Complex Problem In India : Unemployment

Unemployment in India is a complex problem with numerous overlapping and intertwined causes; however, it is possible to identify several key causes. This article will attempt to describe and outline these causes, which vary from macro-level factors (e.g. overall slow economic growth as well as population increases) to more micro-level factors (e.g. the joint family system of business). Understanding the causes of unemployment is the first step in beginning to rectify this major problem and creating a society in which everyone is able to find a sustainable livelihood for themselves and their families.

The following are the main causes of unemployment:

1. The caste system
The caste system—a structure of social stratification that can potentially pervade virtually every aspect of life in India—is a major factor in generating unemployment. In some locations, certain kinds of work are prohibited for members of particular castes.

2. Increased population growth
Increases in population have been considerable over the half century. The country’s overall population is made up of more than 1.3 billion people, second only to that of China. Moreover, India’s population is predicted to exceed China’s by the year 2024; it will, furthermore, probably be the most populous country for the entirety of the 21st century.

3. Slow economic growth
Because the Indian economy is relatively underdeveloped, economic growth is considerably slower than it might otherwise be. This means that as the population increases, the economy cannot keep up with demands for employment and an increasing share of people are unable to find work.

4. Slow industrial growth
Similarly, while industrialization has been considerable, its rate of growth is nevertheless fairly slow. There is a major emphasis on industrialization nationwide, which has elevated the Indian economy; however, industrial growth continues to generate relatively few new jobs overall as compared to increases in population.

5. Seasonality of agricultural occupations
Agriculture offers unemployment for a large segment of the population, but only for several months out of the year. The result is that for a considerable portion of the year, many agricultural workers lack needed employment and income.

6. Joint family system
Large family businesses may often involve family members who depend on the family’s joint income but do not contribute substantive work. Although these individuals may appear to be working, they may not actually add anything to the business. The result is that their unemployment is “disguised.” Thus the joint family system may contribute to low productivity.

7. Loss of small-scale/cottage industries
Industrial development has made cottage and small-scale industries considerably less economically attractive, as they do not offer the economies of scale generated by large-scale mass production of goods.

8. Low rates of saving and investment
India lacks sufficient capital across the board. Likewise, savings are low and the result is that investment—which depends on savings—is also low.

9. Shortage of means of production
Production is, quite simply, limited by the amount of materials, equipment, and energy available to fuel it. Shortages of raw materials, facilities, fuel, and electricity means decreased production of goods, which logically results in decreased availability of jobs.