Unemployment Rate in India: NSSO Unemployment Report

By BYJU'S Exam Prep

Updated on: September 13th, 2023

As per International Labour Organisation (ILO), unemployment may be defined as – A person of legally working age who is willing to work but unable to find any work/job for which he can earn wages in return. Recently NSSO report on unemployment has been released, which tells the overall unemployment rate in India is 6.1 Percent highest in 45 years.

Unemployment Rate in India: NSSO Unemployment Report

Important facts about unemployment

  • India is bound by the treaties and conventions of International Labour Organisation (ILO) as it is a member of ILO.
  • In India, the data of unemployment is collected mainly by the Central Statistical Office (CSO) and the National Sample Survey Office (NSSO), and released by the Ministry of statistics and programme implementation.
  • In India, the two approaches used for the measurement of unemployment are Usual Status approach and Current Weekly Status approach.
  • The usual status approach uses a reference period of one year preceding the date of the survey.
  • The current weekly status approach uses data of seven days preceding the date of the survey as the reference period.
  • A person is considered employed only if she/he pursues anyone or more gainful activities for a minimum of at least one hour on any day of the reference week.

Highlights of NSSO Report 2019 on Unemployment

  • This Periodic Labour Force Survey has been constituted by the union ministry of statistics and programme implementation under the chairmanship of Amitabh Kundu.
  • The NSSO prepared the survey based on data collected from July 2017 to Jun 2018.
  • The latest Periodic Labour Force Survey indicates that the unemployment rate in India is at its highest since 1972, both in urban as well as in rural areas.
  • In comparison with the unemployment rate of 2011-12 to the current one, the unemployment rate has increased more than three times among rural men and more than doubled among rural women.
  • In urban areas, since 2011-12, the unemployment rate among men has increased more than twice and doubled among urban women.
  • The unemployment rate rose sharply among youth who got a better education and ages between 15 to 25 years.
  • As per the usual status approach, the overall unemployment rate in India is 6.1 per cent. In urban areas, the unemployment rate is 7.8 per cent, whereas the unemployment rate in rural areas is 5.3 per cent.
  • As per the current weekly status approach, the overall unemployment rate is 8.9 per cent. In urban areas, the unemployment rate is 9.6 per cent, whereas in rural areas the unemployment rate is 8.5 per cent.
  • The unemployment rate is higher in urban areas as compared to rural areas.
  • The unemployment rates for females in urban areas are higher than those for males.
  • Surprisingly, the survey indicates that those who have higher a degree and those who are completely illiterate, both have witnessed almost the same level of unemployment.
  • Interestingly, the unemployment among rural non-literate females has reduced, and the number of urban females who are literate for upto primary level jobs is the same.
  • As per NSSO quarterly bulletin, the unemployment rate stood at 9.7 per cent in urban areas during October-December 2018 cycle – a notch higher than July-September period.
  • The unemployment rate estimated at 9.6 per cent in July-September 2018 cycle and 9.7 per cent in April-June 2018.
  • The unemployment rate was on the rise for youth who were in the age group of 15-29 years.
  • As per current weekly status that gives an average picture of unemployment, around 23.7 per cent youth was unemployed in October-December 2018 and 22.9 per cent in April-Jun 2018.
  • During 2018, approximately 60 per cent population was unemployed in the service sector, 34 per cent in industries and 6 per cent in the farm sector.
  • The share of workers in the total population, also called as the worker population ratio (WPR) stood at 42.2 per cent.
  • Among social groups, the highest unemployment rate of 6.7 per cent is among the ‘General’ category candidates, followed by 6.3 per cent for SC, 6.0 per cent for OBC and 4.3 per cent for SC.
  • Among religious groups, the Christians have the highest unemployment rate both in urban as well as in rural areas.
  • In urban areas, the Christians have an unemployment rate of 11 per cent, followed by 9.1 per cent for Sikhs, 8.5 per cent for Muslims and 7.6 per cent for Hindus.
  • In rural areas, the Christians have an unemployment rate of 7.4 per cent, followed by 6.5 per cent for Muslims, 6.3 per cent for Sikhs and 5.2 per cent for Hindus. 

Causes of unemployment

  • Rising Population – Employment opportunities are growing in India, but the rising population creates a situation where the rate of unemployment exceeds the rate of employment.
  • Defective Education System – In India, the education system does not provide skills. Around 80 per cent engineers of our country are technically unskilled and hence were not able to get jobs. The same holds true for other degree holders also.
  • Less creation of jobs due to technical advancement – The technology is taking the place of human beings due to many factors like speed, accuracy, regularity, economy etc. New technology requires less workforce for the same work. Due to this job creation getting slowed.
  • Less Willingness or Unwillingness to relocate – Most of the population do not want to relocate to any other place for employment due to family commitments and xenophobia. Despite the availability of excellent job opportunities in different states/cities, a large number of women/men do not want to move outside their city or town.
  • More preference to Government Jobs – In India, people give more importance to central, state and PSU jobs as compared to private-sector jobs. Many students prepare for government jobs for many years rather than taking up jobs in the private sector.
  • Gender Inequality – In this male-dominated Indian society, women feel unsafe, fearful and incompetent for employment in many sectors. Due to this, many Indian women did not take any employment. Gender Inequality is also prevalent in our education system, which gets reflected in employment at a later stage.
  • Stigma and caste system – Higher case people do not want to take jobs in traditionally related to lower caste people even after the availability of employment.
  • Seasonal employment in agriculture – As a large part of the population is dependent on agriculture and agriculture provides only seasonal work; employment is unavailable for the rest of the period.
  • Jobless economic growth – The economic growth in which jobs were not created are called jobless economic growth. This is also one of the significant factors contributing to unemployment.

Solutions to reduce unemployment

The following collective effort by the government and citizen may help in alleviating unemployment:-

  • Upgradation of the education system – Our education system needs to be upgraded for better orientation of the subject and practical knowledge.
  • Skill development – This area needs to be focused a lot for the creation of better human resources in terms of knowledge and skills.
  • Rapid industrialization – Industries need to be at the forefront of creating new job avenues. Increase in industries will automatically create more jobs.
  • Strengthening agricultural infrastructure – About 70 per cent of rural households still depends primarily on agriculture for their livelihood. In view of this, the infrastructure needs to be strengthened for more job creation.
  • Promoting capital investment – Foreign collaboration and capital investment is an urgent requirement for job creation in every sector.
  • Self-employment generation – Government needs to encourage entrepreneurs for more job creation and better employment opportunities.
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