Unemployment means idleness of manpower. The state in which labour possesses necessary ability and health to perform a job, but does not get job opportunities, is called unemployment.
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The nature of unemployment differs according to the level of economic development in a country. India is an underdeveloped economy. The following types of unemployment exist in India:
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1. Rural Unemployment:
India is essentially a rural economy. According to 2001 Census, 72.2 per cent people live in villages. Agriculture is their principal means of livelihood. Two kinds of unemployment exist in rural areas:
(a) Seasonal Unemployment:
This is primarily confined to agriculture. Agriculture does not provide employment round the year. It is also known as perennial unemployment. Sowing and harvesting season ranges between five and seven months.
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For the rest of the period the cultivator has to remain idle. Experts believe that an Indian cultivator remains unemployed for five to six months. When the next sowing season starts he again goes back to cultivation. Therefore, it is called seasonal unemployment.
(b) Disguised Unemployment or Underemployment:
It is again a feature of the agrarian economies. When more people are engaged than actually required for production, it is called disguised unemployment. If a part of labour force is withdrawn from the farm the total output of the farm will remain unchanged. The withdrawn labour force will be termed as disguisedly employed.
Under this situation the marginal productivity of labour (i. e., the addition to the total product) over a wide range is zero. Indian agriculture is a self-employing sector. There is absence of alternative occupations in the economy.
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The burden of increasing population ultimately; falls on land and there is overcrowding on the farms. Rigid social structure and joint family system encourage this overcrowding. No one appears to be unemployed. But in reality, large part of the labour force is underemployed.
2. Urban Unemployment:
According to 2001 Census, 27.8 per cent population lives in urban areas. Therefore, the magnitude of urban unemployment is not as high as that of rural unemployment. Two kinds of unemployment exist in the urban areas:
(a) Industrial Unemployment:
The Britishers had totally destroyed the village based industries. The condition of artisans and farmers was not good. They migrated to the urban areas in search of jobs. But they could only increase the number of unemployed persons.
In recent years many industries have been modernized. New and automation techniques of production have rendered many workers unemployed. It is called ‘technological unemployment.
Industrial activities are increasing by leaps and bounds. Fluctuations in the business activities affect the level of employment. Industrial recession of 1966-68 rendered many workers unemployed. Recent power shortage in many states has slackened the industrial activity and increased the number of unemployed persons. It is called ‘cyclical unemployment’.
(b) Educated Unemployment:
Indian universities and colleges have been producing lakhs of graduates every year. Education in India is not ‘job oriented’. Students have been aimlessly studying different courses.
When they come out of college after completing their education, they fail to get suitable jobs. Educated unemployment entails a waste of the country’s most valuable resource, the human capital.