By:-RAHUL KUMAR MISHRA||14 - Aug - 2019


India is achieving an impressive economic growth in recent years, but on the basis of creating employment, it is too far to gain from its economic growth. Every year, a lot of persons are added in Unemployment list. Their purchasing power is not starting. This a main bone of contention for employment. India is producing countless graduates every year, but those graduates don’t find jobs as per their Excellency.

Unemployment is a circumstances where a person is capable of employment and searching jobs but he is unable to find job. People who are not fulfilled their eligibility as per their physical condition and are not interested for doing jobs, are out of such calculation for unemployment.

To count as unemployed, out of work employees must have these three qualities:

They are not working, even part time or temporary.

They are available to work.

They actively looked for work in the past weeks.

Sometimes Underemployed workers have jobs, but they are not working to their full capacity or skilled level. It includes those who works part time but want to work full time. They are not utilizing their time and skill properly.


Natural Unemployment:

It would be available in a healthy economy. The lowest level of unemployment was 2.5 %. Agriculture and Tourism are struck in this unemployment. It offers employment for a certain period in a year. People who engaged such sector, would remain unemployed during the off-season.

Structural Unemployment:

It denotes a situation when structure of economy is changed. Automation in car production has been changed with traditional machines. Traditional machine’s employee either would upgrade, or set themselves in the list of unemployment. Such workers are deficient knowledge about new technology.

Voluntary Unemployment:

It is a situation where workers either not seeking work or are in transition from job to another. This unemployment remains in an economy any time. A lot of people who quit their jobs for searching new one.

Involuntary Unemployment:

It refers to a situation where workers are seeking work and willing to work but unable to find work. It happens in an economy during the time of depression and fall in demand for goods and services.

Cyclical Unemployment:

Such Unemployment is available in the economy when nation’s economy is not doing well. Due to low demand of goods and services, it leads unemployment. Recessions affects most for cyclical unemployment.


It is a situation under which people with higher level of skills are employed with low level of skills. People fails to utilize their capacity.


Employment – Unemployment Survey

The Employment-Unemployment Survey (EUS) is a household survey providing labour force statistics in India. It is carried out over a period of 12 months to count for seasonal variations in employment. The National Sample Survey Organization (NSSO) provides three different estimates of employment and unemployment based on different approaches / reference periods used to classify an individual’s activity status. These are:

Usual Status Approach:

It is referred for 365 days preceding the date of the survey. It is recoded only those persons as unemployed who had no gainful work for a major time during the 365 days. It is sought available work for unemployed persons.

Current Weekly Status Approach:

Its period is all seven days in a week preceding the date of survey. In this approach, current activity status is related to the week preceding the date of survey. It is recorded for those persons who have no gainful work even for an hour on any day.

Current Daily Status Approach:

It is referred period for each day preceding date of survey. It is recorded a person who employed even if he works only for an hour on any day of the whole week. It is adopted as a unit of measurement. A person who works for 4 hours or more up to 8 hours on a day, is considered employable.

Payroll Reporting

Since April, 2018 the Ministry of Statistics and Programme Implementation (MoSPI) has been bringing out the employment related statistics in the formal sector covering the period September 2017 onwards using payroll reporting. It uses the information on the number of subscribers who have subscribed under three major schemes:-

The Employees’ Provident Fund (EPF)

The Employees’ State Insurance (ESI)

The National Pension Scheme (NPS)


Creation of employment opportunities depends on the volume and composition of economic activity in the economy. The total output of goods and services in the economy (Gross Domestic Product) and its structure. Factors those affect this basic relationship are:

Availability of Capital (Money)

Availability of Skills and expertise among the employed persons

The manner in which Capital and Labour combine to produce the output of goods and services.


India’s total workforce is about 52 crore. Nearly 49% of total workforce is employed with agriculture, but it contributes only 15% of Gross Value Added (GVA). Industry and services spread themselves for 13.7% and 37.5% respectively. It makes 23% GVA for Industry and 62% GVA for services. Micro and Small-sized firms tops in giving employment. It provides employment 92% of all workers.

