BUSINESS REPORT

Lack of jobs or lack of skills(UNEMPLOYEMENT IN

INDIA)

Page of contents

1. Introduction
2. Types of unemployment
1) demand deficient,
(2) frictional
(3) structural, and
(4) voluntary unemployment.
1. Unemployment in India
2. Data from research
3. Causes of unemployment
1)Caste system
2)Slow economic growth
3)Increase in population
4)Agriculture is a seasonal occupation
5)Diversification of skills
6)Skill gap
4. Summary
Ray of hope
Recent Steps taken by government
 1. Introduction:

Unemployment is a term referring to individuals who are employable and seeking a job but are
unable to find a job. Furthermore, it is those people in the workforce or pool of people who are
available for work that does not have a job. Usually measured by the unemployment rate,
which is dividing the number of unemployed people by the total number of people in the
workforce, unemployment serves as one of the indicators of an economy’s status.
2. Types of unemployment
There are basically four types of unemployment:
(1) demand deficient,
(2) frictional,
(3) structural, and
(4) voluntary unemployment.
#1 Demand deficient unemployment
This is the biggest cause of unemployment that happens especially during a recession. When
there is a reduction in the demand for the company’s products or services, they will most likely
cut back too on their production, making it unnecessary to retain a wide workforce within the
organization. In effect, workers are laid off.
#2 Frictional unemployment
Frictional unemployment refers to workers who are in between jobs. An example is a worker
who recently quit or was fired and is looking for a job in an economy that is not experiencing a
recession. It is not an unhealthy thing because it is usually caused by workers looking for a job
that is most suitable to their skills.
#3 Structural unemployment
Structural unemployment happens when the skills set of a worker does not match the skills
demands of the job available or if the worker cannot reach the geographical location of the job.
An example is a teaching job that requires relocation to China, but the worker cannot secure a
work visa due to certain visa restrictions. It can also happen when there is a technological
change in the organization, such as workflow automation.
#4 Voluntary unemployment
Voluntary unemployment happens when a worker decides to leave a job because it is no longer
financially fulfilling. An example is a worker whose take-home pay is less than his cost of living.

3. Unemployment in India:
90% of Indian engineers lack key skills:

More and more studies seem to confirm what Infosys NSE 0.99 % cofounder
Narayana Murthy flagged in 2018— acute lack of adequate skills of Indian
freshers.
 Now a report by talent assessment firm Aspiring Minds shows a grimmer picture
of the ability of Indian IT engineering graduates. Only 10%, the report claims,
have adequate coding skills. Only between 3% and 4% are fit to fill roles like
product engineer or startup engineer

4. Some data

statistics has traditionally been collected, compiled and disseminated once every five years by
the Ministry of Labour and Employment (MoLE), primarily from sample studies conducted by
the National Sample Survey Office.[1][2] Other than these 5-year sample studies, India has –
except since 2016 – never routinely collected monthly, quarterly or yearly nationwide
employment and unemployment statistics. In 2016, Centre for Monitoring Indian Economy – a
non-government entity based in Mumbai, started sampling and publishing monthly
unemployment in India statistics.[3][4]
Unemployment is a major social issue in India. As of September 2018, according to the Indian
government, India had 31 million jobless people.
India’s unemployment rate stood at 6.1% in FY18, official data showed, highlighting the
challenge that confronts the Narendra Modi-led government. The data isn’t comparable with
that of past years, the government contended, in effect seeking to refute previous leaked
reports that said they showed the unemployment rate was at a 45-year high.

The Periodic Labour Force Survey (PLFS) of the National Sample Survey Office (NSSO) released
on Friday showed the unemployment rate in the country in FY18 was at 5.3% in rural India and
7.8% in urban India, resulting in overall unemployment rate of 6.1%.

India's rate of unemployment doubled in the past two years, according to the State of India’s
Environment (SoE) In Figures, 2019. This has particularly affected young graduates.
According to the report, the unemployment rate has gone up from four per cent to 7.6 in the
last two years (May 2017-April 2019). The unemployment rate in April 2019 was the highest in
two years. The rate for rural areas in this month was also the highest in this period.

SoE in figures was released by Delhi-based non-profit Centre for Science and Environment
(CSE) on World Environment Day. The data for it has been provided by the Centre for

Monitoring Indian Economy (CMIE), New Delhi.

 5. Causes of Unemployment:

#1 Caste System:
In India caste system is prevalent. The work is prohibited for specific castes in some areas.
In many cases, the work is not given to the deserving candidates but given to the person
belonging to a particular community. So this gives rise to unemployment.
#2 Slow Economic Growth:
Indian economy is underdeveloped and role of economic growth is very slow. This slow growth
fails to provide enough unemployment opportunities to the increasing population.
#3 Increase in Population:
Constant increase in population has been a big problem in India. It is one of the main causes of
unemployment. The rate of unemployment is 11.1% in 10th Plan.
#4 Agriculture is a Seasonal Occupation: Agriculture is underdeveloped in India. It provides
seasonal employment. Large part of population is dependent on agriculture. But agriculture
being seasonal provides work for a few months. So this gives rise to unemployment.

#4 Diversification of skills
Job losses is not the sole problem, finding people with the right skills for a job is a challenge
Job losses undoubted is a significant cause for unemployment in India as much as anywhere
else in the world. But, it is not fair to blame all instances of unemployment to job losses caused
mostly by changes in the economy and closure of businesses

#5 Skill Gap
Skills gap incidentally is a general term. The Team lease report throws light on specific skills that
are lacking. At the frontline level in the logistics sector, for instance, illiteracy is the biggest
challenge followed by language inadequacy and workplace hygiene
90% of Indian engineers lack key skills. More and more studies seem to confirm what Infosys’s
0.99 % cofounder Narayana Murthy flagged in 2018— acute lack of adequate skills of Indian
freshers.
.
Now a report by talent assessment firm Aspiring Minds shows a grimmer picture of the ability
of Indian IT engineering graduates. Only 10%, the report claims, have adequate coding skills.
Only between 3% and 4% are fit to fill roles like product engineer or startup engineer

6. Summary

A ray of hope
The World Bank recently estimated that India needs to create 8.1 million jobs a year to
maintain its employment rate, which has been declining.
Given India’s demographic dividend and urgency to create jobs, the manufacturing sector could
prove to be a large employer that provides decent income opportunities.
For example, rapid modernization of the food processing sector could be one way of increasing
its export potential as well as improving employment elasticity-to-growth and investment in it.

Recent Steps taken by Government:

PM Modi forms Cabinet panels to look into unemployment:-

In order to tackle the two major crises facing the government in its second term - economic slowdown
and unemployment - Prime Minister Narendra Modi has constituted two high level Cabinet Committees
to look into the issues.
A month before the first Budget of the new Modi government, suggestions of these panels are bound to
have an impact on the Budget to be presented on July 5.
A total of eight Cabinet Committees have been constituted, which are Appointments Committee of the
Cabinet, Cabinet Committee on Accommodation, Cabinet Committee on Economic Affairs, Cabinet
Committee on Parliamentary Affairs, Cabinet Committee on Political Affairs, Cabinet Committee on
Security, Cabinet Committee on Investment and Growth and Cabinet Committee on Employment and
Skill Development.
Of the eight panels, the one on economic affairs and the other on employment and skill development
will directly deal with unemployment and slipping GDP figures. This is the first time that such panels
have been setup.
Both of these panels will be headed by PM Modi himself.