According to the latest quarterly Periodic Labour Force Survey (PLFS) data, the unemployment rate in India in urban areas during the third quarter (October-December) of FY25 remained unchanged at 6.4 percent compared to the preceding quarter.
Periodic Labour Force Survey Key Findings
- The Labour Force Participation Rate (LFPR) in urban areas among persons aged 15 years and above increased from 49.9% during October – December 2023 to 50.4% in the quarter of October – December 2024.
- Worker Population Ratio (WPR) in urban areas among persons aged 15 years and above has increased from 46.6% during October – December 2023 to 47.2% in October – December 2024.
- The survey further showed that the jobless rate for youth (15-29 age group) increased to 16.1 percent in Q3FY25 from 15.8 percent in the preceding quarter.
Causes of Unemployment in India
1. Sluggish Economic Growth: The underdeveloped economy fails to generate sufficient jobs, resulting in widespread unemployment.
2. Overpopulation: Rapid population growth exacerbates job scarcity, with the unemployment rate reaching concerning levels, of 11.1%
3. Seasonal Nature of Agriculture: The agriculture sector offers temporary employment, leaving a significant part of the rural population jobless during off-seasons.
4. Underemployment: Limited access to production resources(raw materials and energy) prevents many individuals, especially in rural areas, from working full-time.
5. Informal Sector Challenges: The majority of the workforce (Gig Workers) operates in unorganized sectors with low wages and poor job security. It makes them perceive their employment as inadequate.
6. Underperforming Service Sector: The service sector in India employs only a small fraction of the workforce compared to developed countries. Though it contributes significantly to the GDP.
7. Flawed Education System: Education systems fail to equip students with industry-relevant skills, rendering a large number of graduates unemployable.
8. Impact of Automation: Automation and AI reduced traditional jobs while creating demand for specialized skills in machine learning, blockchain, etc
| People also read: | |
| What is Artificial Intelligence? AI Explained in Detail | Freebies Culture in India – Current Affairs |
Impact of Unemployment in India
1. Under-utilization of Human Resources: The potential of the workforce remains unutilized, resulting in a loss of valuable human resources. Proper utilization of these resources could significantly contribute to national economic growth.
2. Rising Poverty: Lack of income due to unemployment leads to increased poverty, debt burdens, and a rise in economic hardships for affected individuals and families.
3. Social Issues: Unemployment fuels societal problems such as corruption, gambling, and unethical behaviour. These issues undermine law and order and disrupt societal harmony.
4. Political Instability: Joblessness breeds dissatisfaction with the government, prompting individuals to engage in disruptive activities and weakening political stability. This, in turn, hinders economic progress.
Government Initiatives to tackle unemployment
1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Guarantees 100 days of annual wage employment for rural households, offering unskilled manual work to enhance rural livelihoods.
2. Aajeevika – National Rural Livelihoods Mission (NRLM): Empowers rural poor by building institutional platforms for sustainable livelihoods. Also offering placement-linked skill development for youth under DDU-GKY.
3. Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM): Reduces urban poverty by enabling self-employment and skill development, providing shelters for urban homeless, and strengthening grassroots institutions
4. Future Skills PRIME: Initiative for reskilling IT professionals in emerging technologies like AI to boost employability in a digital age.
| People also read: | |
| Top 5 NDA Coaching in India | Best Defence Coaching Institute in India | Stampede Disasters and its Management in India |
Way Forward
1. Skill Development: Vocational training must align with industry needs, and partnerships between academia and industries should be strengthened to address skill gaps and enhance workforce employability.
2. Diversify Rural Employment: Promoting rural manufacturing and entrepreneurship can reduce reliance on agriculture. Also, it will create diverse, sustainable job opportunities, reducing unemployment and underemployment in rural areas.
3. Encourage Private Sector Involvement: Simplifying regulations and offering incentives can boost private sector job creation while encouraging investments in skill development initiatives to enhance employment opportunities.
4. Quality Job Creation: Stable and secure jobs offer financial stability, career growth, and emotional well-being, addressing unemployment challenges holistically
Conclusion
India needs to make dedicated efforts in order to decrease the number of unemployed people. By following a comprehensive approach including skilling of people, better education, increased focus on labour-intensive sectors, etc. India will be able to decrease the unemployment rate substantially.