Unemployment

7.1 Concept and Types

Unemployment occurs when a person who is willing and able to work cannot find employment. The International Labour Organisation (ILO) defines an unemployed person as someone who is: (a) without work, (b) available to start work, and (c) actively seeking employment.

India measures unemployment through PLFS (Periodic Labour Force Survey) conducted by NSSO under the Ministry of Statistics.

Types of unemployment relevant to India:

Type	Description	Context
Structural	Mismatch between skills required and available	IT jobs vs. unskilled labour surplus
Frictional	Temporary, while searching for new job	Graduate job-seeking period
Cyclical	Due to economic downturns/recessions	COVID-19 job losses
Seasonal	Agriculture-based, off-season idle	Kharif/Rabi cycles
Disguised (hidden)	More workers employed than needed; MP = near zero	Overcrowded agriculture
Educated unemployment	Graduates unable to find jobs matching qualifications	India's significant challenge
Underemployment	Working below skill level or fewer hours than desired	Informal sector

7.2 Data and Trends

PLFS 2022-23 (Annual Report):

• Unemployment Rate (UR) — Usual Status: 3.2% overall; Male: 2.8%, Female: 3.2% (urban female: 8.0%)
• Labour Force Participation Rate (LFPR): 57.9% overall; Male: 78.5%; Female: 37.0%
• Youth Unemployment (15–29 years): Urban males 10.0%; Urban females 19.4%
• Worker Population Ratio (WPR): 56.0% overall

Centre for Monitoring Indian Economy (CMIE) estimates higher unemployment (often 7–9%) using a different methodology that includes people who have given up searching.

7.3 Causes of Unemployment in India

Structural factors:

• Demographic dividend not yet converted — 1 crore youth enter labour market annually; formal jobs insufficient
• Agriculture's declining share — over 40% workforce in agriculture but sector growing slowly
• Education-skill mismatch — vast majority of graduates lack industry-ready skills
• Informalisation — 93% workforce in informal sector with no job security
• Capital-intensive growth — IT, pharma sectors create few jobs relative to output

Demand-side factors:

• Low domestic consumption limits manufacturing job creation
• Global slowdown affects export-linked jobs (textiles, IT services)
• COVID-19 destroyed 2.5 crore jobs (CMIE estimate, April 2021)

7.4 Government Employment Schemes

Scheme	Launch	Feature
MGNREGS	2005	Right to 100 days work; Rs 267/day (2023-24 rate for Rajasthan)
PM Mudra Yojana	2015	Collateral-free loans to micro-entrepreneurs; Rs 23.2 lakh crore disbursed (2023)
PM Kaushal Vikas Yojana (PMKVY 4.0)	2022	Short-term skill training; 14.7 lakh trained (FY 2023-24)
Start-Up India	2016	Rs 10,000 crore fund; 1,17,254 recognised startups (2024)
NCS Portal	2015	Job matching portal; 3.5 crore job seekers registered
EPFO ABRY	2020	Employer subsidy for new EPFO-eligible jobs (COVID recovery)
National Apprenticeship Promotion Scheme	2016	Subsidise apprenticeship training in companies

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