The current Periodic Labour  Force Survey (PLFS) 2017-18 tells that the unemployment rate (UR) in both rural and urban India is at its highest since 1972 and pegs the countrywide unemployment rate at 6.1%.


Large Population Size

It is one of the most common reason for the unemployment. There is huge difference between high birth rate and low death rate. This gap is scaling new height of population. It always creates pressure on the government.

Slowdown of Economic Growth

GDP growth slows down consecutive 2 years from 8.2% to 6.8%. It hit most because of bad agriculture years, high oil prices, banking sector crisis, unpredictable situation raised by trade war between the U.S. and the China, Brexit. Conflict between Iran and U.S. affects directly to India for exports.

Leapfrogging from Agriculture Sector to Service Sector

Leapfrogging of Indian Economy from agriculture led growth to service sector growth with inadequate acceleration of manufacturing sector. Low investment in manufacturing sector restricted the job market in secondary sector. The growth of technology based sectors is hampering the job ecosystem as new jobs are being created either by replacing the existing ones or by generating new skilled jobs.

Skill Gap and Mismatch

Skill Gap and Mismatch between the available workforce and the demand of industry due to illiteracy and academic qualification. Indian Skills Report 2018 indicated the only 46% of youth coming out of higher educational institutions are employable.



The government has put in place a policy ecosystem around several schemes to help generate employment and it includes:

Wage Employment

Government has taken initiative for Wage Employment through Mahatma Gandhi National Rural Employment Gaurantee Scheme, Prime Minister’s Employment Generation Programme and Pradhan Mantri Rojgar Protsahan Yojana, Digital India etc.

Self- Employment

Government is providing opportunities by providing basic requirement of skill, finances, clearances and favourable ecosystem to start a new business through schemes like Mudra Yojana, Atal Innovation Mission, National Urban Livelihood Mission, Skill India Start-up India and Stand-up India etc.

Development Schemes

Development Schemes like Pradhan Mantri Gram Sadak Yojana, Smart Cities, AMRUT, Hunnar se Rojgar tak etc. are also providing indirect employment.

Labour Market Information System

This System is important for identifying skill shortages, training needs and employment created, has been made functional.


Enhance Skills and Apprenticeships

Government should provide such training programme to enhance skills and apprenticeships. It was ensured the wider use of apprenticeship programmes by all enterprises and link the short-term training programmes with National Apprenticeship Programme to ensure better employability.

Labour Law Reforms

Government should reform Labour Law. It must be simplified and modified labour laws applicable to the formal sector to introduce an optimum combination of flexibility and security. National Policy for Domestic Workers needs to be brought in at the earliest to recognize their rights and promote better working conditions.

Improve Data Collection on Employment

Government needs to conduct an Annual Enterprise Survey using the goods and service tax network (GSTN) as the sample frame. EPFO, ESIC and NPS schemes must be tracked regularly the state of employment while adjusting for the formalization of the workforce.

Ease of Doing Business

 Government is trying its best to improve its track on easing of doing Business. Dispute among labour and its working institutions must be clear quickly. Cost must be economical and fair trial. Government should provide Short – Term Tax Concessions and ease GST rules to support employment-generating sectors as well.

Structural Reforms

Government must create well-paid, formal-sector jobs in labour-intensive manufacturing sectors such as food processing, leather and footwear, textiles and apparel, gems and jewellery, etc. by providing Special packages, individually designed for each industry. Government can start to provide a boost to Skilled Services like Hospitality, Travel and Tourism, Financial Services, Information Technology especially Big Data Analysis, Artificial Intelligence, Robotics, Cloud Computing, etc.

Boost Exports

Government should make its best effort to export. High Productivity Exporting Firms provide high wages employment. Therefore, there is a need for a boost focused strategy for creating an environment in which export competitive firms can do well and emerge themselves in labour intensive sectors.


It must important at this time to formulate a large comprehensive policy to revive India’s growth momentum to tide over the economic slowdown and can be created full employment opportunities in this New India.



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Samidha Mishra