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Bourgeoning Unemployment And The Dire Need For NEP In India

Unemployment in India is at an all-time high, rapidly moving from bad to worse. This issue is currently being viewed as one of the most pressing challenges by the people of this nation[1].

The unemployment rate which had increased to an exorbitant 10.99 percent during the pandemic has now declined to an extortionate 6.6 percent[2] in 2021. A report published by the Pew research center stated that approximately 18.6 million Indians were jobless and 393.7 million worked in poor paying jobs.

The data published by CMIE identified that the unemployment in urban India increased to 8.8 percent and in rural India increased to 9.2 percent from 7.1 and 6.3 percent respectively. Another report by the world bank's forecast of economic growth and pew center for research stated that the labor participation rates have been at the lowest since 2016 and the unemployment caused due to the pandemic had pushed several Indian households into poverty[3].

The pandemic played an important role in worsening the unemployment situation in an already struggling economy. The fact must not be denied that the country has been facing severe unemployment crisis since the last 8 years. A report published by the Pew research center stated that the unemployment rate in India has rapidly increased since 2012 when it stood at a relatively small 2.1 percent.

Several reasons playing into this increase are lack of infrastructure, adoption of capital-intensive policies, low rate of physical capital formation and fast growth of the working force, unequal distribution of land, ignoring the role of agriculture in creating more employment, stringent labor protection laws, insufficient high-skill force, stagnant growth, largescale informal employment, etc.

The world system theory suggests that the world is divided into three parts Core countries, semi periphery countries and the periphery countries. Where on the one hand the core countries constitute of 'high skill, capital intensive labor' the rest of the countries on the other hand comprise of 'low skill, labor intensive production'. E.F. Schumacher in his book 'Small is beautiful: A study of economics as if people mattered'[4]

States that developing countries are in a constant dilemma as labor intensive policies very often result in promoted employment and retarded growth and capital-intensive policies result in retarded employment and promoted growth, for which Schumacher suggests these countries adopt the 'intermediate technique' which seeks to find a soft middle ground between both the policies.

With the growing concerns regarding unemployment the government has made several attempts to tackle this issue. These constitute schemes like MGNREGA which seeks to guarantee 100 days of employment within a year to its beneficiaries, National rural employment program which seeks to provide equal job opportunities in rural areas, the Deen Dayal Antyodaya yojna aims to provide those living poverty with industrially recognized skills, etc.

Even though these attempts of introducing special employment programs sound attractive and appear to combat certain very important issues concerning unemployment but are still failing to accomplish their goals, considerably. The nature of the jobs which these programs provide very often result in the labor becoming less productive.

Further, due to the corrupt nature of the machinery, the funds allotted under these schemes come to no use as they frequently get embezzled. The jobs provided under these schemes do not provide permanent employment as a result of which the benefit incurred from these schemes is minimal compared to the capital invested.

Recent trends identify that various countries have observed positive changes after adopting comprehensive 'national employment policies', to tackle the problem of unemployment. In India, the idea to introduce 'national employment policies' was first introduced by the united progressive alliance in 2008 which was later reintroduced in the first meeting of 'BRICS employment working group' following which the NDA initiated its work on creating a national policy for India.

The NEP seeks to form a policy document which takes into consideration gender, caste, ecological concerns, various stakeholders, departments and sectors. The document intends to instill a framework which will specify the role and responsibilities needed for implementation of policies and for monitoring their progress.

This comprehensive set of policies must focus on increasing production, prioritizing more productive forms of employment, adopting appropriate production techniques, adopting population control policies, promoting technical and vocational form of education, proper man-power planning, addressing issues concerning seasonal and technological unemployment, addressing low employment rates of women and the disabled, encouraging self-employment, focusing on small scale industries, cottage industries and agricultural industries, etc.

Report published by the center for sustainable employment suggested that the national employment policies must adopt the 'universal basic services' approach, must give urgent attention to the agriculture sector and should promote public investment within the same, give attention to the arts and crafts industry and creation of jobs in efforts being made towards green energy and sustainable development.[5]

  1. Kat Devlin, 'A Sampling of public Opinion in India' (Pew Research Center, 25 March 2019)
  2. Unemployment Rate in India (CMIE).
  3. Rakesh Kochar, In the pandemic, India's middle class shrinks and poverty spreads while china sees smaller changes (Pew Research Center, 18 March 2021).
  4. E.F. Schumacher, 'Small is beautiful: A study of economics as if people mattered' ( HarperCollins 1973).
  5. Amit Bonsale, 'state of working India' (Azim Premji University 2018).
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