Meaning of Full Employment
Full employment refers to a situation in which all the workers who are capable of working and willing to work get employment at reasonable wages. It does not imply that all adults have jobs.
Meaning of unemployment – Unemployment refers to a situation in which the workers who are capable of working and willing to work do not get employment.
A person working 8 hours a day for 73 days of the year is regarded as employed on a standard person-year basis. The following are the three estimates of unemployment generated in the 27th round of NSS (National Sample Survey).
Usual Principal Status unemployment: It is measured as the number of persons who remained unemployed for a major part of the year. This measure is more appropriate to those in search of regular employment e.g., educated and skilled persons who may not accept casual work. This is also referred to as ‘open unemployment’.
Weekly Status unemployment: It refers to the number of persons who did not find even an hour of work during the survey week.
Daily Status unemployment: It refers to the number of persons who did not find work on a day or some days during the survey week.
Causes of Unemployment
High Population growth: The galloping increase in the population of our country during the last decade has further aggravated the unemployment problem in the country. Due to the rapidly increasing population of the country, a dangerous situation has arisen in which the magnitude of unemployment goes on increasing during each plan
Insufficient Rate of Economic Progress: Although India is a developing country, the rate of growth is inadequate to absorb the entire labor force in the country. The opportunities of employment are not sufficient to absorb the additions in the labor force of the country, which are taking place as a result of the rapidly increasing population
Absence of employment opportunities in activities other than agriculture: As enough other employment opportunities are not available, agriculture is the principal area of employment in our country. Thus, pressure on land is high, as about 2/3 of the labor force is engaged in agriculture. The land is thus overcrowded and a large part of the
the workforce is underemployed and suffers from disguised unemployment.
Seasonal Employment: Agriculture in India offers seasonal employment; thus agricultural labor remains idle during the off-season.
Joint Family System: The existence of a joint family system in India promotes disguised unemployment. Usually, the members of a family work on their family farms or do family business. There are more workers on a family farm than what would be needed on them.
Increasing turnout of students from Indian Universities: During the last decade, educated unemployment has increased due to the rapid turnout of graduates by the Indian universities. Moreover, in the Indian educational system, more emphasis is placed on engineering and other technical subjects rather than on Arts subjects. But there is unemployment amongst technical graduates as well. There is a lack of proper vocational education in the country.
Slow Developing of Industries: Industrialization is not rapid in our country and industrial labor finds few job opportunities. The agricultural surplus labor force is not absorbed by the industrial sector. This leads to disguised unemployment in agriculture.
Measures to Solve Unemployment Problem in India
A close reading of the Five-Year Plans reveals that in every Five- Years Plan, employment expansion has been emphasized as an objective of development. Despite all the plan pronouncements, the backlog of unemployment has increased. This is because each Plan was not even able to absorb the new entrants in the labor force.
The following measures have been suggested for solving the unemployment problem in our country:
A Change in the pattern of investment
The planning process in the initial stages gave importance to an investment allocation pattern with a high capital-labor ratio. Therefore, a shift in the emphasis to mass consumer goods industries would generate more employment to absorb the unemployed labor force.
Moreover, an increase in the supply of such goods may help arrest the rising price level and increase the economic welfare of the people. This is the wage-goods model of development suggested by Vakil and Brahmanand.
Encouragement to small enterprises as against big enterprises
The employment objective and the output objective can be achieved if greater investment is directed to small enterprises rather than to large enterprises.
Now that the Government wants to undertake decentralized development with emphasis on small-scale enterprises, it would be desirable to reorient credit, licensing, raw material allocation, and other policies in such a manner that both employment and output are enlarged simultaneously.
The problem of Choice of technique
It would be better to switch over to intermediate technologies till the process of industrialization gets such a powerful momentum that the new entrants to the labor force can be absorbed. During the period of rapid growth in the labor force, it would be advisable to adjust the choice of techniques consistent with the employment objective. Intermediate technology would be more suited to Indian conditions.
Encouragement of New Growth Centres in Small Towns and Rural Areas
Experience of planning has revealed that the overcrowded metropolitan centers have received a large share of investment. Therefore, the smaller towns should be developed as new growth centers for the future. The establishment of small industrial complexes can increase employment opportunities and provide flexibility to the
Subsidies on the Basis of Employment
All schemes of subsidies and incentives to large and small industries have helped output maximization and greater use of capital resources. The pattern of subsidies should be altered. The creation of more employment should be treated as the basis for the grant of subsidies and incentives.
This will shift the entire structure of government support from the large-scale producer to the small-scale producer as this is more consistent with the objective of employment generation and achieving equality and social justice.
Reorientation of Educational Policy
One great defect of our educational system is that it leads one to take up the professional degree only. The high degree of unemployment among the educated signifies the urgent need to reorient our education system to greater employment opportunities. The education system should be more diversified. It should have more short-term vocational courses that will cater to the local employment needs.
The development of quality education is a prerequisite for the development of a nation as it is the remedy for all problems including the problem of unemployment in the country. Hence, a high priority needs to be accorded for education in public expenditure.
Underemployment in Rural Areas
N.S.S. data have revealed the existence of a high degree of underemployment in India. The total number of underemployed persons available and willing to take up additional work is estimated to be more than two crores. It is necessary to organize the Rural works Programme.
Failure of implementation of Rural Works Programme underlines the relatively low importance given to the rural sector to provide additional employment to millions of landless laborers and small and marginal farmers. Urgent action is needed in this direction so that work opportunities grow in the rural areas. This will raise the level of income and employment in rural areas and reduction in poverty levels.