From UPSC perspective, the following things are important :
Prelims level : Nothing much
Mains level : Addressing Unemployment
Indian economy is slowing. This is largely a result of weakening demand, mostly in rural areas. Slowing demand has contributed to the declining availability of jobs, where jobless growth is already a problem.
The seriousness of the problem
- Employment-unemployment surveys of National Sample Survey Office (NSSO): latest Periodic Labour Force Survey (PLFS) tells us the following total number of workers in the economy was 472.5 million in 2011-12, which fell to 457 million in 2017-18. The absolute number of workers declined by 15.5 million over six years.
- this is the first time in the history of employment measurement by the NSSO that the total number of workers declined in absolute terms.
- 16-million decline in the number of workers reported by the Labour Bureau’s Annual Employment Surveys of the fourth and fifth rounds
Reasons for unemployment
- fall in the number of workers in agriculture and a sharp fall in the absolute number of female workers
- Roughly 37 million workers left agriculture in the last six years.
- At the same time, 25 million women workers were out of the workforce.
- crisis in agriculture in the last six years has only accelerated the process
- The trend of declining women workers has absolutely no parallel in any developing or developed country of similar per capita income. In most East Asian countries, the period of rapid growth was also accompanied by a rising number of women workers.
- Number of people aged 25-64 years increased by around 47 million during the six-year period
- The economy should have created at least 83 million jobs between 2012 and 2018 to accommodate those who have entered the labour force and those forced out of agriculture. But it witnessed a decline in the number of workers by 15.5 million
Stagnant wages and jobless growth are not just indicators of a weakening economy, but also a recipe for political instability and a crisis in the countryside. The government should acknowledge the extent of the problem and then try to address it.