Unemployment in India

Readers Question: Suggest how the current economic policy of India has reduced unemployment in the present scenario.

The estimated unemployment rate in India has fallen this year from 8% to 7%. However, it is worth bearing in mind, it is notoriously difficult to measure unemployment in India because of high levels of disguised or ‘under-employment’. Underemployment occurs when people are not classed as being unemployed, but, they make very little from their job.

A particular problem for the Indian economy has been the agricultural sector which has a high % of the workforce but is struggling to create sufficient jobs. This has led to a shift in the working population from rural to urban areas; and there is a difficulty in creating sufficient jobs for this new sector of the population.

Economic Growth and Unemployment

The biggest factor in helping reduce unemployment in India is probably the strong economic growth. India has seen growth rates reach 7%; this increased output is creating new demand. However, economic growth alone cannot solve India’s unemployment problem because the growth tends to benefit some sectors of the economy much more than others. The growth has failed to deal with rural poverty.

Skills and Structural Unemployment

For a developing economy, India has a relatively skilled population. For example, a high % are fluent in English. However, there are still a significant % of the population who lack basic education and skills (especially women). Therefore, to reduce structural unemployment, it is necessary for the Government to improve the quality of education and training, especially in rural areas.

Liberalisation of Markets

The liberalisation of markets has helped economic growth, but, labour still retains inflexibility and some sectors have struggled with the greater liberalisation of markets.


20 Responses to Unemployment in India

  1. Harmeet singh July 10, 2008 at 7:17 pm #

    there cant be solution by encouraging only skilled labour. 70% population rely on agriculture and there is lot of disguised unemployment. what if those labour taken out of fields, and them employ in roads contruction work in rular area. by which there marginal output will also increaced.

  2. angel August 27, 2008 at 9:38 am #

    People are more unemployed in rural areas. Thus government should establish industries in rural areas to decrease unemployment level.

  3. angel September 1, 2008 at 11:23 am #

    Unemployment can be decreased if some measure are taken to control population level in India.


  4. teluguguy April 5, 2009 at 8:24 am #

    what is the difference between natural rate of unemployment and cyclical employment?

  5. Ritu Raj Kalra May 13, 2009 at 10:44 pm #

    India’s unemployment can be easily solved if all the politicians who are elected to office are made to work without being paid for their complete tenure as that will make them feel the pinch and empathise with the downtrodden and as such it is necessary that people in India should make their politicians realise that politics is a public service and not a profession.

  6. amish May 20, 2009 at 6:49 pm #

    unemployment can be control by control on population…………..

  7. PD September 19, 2009 at 7:24 am #

    Instead of taking an emotional view about unemployment in India, the problem can be better solved by creating more demand in the market which large firms can do and also by raising the level of investment in the country. This needs savings on the part of the people. This will also indirectly help the poor as more investment means more circulation of money in the market which leads to more demand and thus creation of more jobs.
    Also, imports are necessary for a country’s economy but India would be better off importing cheaper goods. This will lead to lesser balance payments to other countries and the money could be used for the benefit of our country and the production of capital goods could create if not substantial but at least a certain amount of employment.
    Eradicating unemployment is a slow and gradual process and the government and people are doing a commendable job on their part. Maybe the effects are not immediate but it will definitely help the country come out of this problem in time.

  8. NAREN September 27, 2009 at 9:42 am #

    Plz submit the statistical numbers of unemplyoment for the last 10 years

  9. jasi November 10, 2009 at 7:31 am #

    please add databased deatails of unemployment

  10. srinivas March 6, 2010 at 10:11 am #

    Pls provide the statistics of present financial year and need to encourage the skill development training programme in every corner of the india

  11. keshab sunar April 9, 2010 at 7:38 am #

    unemployment refers that Anyone who is unable and willing to work but does not find work is involuntary unemployed. Unemployment in India is medium. India as a nation is faced with massive problem of unemployment. Also there has been a steady rise in the unemployees rates after 1990’s. Most of the person who are studying are not finding job. Due to Indian economy is low the unemployment still on India. A particular problem for the Indian economy has been the agricultural sector which has a high % of the workforce but is struggling to create sufficient jobs. The main cause of unemployment is over population. In India population is growing fastly. The biggest factor in helping reduce unemployment in India is probably the strong economic growth. Therefore to reduce unempoyment it is necessary for the goverment to improve the quality of education and training, especially in remote areas.

  12. Debasis Debbarma May 20, 2010 at 11:22 pm #

    ….Let us think positive for a while..!

    Why is population meant to be the reason for Unemployment??
    The main reason is laziiiiiiiiiiiiiiiness….!
    Let us not wait for the hen to lay eggs or the door to open without knocking..Instead , generate “self employment” by using our skill,talent and labour…

  13. abhishek June 4, 2010 at 7:04 am #

    what about educated one they too r not employed

  14. abc August 9, 2010 at 5:34 pm #

    well,what is disguised unemployment?

  15. Amit Kumar Sehgal September 28, 2010 at 10:42 am #

    hi ,
    My self Amit kumar sehgal. I want to make my career in stock broker and my family condition is not good plz tell me what should I do

    Amit kumar sehgal

  16. ulhas malunjkar October 6, 2010 at 10:43 am #

    can you show the graph in india for unemployment last 10 year

  17. yamini murugavel January 10, 2011 at 2:42 am #

    can tell me clearly abt what way the unemployment affects the indian economy???

  18. himani August 28, 2011 at 12:42 pm #

    great! and it helped me in making my project. thanks a lot!!!!!!!!!!!!!!!!!!!!!!!!!!

  19. bala October 24, 2011 at 8:24 am #

    i need educated youth unemployment data for past ten years .

  20. Murtaza Lokhandwala December 26, 2011 at 12:56 pm #

    greatt… supperbbbb … fantastic…….. it really helped me a lot in my project..thnxxx to ittt