Design

Thinking
Urban Unemployment

Tiirth Jhamb (15 JGBS)

20152037
Problem

India is a developing economy. The nature of Unemployment therefore differs significantly

from what is prevalent in industrially advanced countries. Unemployment in advanced

countries is the result of a lack of effective demand. This implies that in these economies the

machines are stagnant and the demand for labor decreases because the demand for industrial

products no longer exists. The problem of unemployment has taken on serious proportions.

and threatens to get bigger and sharper in the coming years.

In the first decade of the 21st century, the Indian economy grew more than seven times a year

with growth rates above the average of around 5% in the 1990s. However, these high

production growth rates were not accompanied by employment growth. The inability of high

rates of growth in India, generating enough jobs, was the subject of sustained attention for the

first time at the end of 1990s, when total job creation decreased significantly.

Although job generation has accelerated since 2000, it has not recovered the rates achieved in

the early 1990s and in the late 1980s. Between 2000 and 2005, total employment increased

by 2.8% per year. During this time, the Labour Force Participation rate of adult men and

women (above 30 years) saw a slight increase, while the participation rates of young men and

women (aged 15-29) declined. Between 2005 and 2012, employment growth decreased

significantly, from an annual rate of around 2.8 per cent in the previous five-year period to

just 0.48 per cent. During this period, the employment rates of all men and women (above 15

years) have decreased, especially for women i.e. from 42% to 31%. The Labor Force includes

both those who actively participate in the work and those who are unemployed but actively

seek work. For the whole decade, total unemployment rate slightly decreased from 2.4% in

1999-2000 to 2.2% in 2011-2012. Also, the male unemployment rate has been reduced from

2.6 to 2.1%, the female unemployment rate increased from 1.8 to 2.4 percent.
Causes of Unemployment

1. Lack of the stock of physical capital: The main cause of unemployment and

underemployment in underdeveloped countries such as India is the lack of capital in

relation to the needs of the growing labour force. In the modern world man can hardly

produce anything. Even the primitive man needed some basic tools, such as a bow and

arrow, to focus on hunting his life and earning a livelihood. With the growth of

technology and specialization, we need much more capital to participate in the

productive activity. If you are a farmer, you need a piece of land and also a plough, a

couple of oxen, seeds and food grains and other necessities of life to feed yourself

during the seed. Now, if the labor force grows faster than a country's capital stock, the

entire workforce cannot be included in productive jobs, as that would not be enough

production tools to employ them.

As a result, the country's capacity to provide productive employment to new entrants

in the labour market is very limited. This is expressed in two ways: first, widespread

unemployment in urban areas. Second, it manifests itself in declared unemployment

in rural areas and disguised unemployment in agriculture.

2. Unequal Distribution of Land: The unequal distribution of land is another cause of

unemployment in developing countries like India. This means that many agricultural

households do not have enough access to land, which is of great value to agricultural

production and employment.

The subdivision of land ownership under the pressure of rapid population growth

since 1951 has more limited access to land for many farm households. As a result,

many self-employed workers in agriculture have become landless agricultural workers

suffering from acute unemployment and underemployment.

3. Use of Capital-Intensive Techniques: The use of capital-intensive production

techniques, especially in the consumer goods industries, for which other labour-

intensive techniques exist, is an important factor in the slow growth of the labour

force. 'employment. Prior to 1991, under the 1956 Industrial Policy Resolution, the

development of the consumer goods industries was open to the private sector.

The private sector prefers to invest in capital-intensive assets and equipment based on

technologies developed in Western countries where labour is scarce. According to

them, the labour-intensive workforce has low productivity and can only generate a

small surplus.

An important reason for using capital-intensive techniques was the availability of

cheap capital. I have even read companies from the small modern industry, which

have been seen to generate great employment opportunities, which is a use of intense

capital production techniques.

