The unemployment rate in India reached a four-month high of 7.9 percent in December 2021, according to data from Centre for Monitoring Indian Economy (CMIE).
The rates have shown a declining trend after economic activities were suspended due to Covid-19 restrictions in many states.
The rates had stood at 7 per cent in November last year and 9.1 per cent in December 2020.
The urban unemployment rate rose to 9.3 per cent in December while the rural unemployment rate increased to 7.3 per cent from 6.4 per cent.
Urban unemployment had reached a double-digit rate to around 10.09 per cent in mid-December.
Decline in urban employment will show the impact on better-paying organised sector’s jobs. The fresh restrictions are further going to impact the rates.
Different types of unemployment
It refers to a situation of employment with surplus manpower in which some workers have zero marginal productivity. Here, more people are doing work than actually required.
This type of unemployment occurs during certain seasons of the year. People involved in such type of activities may remain unemployed during the off-season.
This type of unemployment occurs due to down swing in business activities. It occurs in regular cycles and is usually a shot-run phenomenon.
This type of unemployment occurs because individual’s qualification does not match the job.
Faulty education system, mass output, lack of employable skills and dwindling formal salaried jobs are mainly responsible for this phenomenon.
This type of unemployment occurs due to drastic changes in the economic structure of a country.
Frictional unemployment is caused due to improper adjustment between supply of labour and demand for labour.
Factors affecting unemployment
Lack of employable skills
Increase in population to job ratio
Lack of industrialization
Faulty government policies