Effects of Unemployment in India

1. Economic Effects:

• Non-utilisation of Manpower: The country’s human resources are underutilised to the degree that people are unemployed. It is a social waste.
• Loss of Productivity: To the extent that human resources are underutilised, there is a loss of productivity. Even though they could, unemployed people do not contribute to the output.
• Low Capital Formation: Unemployed persons only increase spending because they are consumers. They don’t work or save money for investments. As a result, the rate of capital formation is still low.
• Low Productivity: There is a low level of productivity as a result of hidden unemployment. Low productivity translates to low growth rates.

In short, because of low productivity, the economic effects of unemployment not only point to a low level of present output but also a low level of future output.

2. Social Effects:

• Low Quality of Life: Being unemployed affects one’s quality of life and suggests a state of constant pain.
• Greater Inequality: Greater inequality in the distribution of income and wealth is correlated with higher unemployment rates. Growth does not occur with social justice under such circumstances.
• Social Unrest: Although there are likely many additional motivations for terrorism, the role played by self-desperation is by no means less important.
• Social Conflict: Unemployment creates a rift between the wealthy and the poor in society. As a result, class conflict worsens the issue of social unrest.

In a nutshell, unemployment is a social evil because it undermines social justice and promotes social unrest by widening the gap between the rich and the poor.

Unemployment is one of the most important problems that can be found in any country in the world, regardless of its economic condition. Unemployment is defined as a condition wherein people are able and willing to work at the current wage rate but cannot find work. Some skilled workers struggle to find employment for extended periods, thus, unemployment is not just confined to low-skilled employees. There are various methods for identifying an unemployed person. Some economists believe that a person is considered unemployed if they cannot find a job for even one hour during a half-day.

Key Takeaways:

• Unemployment in India is not just about job scarcity but also about the mismatch between skills demanded and skills possessed by the workforce.
• A significant portion of India’s workforce is employed in the informal sector, where job security and benefits are often lacking.
• Global economic trends and events can also impact unemployment in India, such as fluctuations in global markets, trade policies, and geopolitical tensions.
• The Indian government has launched various schemes and programs aimed at tackling unemployment, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Skill India Mission, and Startup India.