Unemployment in India: Understanding Challenges, Causes, and Solutions

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April 12, 2024

Updated on April 12, 2024

 

A report titled "India Employment Report 2024", released in early April 2024 by the International Labour Organisation (ILO) and the Institute for Human Development (IHD), emphasizes how young people in India are dealing with high jobless rates. Unemployment remains one of India's most serious socioeconomic problems, despite the growth in GDP and other economic parameters. This GD Topic by MBAUniverse.com on ‘Unemployment in India’ explores the state of unemployment in India today, looks at its root causes, and highlights possible remedies. Read this article to be well-prepared as unemployment in India is a significant GD Topic for MBA admissions and other competitive admissions/exams.

 

This GD Topic titled ‘Unemployment in India’ discusses the status of unemployment in India, underlying reasons, and potential solutions to improve the state of work force. Since unemployment in India is an important GD Topic for MBA Admission and other competitive admissions/exams, read this article to be well prepared.  

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Key Highlights of the India Employment Report 2024 by IHD and ILO

The IHD-ILO report noted that youth employment and underemployment increased between 2000 and 2019 but declined during the pandemic years. However, unemployment among youths, especially those with a secondary level of education or higher, has intensified over time. “In 2022, the share of unemployed youths in the total unemployed population was 82.9 per cent.

 

The share of educated youths among all unemployed people also increased, from 54.2 per cent in 2000 to 65.7 per cent in 2022. Among the educated (secondary level or higher) unemployed youths, women accounted for a larger share (76.7 per cent) than men (62.2 per cent). This indicates that the problem of unemployment in India has become increasingly concentrated among the youth, especially educated youths and women in urban areas,” it said.

 

Macroeconomic policies should incorporate agendas for creating jobs; labor-intensive manufacturing should be given priority; micro, small, and medium-sized businesses should be assisted; agricultural productivity should be raised; and investments in green and blue economies should be made. Investing in and regulating industries like the care sector and the digital economy, encouraging inclusive migration and urbanisation policies, and making sure that labour laws and regulations are strong enough to address market disparities are some strategies to improve the quality of jobs.  

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Reasons for Unemployment in India

India's unemployment problem is due to several factors such as rapid population growth, skill mismatch, slow industrial growth, the dominance of informal economy, and educational differences. Surplus of labour due to lack of sufficient job creation is also a big reason. Many job seekers lack necessary qualifications, resulting in structural unemployment. Slow industrial growth also limits the number the workers that can be absorbed in formal sector in India.

Solutions to Address Unemployment

Solving India's unemployment problem requires a multi-pronged approach that includes support from stakeholders including government, private sector, and civil society. Key strategies to reduce unemployment include:

  • Stimulating economic and industrial growth
  • Promoting skill development
  • Promoting entrepreneurship
  • And, increasing the social security and support systems in area of health and housing  

Conclusion

India's socioeconomic development is severely hampered by unemployment, which has far-reaching effects on people's lives, communities, and the country as a whole. It will take coordinated efforts to address the core causes of this complex issue, which include population growth, skill mismatches, slow industrial growth, the dominance of the informal economy, and educational disparities. India can reduce unemployment and create a more just and prosperous future for all of its citizens by putting in place targeted interventions that support entrepreneurship, skill development, industrial growth, social safety nets, and inclusive growth.  

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