4. Neglecting the Role of Agriculture in Employment Generation: The abandonment

of agriculture to create jobs is an important factor in weak job growth. Agriculture,

while having a surplus labour force, can create employment opportunities if an

appropriate development strategy is adopted. For example, empirical evidence shows

that in one hectare of irrigated land, the number of hours worked is almost double that

of one hectare not irrigated. Irrigation requires more work to irrigate the fields.

However, since the area cultivated per hectare is much higher, harvesting and

threshing are more laborious. In addition, irrigation allows the use of mixed crops,

which greatly increases the employment potential of agriculture.

The creation of important jobs in agriculture requires the new technologies of the

Green Revolution to be widely disseminated and adopted in the backward and

backward agricultural regions of India.

Solution

The problem of employment among today’s youth is serious. There are dozens of

candidates for each vacancy. Of the many candidates interviewed, only a few get the

job. A student spends several years studying. This situation is worrying because these

young Indians are grappling with the problem of unemployment after completing their

university and higher education. To curb this problem, government can start investing

in infrastructure in Rural Areas and develop them. With the development of

infrastructure, they can attract many FDI’s to the country and also they can provide

loan to developing sectors of the economy. The villages should be economically

independent, so that the villagers would not rush to work in the cities. This would

ensure that large cities are not overpopulated with a huge population. This would help

to maintain the balance between work/vacancy and jobseekers. They should also

focus on changing the contemporary education system. Instead of simply providing

theoretical training, students should take vocational training so that they can start

working once their studies are completed. This institute prepares a student with skills

and knowledge for a particular job.

Desirability:

For Improving the Skills of the Youths in the Country

With the help of the vocational training the Proficiency level of the candidates can be

improved. It can be carried out along with their basic educational attainment. The

unemployed individuals will have the chance to improve their chance and match the

level which the job position requires. The government can play a key role in this by

introducing certain programs where the youths potential can be harnessed further.

Because of this initiative the majority of the populations will be benefitted and it will
be desirable for the government to roll out certain programs related to vocational

training aspect.

Infrastructure Development in Rural Areas

By investing in the infrastructure the development can be enhanced in the rural parts

of the country. More jobs can be created in the rural parts of the country and this will

result in reduction of crowdiness in the urban parts of the country. This will be

balanced approach where the rural India can be brought to the level at par with the

Urban India. This idea will be desirable by government because there is a good cause

behind this and it would reach out to majority of the population.

Viability

Vocational Training:

The main question that arises in this training program is “ Will it be financially

viable?”. The cost of operation can be met through corporate donations and NGOs.

Many companies who practice CSR activities may indulge themselves in this

initiative. The programme is feasible because operation cost problem can be solved

easily and also the price the candidates have to pay will be extremely minimal in

nature. So, from the angels it is a win win situation for both the government and the

candidates.

Infrastructure Development in Rural Areas:

The government can build infrastructure out of its own budget though initially it may

cost high. But in the long run the outcome would be fruitful. With the advancement in

the infrastructure there would be parity in both the urban and rural India. The

population can be dispersed and the over crowdiness can be avoided in the urban part

of the country. Also, many companies can help the government in financial terms to
develop the infrastructure. Through this plan, more and more employment

opportunities can be created in the rural India.

Feasibility

Vocational Training:

This program of vocational training is feasible because the government is involved

and the people can seek for query from the helpline number. This program can be

positioned as a benefit based positioning. It will target the audience who are in need

of it to improve their skill sets. It can be advertised through social media platforms

and even posters too. There would be advertisements in the reginal news channels and

it can be carried out with a localite personnel.

Infrastructure Development in Rural Areas:

With the help of corporate funding and government’s own fund the infrastructures can

be built in the rural parts. The roll out of the construction in rural areas won’t stop

because the government is involved. The central government can also provide aids to

the respective state governments to build and harness the infrastructure. Also the

corporate guidance can help government to maintain its expenditure. It will remain

financially viable and in the same time this initiative will benefit a lot of people.

Through this more employment opportunities can be created and the Indian economy

will develop as people start getting jobs.