The following are the main causes of unemployment:
(i) Caste System:
In India caste system is prevalent. The work is prohibited for specific castes in some areas.
In many cases, the work is not given to the deserving candidates but given to the person belonging to a particular community. So this gives rise to unemployment.
(ii) Slow Economic Growth:Indian economy is underdeveloped and role of economic growth is very slow. This slow growth fails to provide enough unemployment opportunities to the increasing population.
(iii) Increase in Population:
Constant increase in population has been a big problem in India. It is one of the main causes of unemployment. The rate of unemployment is 11.1% in 10th Plan.
(iv) Agriculture is a Seasonal Occupation:
Agriculture is underdeveloped in India. It provides seasonal employment. Large part of population is dependent on agriculture. But agriculture being seasonal provides work for a few months. So this gives rise to unemployment.
(v) Joint Family System:
In big families having big business, many such persons will be available who do not do any work and depend on the joint income of the family.Many of them seem to be working but they do not add anything to production. So they encourage disguised unemployment.
(vi) Fall of Cottage and Small industries:
The industrial development had adverse effect on cottage and small industries. The production of cottage industries began to fall and many artisans became unemployed.
(vii) Slow Growth of Industrialisation:
The rate of industrial growth is slow. Though emphasis is laid on industrialisation yet the avenues of employment created by industrialisation are very few.
(viii) Less Savings and Investment:There is inadequate capital in India. Above all, this capital has been judiciously invested. Investment depends on savings. Savings are inadequate. Due to shortage of savings and investment, opportunities of employment have not been created.
(ix) Causes of Under Employment:
Inadequate availability of means of production is the main cause of under employment. People do not get employment for the whole year due to shortage of electricity, coal and raw materials.
(x) Defective Planning:
Defective planning is the one of the cause of unemployment. There is wide gap between supply and demand for labour. No Plan had formulated any long term scheme for removal of unemployment.
(xi) Expansion of Universities:
The number of universities has increased manifold. There are 385 universities. As a result of this educated unemployment or white collar unemployment has increased.
(xii) Inadequate Irrigation Facilities:
Even after the completion of 9th five plans, 39% of total cultivable area could get irrigation facilities.
Due to lack of irrigation, large area of land can grow only one crop in a year. Farmers remain unemployed for most time of the year.
(xiii) Immobility of labour:
Mobility of labour in India is low. Due to attachment to the family, people do not go to far off areas for jobs. Factors like language, religion, and climate are also responsible for low mobility. Immobility of labour adds to unemployment.
All these factors add to unemployment.
Following are the suggestions to solve unemployment problem:
(i) Change in industrial technique:
Production technique should suit the needs and means of the country. It is essential that labour intensive technology should be encouraged in place of capital intensive technology.
(ii) Policy regarding seasonal unemployment:
Seasonal unemployment is found in agriculture sector and agro based industries.
To remove it:
(a) Agriculture should have multiple cropping,(b) Plantations, horticulture, dairying and animal husbandry should be encouraged,
(c) Cottage industries should be encouraged.
(iii) Change in education system:
Educational pattern should be completely changed. Students who have liking for higher studies should be admitted in colleges and universities. Emphasis should be given on vocational education. Qualified engineers should start their own small units.
(iv) Expansion of Employment exchanges:
More employment exchanges should be opened. Information regarding employment opportunities should be given to people.
(v) More assistance to self employed people:
Most people in India are self employed. They are engaged in agriculture, trade, cottage and small scale industries etc. These persons should be helped financially, providing raw materials and technical training.
(vi) Full and more productive employment:
The main objective of county’s employment policy should be to increase employment opportunities and productivity of labour. Govt. should adopt a policy that provides employment to all people.
(vii) Increase in Production:
To increase employment, it is essential to increase production in agriculture and industrial sectors. Development of small and cottage industries should be encouraged.
(viii) More importance to employment programmes:n five year plans more importance should be given to employment. The programmes like irrigation, roads, flood control, power, agriculture, rural electrification can provide better employment to people.
(ix) High rate of capital formation:
Rate of capital formation in the country should be accelerated. Capital formation should be particularly encouraged in such activities which generate greater employment opportunities. Capital output ratio should be kept low.
(x) Industries in co-operative sector:ndustries in co-operative sector should be encouraged. Kerala Govt.’ set up a textile mill covering 600 unemployed persons on co-operative basis. This is a novel approach to fight against unemployment. Different State Govt. should take necessary steps in this direction.
(xi) Decentralisation of industrial activity:
Decentralisation of Industrial activity is necessary to reduce unemployment. If industrial activities are centralised at one place, there will be less employment opportunities in the under developed areas. So Govt. should adopt such policies which encourage decentralisation of industrial activity.
(xii) Population control:The growth of population should be checked in order to solve unemployment, problem. Family planning programme should be implemented widely and effectively.