Unemployment in India: Types, Causes and Solution

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Unemployment in India: Types, Causes and Solution

Unemployment is a situation where in the person willing to work fails to find a job that earns them living.

Unemployment means lack of employment. In simple way, unemployment means the state of being unemployed.

The rate of unemployment varies over a wide range among the different states of India. When a person does not get a full time work, it is called under-employment. When the productivity and income of a person increase by changing his occupation, he is also known as under employed.

How the problem of unemployment is effecting young boys and girls? If we look at young boys (and even girls), we find that one of the reasons for which they cannot devote themselves to studies is the worry of unemployment facing them immediately at the end of the course.

Whether they pass or fail in their examinations, there is the almost certain prospect of unemployment.

When a student selects a course of study, he is not guided by considerations of tastes or aptitudes but by the prospect of earning a living.

Types: Unemployment may be categorized as follows:

  • seasonal unemployment,
  • industrial unemployment,
  • educational unemployment,
  • technological unemployment, and
  • disguised unemployment.

Agricultural laborers, farmers, workers of sugar mills, rice sellers, cotton ginning units and ice factories are included in seasonal unemployment.

Workers forced to be unemployed due to saving devices are counted in industrial unemployment.

Educated unemployment arises when a large number of educated people are unemployed or unable to secure a job.

Technological unemployment refers to the situation when people have been put out of work by the introduction of a superior technology in their idea of operation.

Disguised unemployment is a common feature in agriculture. It arises when more than the required human-resource have been engaged in the cultivation of the same plot. It is a sort of under employment.

Causes / Reasons:

1. Theoretical education: This chronic unemployment is in some quarters attributed to the system of education prevailing in our country. Our education is too theoretical. It turns too many arts graduates and too few engineers.

To make up for this deficiency Government has opened several technological institutes in different parts of India. However, this attempt, good as it is, will not solve the problem of unemployment.  

Already there are more technically trained men than there is employment for them.

2. Lack of full employment in industries: In the industrial segment, there is the same lack of full employment. There are not many mills and factories and the number of men employed in them is not large. Even the mills and factories that we have do not work to their maximum capacity either for lack of requisite machinery or for lack of adequate supply of materials.

3. Lack of alternative opportunities for agricultural workers: In the rural India, the picture is equally discouraging. Agriculture is the principal occupation of the majority of rural population. However, agriculture keeps the cultivators engaged for a limited part of the year. For many months every year the agriculturist remain idle and lives miserably.

4. Poor condition of cottage industries: In villages, unemployment is due to lack of cottage industries. The cottage industries are in a winding state. They give whole-time occupation to only a fraction of the people who depend on them.

5. Other factors: The other factors that are responsible for unemployment in India are:

  1. Excessive burden of population on cultivation;
  2. Rapidly increasing population;
  3. Low productivity in agriculture sector;
  4. Defective economic planning, and
  5. Large-scale production and mechanization.


Every country is trying to solve the unemployment problem in her own way.

1. Increase in national wealth through industrialization: The real remedy lies in an addition to the national wealth, in increased production of industrial goods. If there are more industries, there will be more avenues for employment, particularly for men and women with professional and technological training. Already the River valley projects and power-plant projects are finding employment for a large number of men.

It is only in a rapid industrialization of the country that we have a key to the solution of our economic problem. If more and more industries are established and more commodities are produced, there will be vacancies not merely for technically trained university men but also for laborers – skilled and unskilled.

If we have more wealth, we shall be able to pay our doctors better, we shall require more banks, more schools and colleges and more universities. Thus, rapid industrialization alone opens up new avenues for the educated people for the urban areas as also for mill and factory hands.

If the unemployment of the rural people is to be tackled, emphasis should also be laid on the revival of cottage industries. This will give part-time occupation to agriculturists and relieve the poor people who depend on these small decaying industries such as weaving, making carpets and mats or utensils of ball-metal.

The Government alone can help them with loan and find a market for their goods. If these industries are revived, the rural people will live in happiness and peace.

2. Establishment of Vocational and Technical training institutes: The government should open Technical and Vocational colleges and manual labor should be made compulsory. Big factories should be attached to these colleges. More stress is to be given to practical side.

3. Increased investment in heavy industries: Investment in heavy and basic industries and consumer goods industries should be increased to provide more employment with more production.

4. Revival of cottage and small scale industries: Cottage and small scale industries should be developed. Subsidies and other incentives should be given to private sector.

5. Modernization of agriculture: Modernization and mechanization of agriculture should be done. Wastelands should be utilized.

6. Improved transport and communication: Rural works programs should be increased means of transport and communication should be developed.

7. Self-employment should be encouraged: Government should take initiatives to encourage self-employment. Young entrepreneurs should be assisted with hassle free loans.

The unemployed are a great worry to the Government. Government tried to give some relief to unemployed people, especially to ex-Service men, by opening Employment Exchanges, which are machinery for finding suitable employment for young men and women.

Some Universities, too, have employment boards to help their graduates (and under graduates) to secure employment. Nevertheless, these are no complete remedy. They may have found Employment for some meritorious people.


One of the most disturbing problems in India has been the mounting rate of unemployment, both in the rural and urban sectors. In case of rural sector, there has been both unemployment and under employment. In urban sector, there has been both educated and industrial unemployment.

Unless unemployment problem is solved, the future of India cannot be bright. There will be no peace and prosperity in the country if jobless people do not get a proper channel. More attention should be given otherwise this problem can make jobless youths go to wrong direction.

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