explain any five causes of unemployment in India
Answers
The rise in the unemployment rate can be traced to various factors. First, farming has become very unattractive given the vicissitudes of the monsoon and government policy. A bad monsoon means lower crop output and income leading to farmer indebtedness and at the extreme, suicides. A good crop leads to prices coming down and with an ineffective minimum support price (MSP), farmers’ income tends to come down again leading to the same set of problems. Therefore, the children of farmers would rather not do farming and move over to the urban areas or look for jobs in the non-agricultural space. In a way, the disguised unemployment which was earlier there with excess hands working on a piece of land has officially become unemployed.
Second, with GST coming in, there has been an upheaval in the small and medium-sized enterprises (SME) space which was a major absorber of labour all through the years especially in rural areas. With forced recognition and opaqueness of processes, there has been unsettling of several self-employed leading to distress. Considering that this came on the back of demonetisation, it was but natural that this class got affected the most as the business went down.
Third, migration to urban areas has resulted in more jobs in the real estate construction sector which takes in unskilled labour. This has been the trend in the past. Now, 2017-18 was a year when Real Estate (Regulation and Development) Act, 2016 (RERA) was enforced post-demonetisation and there was a perceptible slowdown in the real estate sector, especially commercial and non-affordable housing projects. The stock of inventory tended to increase which slowed down the pace of new projects. This, combined with a slow pace of growth in private infrastructure, meant that these jobs also became scarce. Therefore, the intake of labour was restricted.
Fourth, the youth of today also has aspiration and often are unwilling to take on low-skill jobs once they have a recognised degree. However, given that the economy is not growing at the desired pace of 8 percent-plus in the last three years; demand for labour has been restricted to the higher-end—engineers, management graduates and other professionally qualified personnel. This makes a basic degree irrelevant for employment and while local laws ensure there is employment in supermarkets and e-commerce businesses, migratory labour is not within the perimeter.
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