The Causes of Unemployment and Inflation in India | AICTE approved B.school in Bangalore

Posted by Dr. Samiya Mubeen On 06/12/2021 09:58:11

Unemployment in India: Types, Measurement, and Causes
Unemployment may be defined as “a situation in which the person is capable of working both physically and mentally at the existing wage rate, but does not get a job to work”.

In other words, unemployment means only involuntary unemployment wherein a person who is willing to work at the existing wage rate does not get a job.

Types of Unemployment in India:

1. Open Unemployment:
Open unemployment is a situation wherein a large section of the labor force does not get a job that may yield them a regular income. This type of unemployment can be seen and counted in terms of the number of unemployed persons. The labor force expands at a faster rate than the growth rate of the economy. Therefore, all people do not get jobs. Top MBA colleges in Bangalore

2. Disguised Unemployment:
It is a situation in which more people are doing work than actually required. Even if some are withdrawn, production does not suffer. In other words, it refers to a situation of employment with surplus manpower in which some workers have zero marginal productivity.
So, their removal will not affect the volume of total production. Overcrowding in agriculture due to the rapid growth of population and lack of alternative job opportunities may be cited as the main reasons for disguised unemployment in India. AICTE approved MBA college in Bangalore

3. Seasonal Unemployment:
It is unemployment that occurs during certain seasons of the year. In some industries and occupations like agriculture, holiday resorts, ice factories, etc., production activities take place only in some seasons. So, they offer employment for only a certain period of time in a year. People engaged in such types of activities may remain unemployed during the off-season.

4. Cyclical Unemployment:
It is caused by trade cycles at regular intervals. Generally, capitalist economies are subject to trade cycles. The downswing in business activities results in unemployment. Cyclical unemployment is normally a shot-run phenomenon.

5. Educated Unemployment:
Among the educated people, apart from open unemployment, many are underemployed because their qualification does not match the job. The faulty education system, mass output, preference for white-collar jobs, lack of employable skills, and dwindling formal salaried jobs are mainly responsible for unemployment among educated youths in India. Educated unemployment may be either open or underemployment.

Causes of Unemployment in India

The following are the main causes of unemployment:
(i) Caste System:
In India caste system is prevalent. The work is prohibited for specific castes in some areas.
In many cases, the work is not given to the deserving candidates but given to the person belonging to a particular community. So, this gives rise to unemployment.

(ii) Slow Economic Growth:
Indian economy is underdeveloped and the role of economic growth is very slow. This slow growth fails to provide enough unemployment opportunities to the increasing population.
(iii) Increase in Population:
The constant increase in population has been a big problem in India. It is one of the main causes of unemployment. The rate of unemployment is 11.1% in the 10th Plan.
(iv) Agriculture is a Seasonal Occupation:
Agriculture is underdeveloped in India. It provides seasonal employment. A large part of the population is dependent on agriculture. But agriculture being seasonal provides work for a few months. So, this gives rise to unemployment. MBA colleges in Bangalore


(v) Joint Family System:
In big families having a big business, many such persons will be available who do not do any work and depend on the joint income of the family.
Many of them seem to be working but they do not add anything to production. So, they encourage disguised unemployment.
(vi) Fall of Cottage and Small industries:
Industrial development had an adverse effect on the cottage and small industries. The production of cottage industries began to fall and many artisans became unemployed.
(vii) Slow Growth of Industrialisation:
The rate of industrial growth is slow. Though the emphasis is laid on industrialization yet the avenues of employment created by industrialization are very few.

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