Causes of Unemployment

Causes of Unemployment: Unemployment refers to a situation when a person searches for a job actively and is unable to find work. Unemployment is an important indicator of the economy. The unemployment rate is the number of people unemployed divided by the working population or people working under the labor force. It is very important to understand the factors which contribute to the problem of unemployment and also the solutions which can be worked on.

What are the Causes of Unemployment?

The important causes of unemployment in context of India include the following important points:

The Caste System

The caste system is one of the most important factors in generating unemployment in India since time immemorial. Certain kinds of work are prohibited for members of particular castes in certain locations. Work is often given to members of a certain community, rather than to those who truly deserve the job and have the right skills to. This results in a high rate of unemployment.

Inadequate Economic Growth

Economic growth in India is inadequate and hence the economy is underdeveloped. The slow growth fails to provide enough unemployment opportunities to the ever-increasing population. With the increase in population, the economy couldn’t keep up with the demands for employment and an increasing share of people are not able to find jobs. This results in insufficient levels of employment nationwide.

Increase in Population Rate

There is a prediction of India’s population exceeding China’s by the year 2024, it will furthermore be the most populous country. Population growth couldn’t be matched by the economic growth of the country, which leads to the majority of society being unemployed.

Agriculture is a Seasonal Occupation

Only for certain months of the year, does agriculture provide employment to a huge segment of the population; which results in a considerable portion of the year, many agricultural workers lack needed employment and income.

Decrease in Small-Scale/ Cottage Industries

The advancement of industrial development has made the cottage industries to be considerably less economically attractive, as they do not offer economies of scale mass production of goods. The demand for cheap, mass-produced goods outweighs the desire for goods that are handcrafted by those with very specific skills and expertise. This results in the decline of small-scale industries and artisans have become unemployed as a result.

Low Rates of Saving and Investment

India has a scarcity of sufficient capital across the board. Because of this savings are low and this results in lesser investment. With the presence of higher rates of investment, new jobs could be created and the economy would be in a boom. Also, there is a lack of investment in rural areas and 2 & 3-tier cities, because of which there is large-scale untapped employment potential.

Ineffective Economic Planning

There is a lack of nationwide plans on account of the significant gap between labor supply and labor demand. It is important that the supply and demand for labor are balanced, to ensure that those who need jobs are able to get them, or in that case, many individuals will compete for the same job.

Immobility of the Labour

Attachment and maintenance of proximity to family play a major role for Indian citizens. Because of this, people avoid traveling long distances from their families in pursuit of employment. Also, language, religion, and climate play important roles to contribute to the low mobility of labor. So, people who might otherwise be suitable for the jobs are unable to travel to reach the, unemployment is magnified.

Job Specialisation

Jobs in developed countries have become highly specialized, but the education system of India doesn’t match the right training and specialization needed for these kinds of jobs. Thus, many people who are willing to work become unemployable due to a lack of appropriate skills.

Biased Distribution of Land

One more reason for joblessness winning in emerging nations like India is the biased appropriation of land with the goal that numerous farming families have no satisfactory admittance to the land which is a significant resource for horticultural creation and work.

Sub-division of land property under the strain of fast populace development beginning around 1951 has additionally diminished admittance to land for a few rural families. Accordingly, numerous people who were independently employed in agribusiness have become landless horticultural workers who experience the ill effects of intense joblessness and underemployment.

Rigid Protective Labor Legislation

One more justification behind the sluggish development of work in the coordinated area has been the presence of unduly unbending defensive work regulation which makes it truly challenging to conserve a laborer who has been utilized for 240 days.

Work regulation is such a lot of unbending that shutting down the unit and quitting the industry is even more troublesome. Consequently, this exorbitantly defensive work regulation prompts private business people to favor the most extreme utilization of capital instead of work.

Solutions for Remove Causes of Unemployment

The various solutions which can be used to remove the issues of unemployment in India include a complex and multifaceted approach,which can be discussed in the following ways:

Development of Skill Programs

With development of certain skill programs would help in the process of equipping the workforce with various skills which are needed and also in collaboration of various skill gaps.

Reforms in Education Sector

Reforsm in the educational sectors can help in alignment of te demands in the job market and also in introducing practical as well as vocationalisation of education.

Promotion of Entrepreneurship

The promotions of entrepreneurship skills with the help of financial aids and reduction of bureaucratic hurdles as well as offering mentorships, can help in job creation.

Investment in Infrastructure

Investment in infrastructure can help in the building of proper roadways, and urban development which can aid in the process of employment generation.

Industrial Diversification

The promotion as well as diversification of industries and creation of more balance jobs in markets can encourage the growth of sectors beyond traditional areas.

Rural Development

The investment in rural areas projects for reduction of urban- rural gaps and also provision of job opportunities can help in the reduction of unemployment and reduce the migration to cities and overcrowding.

FAQs on Causes of Unemployment in India

What are main causes of unemployment?

The main causes of unemployment in India are the caste system, inadequate economic growth, increase in population, agriculture as a seasonal occupation, loss of small-scale industries, and so forth.

What factors causes unemployment?

Factors which causes unemployment include high interest rates, global recession and financial crisis.

What causes jobless growth?

The causes of jobless growth include technological advancements, capital intensive growth and structural shifts in the economy.

Which type of unemployment is found in India?

Disguised unemployment is the type of unemployment found in India.

How to reduce unemployment in India?

By the following methods, unemployment can be reduced in India, which includes the use of labour-intensive technology, accelerating investment in agriculture, diversification of agriculture, and so forth.