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.
There is an increase in unemployment but the whole blame can not be placed on PM Modi, it is phenomenon that is happening world wide. Government policies could lessen the damage which are not that effective at present.
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 which is 67% lower than 421,000 jobs that were added in 2014 .
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 - India today
REASONS FOR THE FALL (refer picture above)
According to the latest Asia-Pacific Human Development Report only 140 million or less than half of 300 million who entered labour market between 1991 and 2013 found jobs. The report warned that India was likely to see severe shortage of jobs in the next 35 years.
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.
Image Source - The Hindu. [The majority of Quorans belong to the better qualified lot]
THE BIG PICTURE
Image Source - Manufacturing in India (United States department of labor)
The second quarter was better, with 134,000 new jobs, but even then the 91,000 net new jobs created in the first half of FY 2015-16 look desultory.
FY 2014-15 saw a spurt, with 500,000 new jobs added as compared to 300,000 the year before, but it was still half the peak figure. There have been no signs of recovery in FY 2016; in fact, there is a decline.
One reason for the decline in jobs could be a reduction in contract workers (nearly 70,000 of them were retrenched in the first half of FY 2016, compared to 161,000 additions in the first half of FY 2015).
Source - 75,000 Graduates, Engineers Apply For 30 Govt Peon Posts In India
Labour and employment secretary Shankar Aggarwal Says:
"Contractualisation is a universal phenomenon. The system of production of goods and services is different. Value addition is happening across the world and, depending on the circumstances, people decide where to go. We are witnessing a decline in growth across the world. To get jobs, we need flexibility in hiring.
"Employment in export units, reeling under shrunken global demand, also saw a sharp decline. There were only 5,000 job additions in the first half of FY 2016 compared with 271,000 in the corresponding period of FY 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 26,000 job additions in the other seven labour-intensive sectors in the second quarter of FY 2016.
Employment in export units, reeling under shrunken global demand, also saw a sharp decline. There were only 5,000 job additions in the first half of FY 2016 compared with 271,000 in the corresponding period of FY 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 26,000 job additions in the other seven labour-intensive sectors in the second quarter of FY 2016.
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.
Unemployment is a problem beyond politics, religion and the other petty issues; it need to be addressed with at most importance. The reports ascertains that it will affect the life of low income groups and the common man severely if left unchecked leading to economic disparity in India. A growth focused on GDP and discarding HDI(Human development Index) will be a loss for the citizens(common man) of India.
India staring at job crisis, warns human development report
Welcome to Jobless Growth: Why India is facing an unemployment crisis (To get a clearer picture explaining the scenario in various sector)
Unemployment in India: Types, Causes and Solution - Important India [Solutions]
Unemployment Crisis: Staring at jobs loss and driverless cars
Regional Human Development Report 2016
EDIT
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.
Courtesy
Prasanna Jayashankar answer to How can India go cashless with just 30% of population having smartphones?
There is an increase in unemployment but the whole blame can not be placed on PM Modi, it is phenomenon that is happening world wide. Government policies could lessen the damage which are not that effective at present.
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 which is 67% lower than 421,000 jobs that were added in 2014 .
- 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.
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 - India today
REASONS FOR THE FALL (refer picture above)
- Increased automation of operations.
- India’s growth model is capitalist intensive and less labour intensive.
- Lack of ease in hiring and firing(pending labor reforms) has discouraged industries to hire more.
- High interest rates and excess capacity have hurt expansion plans.
- Falling exports for over a year due to global slowdown.
- Drought like condition for 2 consecutive years have shrunk rural demands.
According to the latest Asia-Pacific Human Development Report only 140 million or less than half of 300 million who entered labour market between 1991 and 2013 found jobs. The report warned that India was likely to see severe shortage of jobs in the next 35 years.
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.
- 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.
- 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.
Image Source - The Hindu. [The majority of Quorans belong to the better qualified lot]
THE BIG PICTURE
- The situation has only worsened since, thanks to weak industrial growth, a struggling agriculture sector with widespread drought, cost rationalisations in several sectors and the knock-on effect of a global slowdown.
- Also, traditionally labour-intensive industries are beginning to increasingly mechanise their operations. While it makes them more productive and profitable, it also shrinks job opportunities.
- According to the labour ministry's 27th Quarterly Employment Survey of eight employment-intensive industries- textiles, leather, metals, automobiles, gems & jewellery, transport, IT/BPO and handloom/powerloom)- there were 43,000 job losses in the first quarter of FY 2015-2016. The second quarter was better, with 134,000 new jobs, but even then the 91,000 net new jobs created in the first half of FY 2015-16 look desultory.
- At their peak, these sectors had added 1.1 million jobs in 2010. In the following five years, however, 1.5 million jobs were lost. FY 2014-15 saw a spurt, with 500,000 new jobs added as compared to 300,000 the year before, but it was still half the peak figure. There have been no signs of recovery in FY 2016; in fact, there is a decline.
Image Source - Manufacturing in India (United States department of labor)
The second quarter was better, with 134,000 new jobs, but even then the 91,000 net new jobs created in the first half of FY 2015-16 look desultory.
- At their peak, these sectors had added 1.1 million jobs in 2010.
FY 2014-15 saw a spurt, with 500,000 new jobs added as compared to 300,000 the year before, but it was still half the peak figure. There have been no signs of recovery in FY 2016; in fact, there is a decline.
One reason for the decline in jobs could be a reduction in contract workers (nearly 70,000 of them were retrenched in the first half of FY 2016, compared to 161,000 additions in the first half of FY 2015).
Source - 75,000 Graduates, Engineers Apply For 30 Govt Peon Posts In India
Labour and employment secretary Shankar Aggarwal Says:
"Contractualisation is a universal phenomenon. The system of production of goods and services is different. Value addition is happening across the world and, depending on the circumstances, people decide where to go. We are witnessing a decline in growth across the world. To get jobs, we need flexibility in hiring.
"Employment in export units, reeling under shrunken global demand, also saw a sharp decline. There were only 5,000 job additions in the first half of FY 2016 compared with 271,000 in the corresponding period of FY 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 26,000 job additions in the other seven labour-intensive sectors in the second quarter of FY 2016.
Employment in export units, reeling under shrunken global demand, also saw a sharp decline. There were only 5,000 job additions in the first half of FY 2016 compared with 271,000 in the corresponding period of FY 2015. In the automobile sector, for instance, there were 23,000 job losses in export units compared to the 26,000 job additions in the other seven labour-intensive sectors in the second quarter of FY 2016.
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.
Unemployment is a problem beyond politics, religion and the other petty issues; it need to be addressed with at most importance. The reports ascertains that it will affect the life of low income groups and the common man severely if left unchecked leading to economic disparity in India. A growth focused on GDP and discarding HDI(Human development Index) will be a loss for the citizens(common man) of India.
India staring at job crisis, warns human development report
Welcome to Jobless Growth: Why India is facing an unemployment crisis (To get a clearer picture explaining the scenario in various sector)
Unemployment in India: Types, Causes and Solution - Important India [Solutions]
Unemployment Crisis: Staring at jobs loss and driverless cars
Regional Human Development Report 2016
EDIT
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.
Courtesy
Prasanna Jayashankar answer to How can India go cashless with just 30% of population having smartphones?
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