Types, Causes and Costs of Unemployment in India

Table of Content

On the eve of the new year 2022, the country’s Ministry of Labor reports that the unemployment rate in India has reached a critical level of 6.5%. These figures are the highest over the past few years. Until 2020, the figure did not exceed 5% throughout the country.

Over the past 6 years, which the Ministry of Labor has published official data on the unemployment rate, sad statistics for the country have been noticed. The value is constantly increasing by about 0.5% per year. This can be explained by the difficult conditions for the development of foreign business. While independent growth, based on domestic demand and characterized by the development and strengthening of the labor market, is not planned.

The reasons lie in the lack of highly qualified specialists with higher education. A high percentage of the population is engaged in the shadow economy, which is not subject to official calculations. All this has a negative impact on official statistics, the result of which will be increasing unemployment in India over the next decade.

According to analysts, the only way to reverse the situation is to invest in the development of the labor market.
Among the main problems that do not allow to reduce the unemployment rate, one can single out the poor development of certain sectors of the Indian economy, which do not allow the country to develop steadily:

  • Underdeveloped infrastructure.
  • Poor development of agriculture (dependence on climatic conditions, a small percentage of machinery employed in the industry, a large number of intermediaries, a small area of ​​cultivated land).
  • High level of corruption.
  • Due to the fact that a fourth of the citizens are below the poverty line, the state is forced to spend extra funds to help these segments of the population.
  • Dependence on imported oil, as own coal reserves do not meet the needs of the population.

According to the calculations made, the division between urban and rural areas remains the same as before. In rural areas, this figure is an order of magnitude higher, since the city provides more employment opportunities.

The gender division is also unchanged. Both in the city and in the countryside, there are slightly more unemployed women than men, but this statistic has decreased compared to previous estimates.

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Types, Causes and Costs of Unemployment in India. (2017, Jul 25). Retrieved from


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