India’s falling jobless rate
Date: 05 January 2022 Tags: MiscellaneousIssue
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).
Background
The rates have shown a declining trend after economic activities were suspended due to Covid-19 restrictions in many states.
Details
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The rates had stood at 7 per cent in November last year and 9.1 per cent in December 2020.
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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.
Unemployment risks
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Urban unemployment had reached a double-digit rate to around 10.09 per cent in mid-December.
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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
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Disguised 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.
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Seasonal Unemployment
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.
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Cyclical Unemployment
This type of unemployment occurs due to down swing in business activities. It occurs in regular cycles and is usually a shot-run phenomenon.
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Educated Unemployment
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This type of unemployment occurs because individual’s qualification does not match the job.
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Faulty education system, mass output, lack of employable skills and dwindling formal salaried jobs are mainly responsible for this phenomenon.
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Structural Unemployment
This type of unemployment occurs due to drastic changes in the economic structure of a country.
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Frictional Unemployment
Frictional unemployment is caused due to improper adjustment between supply of labour and demand for labour.
Factors affecting unemployment
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Lack of employable skills
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Increase in population to job ratio
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Lack of industrialization
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Economic recession
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Faulty government policies