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The Problem Of Unemployment In India: Measurement, Causes, Policies

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Unemployment is when any person wants to get a job but not able to get any work. NowAdays unemployment is increasing day by day. There are some causes of unemployment why it is increasing day by day:

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  1. Caste System: In India, what happen those people who deserve to get a job, but they wouldn’t due to caste system. They prefer to schedule caste instead of general one and it help to rise the unemployment in India.
  2. Slow Economic Growth: The economic growth is very slow in my nation. It provides enough opportunities like unemployment to increasing population day by day.
  3. Increase in Population: Increase in population one of the major causes being unemployment in India. The statistics of unemployment is . in th Plan.
  4. Defective Planning: it is also one of the causes of increasing unemployment in India. Government does not do any plan for future in between supply and demand for labour. No plan or any scheme for unemployment though.
  5. Causes of Under Employment: Shortage of sources like electricity, coal and raw material it also helps to incline the statistics of unemployment.

Measurement of unemployment

There are three approaches to help the measurement of unemployment in India:

  1. Usual Status Approach: this approach records that those persons who get their work casually and they would not get any profit from work. They just get their work on calling.
  2. Weekly Status Approach: In this approach, it states that according to survey, those persons who does not have a job or not get any profit from job, and still looking for job even for an hour, day or a week. he/she still counted as unemployment.
  3. Daily Status Approach: In daily status approach, under the survey it stated that how many populations they go to work for 8 hours and how many are unemployed. It also captures that how many unemployed days are for who is usually unemployed but also the unemployed for those who is employed.


There are seven causes of unemployment in the Australian Economy under cyclical, Structural and frictional. In cyclical there is one cause which is Demand-Deficit unemployment whereas in Structural one reason is Advance in Technology and second is Job Outstanding. And the last one is Frictional which comes Voluntary, Relocation, New Entering the Workforce and Re- Entering the Workforce.

  1. Cyclical Unemployment: it is one of the main causeS of high unemployment. It is tied to the business cycle so that’s it knows as cyclical. It happens when demand and revenue of business both are goes down. If the demand goes down, then the companies wouldn’t have enough work for worker and company has to lose their valuable employee in which they invest a lot. This is the reason how cyclical unemployment begin.
  2. Structural Unemployment: structural unemployment state that difference between availability of job and skills of person. It happens when educated people look after the job but doesn’t get it. cause of structural unemployment is that IT comes in every trade. Person must know all training regarding ITs so in some place robots are replacing by them.
  3. Frictional Unemployment: some people they leave their job for some person matter, or some they are looking for another better job and some people they quit quietly. When they start again, the BEA include them as unemployed.


Underemployment comes when any worker does work in low wages but want to do more work from how much he/she has to do but at the same wage rate. The rate of underemployment is same as unemployment which is 5. 7%. Employers they get a huge amount of benefits from worker to make part time employees. People who want to take experience and lack of experience though or want to make a carrier in that path they do work underemployment. Underemployment is same as like the unemployment.

Why Unemployment differs from region to region

Every region has a different rule in every trade while in industries, labour market or might be in government rules and regulation. Unemployment is also different from region to region because they have distinct social environment and labour market. For example, some of the region they all are depend on some kind of resources or any type of industry and if that resource or industry would be gone then the unemployment of that region must be high. Some people what they do, they are starting migrate from region to another region and if they wouldn’t get any job they also help to rise in unemployment. This demographic chart shows the unemployment rate by individual state in Australia that where unemployment is on top and in which state.


There are couple of policies are Indian government implement to decrease unemployment. They are:

Monetary Policy – cutting interest rates to boost aggregate Demand.

Fiscal policy – cutting taxes to boost AD.

Monetary Policy: monetary policy includes cutting interest rates. It helps to people that they borrow less and movie them to spend and invest. This help to incline the aggregate demand and rise in GDP and demand deficient unemployment will be low.

Fiscal policy: fiscal policy helps to decline in unemployment and inclined in aggregate demand and the economic growth. The government have to follow some other policies like fiscal policy in which people invest and spend. GDP is also increasing with an increasing of aggregate demand. If any firm or industry they supply and produce more, obviously they need more employee to work and if they hire a worker there will be employment. It helps to decrease the unemployment.


There are some solutions that government has to adopt to decrease unemployment in India. The solutions are:

The first solution is that control population. The government must control to increasing population and encourage to people to have little families.

The education system should be improved and start some skill labour forces and system should be practical.

Government should ban on caste system. Caste system is one of the main reasons to increase unemployment. It must be stopped. Those candidates who are skilled and who deserve the job and must give a chance to them.

Government should allow foreign organisation to start their business in India.

01 April 2020

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