Reasons and unemployment:
1. High rate of population growth:
- India is a highly populated country that too with a high rate of population growth which further increases the population.
- The rising population keeps on rapidly supplying the labourers who are then in continuous search of employment. On the other hand, employment opportunities do not increase at the same rate.
- According to one estimate, in India each year there is increase in population by 1.70 crores which is more than total population of Australia.
2. Slow rise in employment opportunities:
- Increase in employment and economic growth are strongly related.
- During planning periods, economic growth increased continuously but we failed in creating equal number of employment opportunities. As a result, economic growth remained jobless growth.
- In first decade of planning India attained 3.5 percent of economic growth. This growth rate increased to 7.6% in 10th five year plan and 7.8% in 11*h five year plan. We could not increase employment to meet this growth.
- Moreover, green revolution in agriculture sector remained limited to certain areas. The sectors other than agriculture observed slow growth. So unemployment increased in other sectors.
3. Low rate of savings and investments:
Although national income increased during the planning periods, population also grew at a fast rate. So, the per capita national income increased at a lower rate as compared to national income.
Owing to low per capita income and expenses to be incurred to provide the basic necessities to the large population India’s savings and investment remained low.
Hence, India could not make adequate investment in industry, agriculture or other sectors and so could not create much employment opportunities.
4. Capital intensive production technique:
- In India, land is scarce whereas labour is abundant.
- In such a condition India should have adopted labour intensive production techniques to provide employment at a large scale. But, from second five year plan, India focused on developing of heavy and basic industries which are capital intensive and not labour intensive.
- Even while preparing plans, India gave more importance to capital intensive production techniques rather than labour intensive techniques.
- Mechanization was given more importance in industries as well as in agriculture
- Thus, even though India’s economy grew, a large population remain unemployed.
5. Lack of vocational training:
- One of the reasons for rise in unemployment is the deficient educational system.
- Indian education system is unable to produce the labour which can cater the ever changing needs and methods of job market.
- India in order to achieve high economic growth rate adopted modernization of industries and agriculture but failed to produce labour equipped with necessary knowledge and skills that can match up the modernization.
- India did not provide any vocational training to the labourers to adapt to modernization and hence unemployment increased.
6. Lack of manpower planning:
- Human resource or manpower planning has not been right in India.
- India failed to plan the type of labour, quantity which India would need and the type of education and training that should be provided to match the need.
- As a result even though every year lakhs of educated youth obtain degrees but they lack industry-specific knowledge and training required in present economic scenario. Hence, they remain educated unemployed.
- In many cases, due to lack of employment opportunities the doctors and engineers with high degree migrate to foreign countries because they are unable to get suitable work in India.
7. Inefficiency of public sector:
- After independence, public sector was given more importance than private sector. As a result, tremendous rise in investment was made in increasing the number of public sector enterprises.
- The public sector proved quite unproductive. So, they could not generate necessary employment.
- In order to grow public sector several controls were put on the private sectors that were quite capable of generating large scale employment. Over and above this, the government even neglected the development of private sector which badly affected employment rate.
8. Negligence towards agriculture sector:
- India is an agricultural country and most of its population resides in villages. Naturally this population is dependent on agriculture for employment.
- During the planning period, India neglected agriculture and focused more on other sectors. Agriculture remained underdeveloped and gave rise to large scale unemployment.
- Although India achieved Green Revolution in agriculture but its benefit could be enjoyed by only a handful of states like Punjab and Haryana.
- On the top of this, burden of population, lack of irrigation facilities, lack Of agricultural finance, uncertainty of monsoon and few other uncertainties that led to poor development of agriculture.
9. Low mobility of labourers:
- Lack of mobilization among labourers is also one of the reasons for unemployment.
- Many a times labourers do not move from one place to another for work but due to reasons like social matters, family bonding, language barrier, religion and cultural constraints, casteism, lack of awareness, lack of transportation facilities, easy availability of suitable housing, etc. Such people then either remain under-employed or unemployed.
- People with higher education are not interested in going to rural and backward areas for work. These people expect to get employment in urban area, which if not satisfied makes them unemployed.
- Attraction towards urban lifestyle, infrastructure and facilities stop people from going to rural areas for work.
10. Lack of infrastructural facilities:
- Rural areas lack in proper facilities of transportation, roads, education, health and electricity.
- On the other hand in rural areas one can easily avail labourers at low wages, land at cheaper rate and raw material for agro-based industries. But due to lack of proper infrastructure industrialists do not wish to establish industries in rural areas. Hence, there exists problem of unemployment in rural areas.
11. Other reasons:
Lack of strong national employment policy, suitable work environment, suitable environment for developing industries and trade and under-utilization of natural resources are among the other reasons responsible for the increase in unemployment.
