Unemployment: A growing Challenge & Unemployment Rate in India

By Naveen Singh|Updated : July 18th, 2019

Here we will discuss the causes of unemployment and measures that can be taken to tackle the increase.

Unemployment - A Growing Challenge in India

This has been one of the most critical issues that the government has to address with utmost ingenuity. the rate of unemployment in the country is growing significantly.


The sea of humanity, especially the youth can be seen as a force multiplier to set India to the next level, or, if not harnessed adequately may spell an existential disaster for the nation in coming years.

Government has introduced steps to check job losses and unemployment, but those measures appear to have fallen short to deliver the desired results on the ground.

This issue needs to be accessed at multiple levels and with a multitude of actions that are discussed in the forthcoming paragraphs.

Major Reasons for Growing Unemployment Rate

The root cause of unemployment in India is that the economic growth of the country is unable to keep pace with the rate at which the population is growing.

India is an agrarian economy and hence majority of the population is dependent on the agriculture sector.

Agriculture in India is still largely dependent on rainfall, follows outdated, traditional practices and generates only seasonal employment.

In recent times, primarily due to climatic changes, the weather has become highly erratic and has often been the reason for farmer’s distress.

Another major reason for unemployment is inadequate attention paid to the industrial sector in India since the beginning.

During the 1950s and 1960s, China and India stared their economic journey together from almost the same level.

While India focused on bringing ‘green revolution’, which was its need of the hour, China decided to give a boost to its manufacturing sector.

Industrialization requires massive investments in R&D, training of manpower, procurement of raw materials, energy and expensive machinery which was inadequately available with India.

The comparative development graph for the two countries is for everyone to see.


With the break-up of the joint family system, the masked employment that was seemingly being done by a wide cross-section of our society, who simply attached themselves with the earnings of the joint family, are now highlighted as unemployed.

Recent Surge in Unemployment in India

The present unprecedented rate of unemployment, which was announced by Centre for Monitoring Indian Economy (CMIE) just before the general election was about whopping 31 million

Some of the following reasons are :

Education System: The education system in India is focused on creating only white collared jobs. Our colleges and universities are churning out degree holders who are not industry ready. There is a crying need for skill in our youth today so that they become employable.


Informal Sector: The informal sector in India constitutes a major chunk of the economy. Demonetization and introduction of GST served a heavy blow to cottage industry and small-informal workers and entrepreneurs. Numerous jobs were lost especially in the real estate and service sector because of these two factors.

Political Aspect: Due to the heightened state of polarization in the country has created an environment of insecurity that discourages investors, both domestic and foreign.

Also, sectors, where India was an international producer of products like beef and leather, is suffering because of an intense right-wing wave prevailing in the country. Resulting in millions of job losses as the industry has totally collapsed.

All these factors have constituted towards the increasing employment deficit in the country.


Proposed Steps to Tackle Unemployment in India

Revamp Education System: 

The present system of education needs a major change to meet the evolving pattern of demand for jobs.

Not only is there a requirement for re-orientation of the curriculums being run presently, but also to look at setting up and diversification of the courses in various fields to meet the explicit demand of skill-sets required by the industries in contemporary India.

Delivery Mechanism of Education Needs Improvement: 

The quality of education being imparted and infrastructure requirement, especially for government, run educational institutions needs a close examination and intensive upgrade.

Simply by opening more schools under Right to Education with pathetic infrastructure and incompetent teachers, who have low motivation and zeal to teach is counterproductive.

The pay and perks of teachers must be at the highest scale, offering them a status, which is higher than any other civil servants. It goes without saying that their selection must follow the most stringent process, only the best, from the best should be selected for this onerous responsibility of shaping the future of the nation.

Need for Rapid Industrialization:

An impetus to the manufacturing sector will boost job creation in a very major way.

The ‘manufacturing hubs’ being talked about by the government under ‘Make in India’ campaign should be rolled out with utmost urgency.

These manufacturing hubs will also arrest a major problem of mass migration of rural population to urban centers for work.

Skill development of Youth: Concurrent with the creation of manufacturing hubs will be the requirement of providing appropriately skilled youth for specific jobs.

The education system must fit together with this demand and identify the aptitude of students at an early age to segregate them for training for a specific field.

Schemes like Pradhan Mantri Kaushal Vikas Yojana for skill development are well conceived but poorly implemented.

Empower Rural India for Better Workforce Management and Employment: 

Employment opportunities in our backbone agrarian sector can be increased through intensive farming using technology, improving irrigation facilities by river water linking and micro-irrigation to make more land arable, an extension of community projects to rural India, like agro-infrastructure projects, e.g. cold chains, food processing, etc.

Organization of cooperative farming to overcome the problem of reducing land holdings and vocational skill training to prevent farm distress due to unpredictable weather and to resolve the problem of seasonal employment.

The farmers must be skilled for alternative employment that may be available in these ‘manufacturing hubs’ that are coming up in their vicinity.

Besides creating employment opportunities, the small-scale and cottage industries will help to reduce the dependence of farmers only on agriculture.

The village industries so planned must become supportive of the items being fabricated in the ‘manufacturing hubs’ being created by the government.

Labour-force Utilization during Lean Periods for Infrastructure Development under Government Schemes: 

The surplus labour force available during the lean period can be utilized for various public work programmes, like afforestation, reclaiming land, expansion of cottage industries and so on.

The schemes under which the above is being done already like the MNERAGA requires closer scrutiny for the necessity of work being carried out, its quality on completion and syphoning of funds by executioners.

Opportunities for Self-employment: Schemes like Start-up India and Stand-up India to encourage entrepreneurship have been poorly implemented.

Despite the scheme being available since 2016, only 1368 application were received, out of which only 502 have been approved by the Department of Industry Policy and Promotion (DIPP).

It is essential that the government comes up with more innovative and do-able self-employment schemes for unemployed youth, which can help generate more jobs for others as well.


It has been an ongoing endeavour by the government to address the problem of unemployment, but it has not been successful because of a sectional approach, where each government department is working in isolation and in some cases at cross purposes with each other to address the issue. 

A closer look at the ways to tackle unemployment will reveal that all the proposed actions are intimately linked with each other.

The delivery of education, including proficiency acquired in the desired field, is linked with skill-sets required by the industry.

Hence, unless the department of education bases its curriculum on the expectations of the industry and prepares the alumni accordingly, their education will be irrelevant.

Similarly, creation of rural communities to prevent urban migration will require the provision of local infrastructural amenities, diverse employment opportunities besides agriculture, which is linked with setting up of ‘manufacturing hubs’, which are in turn supported by cottage industry from the local village.

Therefore, many departments of the government will have to work in a synchronized fashion to harness our population dividend optimally.

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