Chapter 3

Government Policies to Reduce Unemployment in India

In India, present scenario is that parents are putting lots of money for their
child education and dreams their child as a person with successful career and same
is the dream of child. But reality turns to frustration out of unemployment. This
resource is about problem unemployment, factors helping in increasing this
problem and what all measure has been taken by our government. This include
many government policies run by our government to alleviate Unemployment.
Some of the policies are follows:-

1. Integrated Rural Development Programme (IRDP):

In 1978-79, government of India introduced IRDP to create full employment

opportunities in rural areas. Under this programme agriculture, animal husbandry,
forests, fisheries, small and cottage industries, construction of roads and canals etc.
are to be developed in all the 5111 development blocks. Moreover, to provide more
employment, in the Seventh Plan a sum of Rs. 312 crores was spent on this
programme. It benefited 182 lakh families.

2. Drought Prone Area Programme (DPAP):

This programme was launched in 70 such districts of 13 states as were prone

to drought. The programme has proved fruitful particularly in removing seasonal
unemployment. In Sixth Plan, the programme provided 17 crore and 70 lakh man-
days of employment. In the same period, a sum of Rs. 301 crores was made on the
programme. In Seventh Plan, Rs. 474 crores has been spent for the programme.
3. Training for Self-Employment:

This programme was launched on 15th August, 1979 by the Government of

India. It is called National Scheme of Training of Rural Youth for Self Employment
(TRYSEM). The main objective of this programme is to reduce unemployment
among the youth. During Seventh Plan about 11.6 lakh youth were imparted
training under the programme.During training period, young men are given
financial assistance. On completion of training, they are asked to prepare project
report. Arrangements are made to get them financial assistance from the banks.
Every trained youth is given a financial help varying from Rs. 3,000 to Rs. 5,000 to
start his work.

4.National Rural Employment Guarantee Act 2005:

National Rural Employment Program V Started as a part of Sixed Plan and
remained continued under the Seventh Five-year Plan. V Creates employment
opportunities of the order of 300 million to 400 million man-days every year. V
Amis at providing employment in the lean agricultural season. It aims to enhance
livelihood security in rural areas by providing at least 100 days of wage
employment in a financial year to every household whose adult members volunteer
to do unskilled manual work.

5. Jawahar Rozgar Yojana:

The Jawahar Rozgar Yojana was started on 28th April 1989. The objective of
this Yojana is to provide employment to at least one member of each poor rural
family for fifty to a hundred days a year at a work place near his residence. A
special feature of the scheme is that 30% of the employment generated will be
reserved for women. The Central government will finance 80% of the programme
and the state government will have to bear only 20% of the expenditure of this
scheme. In 1989, National Rural Employment Programme and Rural Landless
Employment Guarantee Programmes were merged in the yojana.

6. Self-employment to Educated Unemployed Youth:

In 1983, a scheme namely self-employment of educated unemployed was

initiated. Under this scheme, loans up to Rs. 25,000 are given to those educated
unemployed who have no other financial resources. This scheme is enforced by
District Industries Centers. Government will give 25 percent as subsidy of the
loans given by the banks under this scheme.

7. Nehru Rozgar Yojana (NRY):

This Yojana was started in 1989. There are three schemes under it. (1) Under
the first scheme, subsidy is given to urban poor to set up micro enterprises. In
1995, under this programme, 1.25 lakh families have been benefited. (2) Under the
second scheme arrangements have been made for wage-employment to labourers
in cities with less than 10 lakh population by providing Indian Economic
Development and Elementary Statistic 'them basic facilities. In 1995, under this
scheme 93 lakhs man-days of employment have been provided. (3) Under the third
scheme, urban poor in the cities are to be provided employment opportunities in
jobs like house repairing etc.

Fig. 3.1
  This is the statistics of Unemployment Rate in India from
2008-2018.

In India, the unemployment rate measures the number of people actively

looking for a job as a percentage of the labour force.

Fig. 3.2
  Above chart shows Unemployment rate per state.

In 2016, the country’s unemployment rate was 7.97%, with rural

unemployment at 7.15% and urban unemployment at 9.62%. In rural areas,
unemployment figures are lower due to the MGNREGA. In the Union Budget
2017-18, the MGNREGA received Rs 48,000 crore ($7.5 billion). While the Act
helped lower unemployment rates, it has not been able to tackle disguised
unemployment or underemployment—and such initiatives focus only on unskilled
employment.
 The recent Annual Employment and Unemployment Survey of the
Government of India brought out startling facts about the unemployment scenario.
According to this survey, the labour force participation rate (LFPR) nationally
stood at 50%, which is much below the potential level, and the worse is that female
participation is much lower than male participation. Of course, it’s a recognised
fact that India has been experiencing unemployment problem for quite some time,
but no significant improvement has taken place, as data suggest further
deterioration of the crisis.

Many are convinced that providing enough employment opportunities in

India is not easy, especially when half the population is below the age of 25 and
will soon enter the job market. This is a huge challenge for the government. In
response, the government has taken some important initiatives including Make-in-
India, Skill India and Start-up India. But what currently and over the last three
years the economy has been witnessing is high growth, which means there has
been almost continuous rise in GDP or India has dramatically scaled up its growth.
However, correspondingly, job-creation or job growth hasn’t taken place. This has
led us to believe that India is witnessing a ‘jobless growth’.

Jobless growth is a dangerous trend—it creates social tension and

disharmony. It spreads further inequality, which may lead to societal collateral
damage. One of the probable reasons for jobless growth is automation in most
economic activities. Sectors like automotive, computers, finance, transport, etc, are
currently witnessing dramatic automation growth. As a result, employment
opportunities are gradually sinking. This survey also brought out serious decline in
employment growth. Even sectors like jewellery, which was one time one of the
top export earners for the country, is currently witnessing reduction in
employment. Of course, the government has, in the past, taken initiatives to create
employment by connecting job-seekers to potential employers through the ministry
of labour and employment which launched the National Career Service portal. It is
a common platform connecting job-seekers, employers, skill providers, placement
organisations and counsellors. The government also initiated the Pradhan Mantri
Kaushal Vikas Yojana (PMKVY)—a skill development scheme for which the
ministry of skill development and entrepreneurship has been made the nodal point
to help young people learn industry-relevant skills and enable them to secure
skilled employment.

Such schemes may create employability through skill upgrading, but the sad
story is that one of India’s largest employers of educated youth—the IT sector—
has been laying off employees. Companies like Wipro, Cognizant and Infosys have
announced they will downsize. While there was 8.6% growth in the IT sector in the
2016-17 fiscal, jobs grew by only 5%, compared with 6% in 2015-16. This
downward trend is predicted to continue, with a 20-25% reduction in growth in
employment in the sector over three years.

Industry experts blame this on automation, artificial intelligence and stricter

visa norms in markets such as the US, UK and Australia. Some companies have
announced they will focus on new technologies rather than concentrating on low-
skilled IT jobs. But this technological advancement may not adversely impact job-
creation because India can move towards a knowledge-based economy by focusing
on high-value manufacturing, high-end services sectors and enrolment in quality
higher education.