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:
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.
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