What is the impact of demonetization act by the Indian government in job market?

Unemployment is a situation where in the person willing to work fails to find a job that earns them living. To know give the solution one need to first understand the present state of unemployment. The effect of Demonetization on unemployment in India with over 125 crore people is hard to imagine.
The Ripple Effect of demonetization
What is much tougher to gauge is the second round impact of a move like this. If the worst fears about India’s large parallel economy were true, then the ripple effect of this move could be felt for some time to come.
An example is given below
[Ludhiana hosiery industry badly hit by demonetization (21/11/2016)
The knitwear industry in Ludhiana contributes about 80 percent of the total woolen/acrylic output of the economy and generates employment for over 400,000 people in the city.More than 70 per cent of the industries have shut down. Workers have migrated back to their homes and unemployment has increased]
DEMONITIZATION & UNEMPLOYMENT
There are 2 important factors which makes it difficult.

1. Demonetization impacts
2. The fact that unemployment rate has been increasing rapidly for past few years.

Part 1 - DEMONETIZATION Impact

• DEFLATION

When huge amount of black money would go out of the system due to demonetization, the supply of money would reduce causing the prices of the commodity to fall leading to deflation.

google images
It is a worse case scenario which can cause deflation which could lead to unemployment.
Former chief statistician of India Pronab Sen said “If I am not going to able to sell, I am not going to buy from my supplier which will kickstart a chain reaction. So even if the first round impact of lower money circulation may not have a large impact, the chain effect will be large,” he added.
But it is possible to solve the issue as explained(How can India overcome deflation due to demonetization?) by some of the best brains in Quora like Mr. Balaji Vishwanathan, Mr. Awdesh Singh.

• CASHLESS ECONOMY

India is transforming to a cashless economy which pose new challenges.
In a cashless economy, organization has to pay all wages through electronic means thus making it traceable. Now the organization is forced to pay minimum wage to everyone it employs which can be as much as 11000 rupees per month.
The economic value added for the job roles that are employed at lower than minimum wage does not justify minimum wage and this will lead employers to no longer employ these people opting for automation instead thus increasing unemployment in the weakest sections of society.
PART 2 - CURERENT SITUATION
According to Labour Bureau data released in April 2016, textiles, leather, metals, automobiles, gems and jewellery, transport, information technology and the handloom sectors together created 135,000 jobs during 2015. This is 67% lower than 421,000 jobs that were added in 2014 .
Unemployment rate in India has shot up to a five-year high of 5% in 2015-16 with the figure significantly higher at 8.7% for women as compared to 4.3% for men, says report by Labour Bureau.

• Unemployment rate was 4.9 per cent in 2013-14, 4.7 per cent (2012-13), 3.8 per cent (2011-12) and 9.3 per cent (2009-10).
• Labour Bureau did not bring out any such report for 2014-15.

It is those who are in the low income groups(deprived) who are the most affected by this decision. The daily wage workers, maids, farmers, local vendors, porters etc. In Quora, I have not come across anyone from these professions till date .
GROWTH WITHOUT JOB
Many wonder why an economy supposedly growing at a rate of over 7 per cent is not creating enough jobs. Economists say this is because more work is now being done with fewer employees. "The economy is generating less jobs per unit of GDP," says D.K. Joshi, chief economist at ratings and research firm Crisil.
Illustratively, in manufacturing, if 11 people were needed to execute a piece of work that generated Rs 1 million worth of industrial GDP a decade ago, today only six are needed. Joshi's verdict: "The economy has become less labour-absorbent."
About 12 million people join the job seekers’ queue in India every year. While industry is creating jobs, too many such jobs are in the informal sector, which accounts for 84% of current jobs.

Image Source - Manufacturing in India (United States department of labor)
REASONS FOR THE FALL (refer picture above)

1. Increased automation of operations.
2. India’s growth model is capitalist intensive and less labour intensive.
3. Lack of ease in hiring and firing(pending labor reforms) has discouraged industries to hire more.
4. High interest rates and excess capacity have hurt expansion plans.
5. Falling exports for over a year due to global slowdown.
6. Drought like condition for 2 consecutive years have shrunk rural demands.

UNDP REPORT 2016
The United Nations Development Programme (UNDP) report said that while a vibrant informal economy keeps a large number of low-wage workers employed, such employment leads to many problems, including inadequate protection for workers.

• For instance, in India 1 in every 10 workers is employed in the construction sector.
• Of India’s 1.2-billion population, 60% are of the working age. And of the 12 million individuals who join the queue of job seekers every year, only 4% undergo vocational training.
• On the other hand, employment growth in services has been slow in recent years. India’s challenge is to create the conditions for faster growth of productive jobs outside of agriculture.
• Worse, during October to December last year, 20,000 people lost jobs in these sectors, partly because of shrinking exports. Merchandise exports have shrunk for 15 successive months till February as orders continue to dry out from much of Europe.
• This unemployment comes at a time when every sector is short of skilled workers — from masons to teachers to waiters to engineers — perhaps a reflection of an education system that is not imparting skills the economy needs.

CONCLUSION
There is a clear mismatch between the growth rate of the Gross Domestic Product (GDP) and the growth rate of employment; GDP grows at 7.7 percent whereas employment grows at just 1.8 percent. Due to demonetization the GDP is expected to come down, hence it will be difficult to predict the magnitude of the impact.
Government policies could lessen the damage, which are not that effective at present(based on the data available).
Reference
Part 1

1. Will demonetization adversely impact GDP growth?
2. Effects Of Demonetisation On India's GDP - Difficult To Calculate, We Don't Even Know The Sign (Forbes)
3. Demonetisation seems like deflation for many people; danger signal for PM Modi - Firstpost

Part 2

1. Ciril J Thundiyil's answer to What is India's unemployment rate now? Has it increased or decreased after Narendra Modi became prime minister? (detailed answer on the present situation)
2. Regional Human Development Report 2016
3. Welcome to Jobless Growth: Why India is facing an unemployment crisis (To get a clearer picture explaining the scenario in various sector)

[India is a nation with 125 crore population, which makes it hard to fully understand the situation]