Bureau of India essentially measures unemployment by a method called the Usual Principal Status (UPS) Approach. As per this approach, if anyone who has a job for 183 days or more during the course of the year, he is considered as employed. What does this mean? It means that an individual might have been unemployed for close to half the year but still would be considered to be employed. As per the Report on the Fifth Annual Employment-Unemployment Survey, 2016, around 35% of India’s work-force is employed only for 6 months and 4% are not employed at all. So essentially 60% of India’s workforce is employed but that does not mean that all of them have jobs. Majority of the people in this category are self-employed.

In India, we tend to romanticize the notion of being self-employed. We call ourselves a land of entrepreneurs. The Government also encourages the public that entrepreneurship is the way to go. However, the reality is that we are a land of reluctant entrepreneurs. Most of us will not admit it, but given a chance, we will gladly take up jobs if they were available in the county. As per the latest reports, more than 70% of self-employed people in India are earning below Rs. 10000 per month. Likewise, may people in this country that are holding jobs or work on daily wages are “under employed” and receive far less in wages than what they are supposed to.

Now that we have seen the extent of this problem, we need to ask ourselves why we are facing this problem. What can we do to tackle this menace?

One of the biggest reasons of unemployment is lack of quality education and vocational training institutes. Due to this, there is a huge shortage of skilled labor in this country. The rapidly increasing population is further diminishing the employment opportunities that come by. Many Indians are averse to taking jobs below their educational qualification which makes it difficult for them to find work. Big industries often look for skilled candidates which are again few in numbers. Furthermore, casual and contractual employment is replacing permanent jobs in the manufacturing sector because the companies are still dealing with anarchic labor laws which have lead to creation of contractual jobs instead of permanent employment. Agriculture remains the biggest employer in the country contributing to 46% employment but ironically the sector contributes a meager 12-13% to the country’s GDP. Moreover, our education infrastructure is ill-equipped to deal with the advancement of technology and automation in manufacturing and services. A prime example of this is the I.T. And telecom sector in India, where huge lay-offs are happening simply because of disruptive technologies that these companies are not able to cope up with.

So how do we tackle this problem?


We raise our voices and start making our present government accountable. We need to start creating forums where we address this issue and exchange ideas to empower individuals to come up with lasting solutions to unemployment. Some of the solutions that can be discussed in these forums are:

1. Increase in national wealth through industrialization and increased investment in heavy industries with focus on labor intensive technique.

2. Establishment of Vocational and Technical training institutes and manual labor should be made compulsory. Big factories should be attached to these colleges.

3. Revival of cottage and small scale industries is very important since rural areas have a lot of unskilled labor which can be put to use.

4. Improved transport and communication between rural and urban areas for less migration of skilled and unskilled labor.

5. Improved Infrastructure in Agriculture with good irrigation facilities and better farming equipment. Farmers should be made aware about multiple crop rotation and crop management techniques which will lead to year round increased production of crops, generating employment throughout the year.

6. Focused Policy on schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and Rajiv Gandhi Swavlamban Rozgar Yojna. The government should seek to streamline its implementation strategies so that the benefit from such schemes may be maximized.

Tackling unemployment is not a rocket science and if we continue to hammer the government of the day with the solutions proposed above, we will go a long way in dealing with this problem of unemployment.

As a self-employed person, I can empathize with whatever I have penned down in this blog. Unless unemployment problem is solved, the future of India cannot be bright. There will be no peace and prosperity in the country if the jobless people are not channelized properly.

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