Employment-Growth and Other Issues: NBSE Class 12 Economics

Employment-Growth and Other Issues
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Here, you will find summaries, questions, answers, textbook solutions, pdf, extras etc. of (Nagaland Board) NBSE Class 12 (Arts/Commerce) Economics Chapter 7: Employment-Growth and Other Issues. These solutions, however, should be only treated as references and can be modified/changed.


The chapter discusses the concept of employment, its relation to economic growth, categories of workers, and the status of employment in India. It explains that employment enables people to earn a livelihood and is essential for economic development. India has issues like disguised unemployment, under-employment, casualization and informalization of workforce.

Only 40% of population participates in workforce showing high dependency. Workforce participation is higher in rural areas and more men work than women. Nearly 50% workers are self-employed, 33% are casual wage workers and only 15% have regular salaries. The unorganized sector accounts for 92% of employment without job security.

The share of agriculture in employment has declined from 70% in 1950s to around 50% now. But it still employs the maximum number of people. The share of manufacturing has stagnated at 12% while services are rising. Trends show casualization of workforce and informalization of jobs.

Different types of unemployment like disguised, seasonal and educated co-exist in India. The educated unemployment is quite high. For the growing workforce, more jobs have to be created through rapid economic growth. Sectors like construction, retail, tourism, IT etc. are expected to account for majority of new jobs. But fundamental structural changes are needed in development model to promote labor-intensive manufacturing and address inadequacies in job creation.

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Textual questions and answers

A. Very short-answer questions (answer in one word/one sentence)

1. How is employment related to economic development?

Answer: Employment is related to economic development because the more people are employed in an economy, the larger the national product will be. 

2. Is there full employment in all economies?

Answer: No, there is not full employment in all economies.

3. What is dependency ratio?

Answer: Dependency ratio is the number of people who are dependent on a worker. It is calculated by finding the ratio of workers to the total population.

4. Compared to urban women, why are more rural women working?

Answer: This could also be due to the non-inclusion of women’s work in urban areas as homemakers in the national output. Additionally, the difference in workforce proportion in rural and urban areas arises due to the difference in participation of women.

5. Why are there more men than women in regular salaried employment sector?

Answer:,One possible explanation for the disparity could be due to societal norms and gender roles that have historically favoured men in certain industries and positions. This could lead to fewer opportunities for women to enter and advance in the regular salaried employment sector.

6. Is India experiencing ‘jobless growth’? Why?

Answer: India could be experiencing ‘jobless growth’ due to factors like sectoral imbalance, automation, a large informal sector, skill mismatch, policy gaps, and global economic conditions. While the GDP may grow, these factors can prevent a corresponding increase in employment opportunities.

7. Bring out the differences in disguised and seasonal unemployment.

Answer: Disguised unemployment refers to a situation where more people work on a piece of land than required, and some of them have zero production. It is difficult to identify those who have zero production as all seem to be working. 

On the other hand, seasonal unemployment occurs when workers get a job during the busy season, while in the lean season, they are without any work in the same place. This is more prominent in the agriculture sector in India.

8. Is there unemployment amongst the educated urban youth? Why?

Answer: Approximately three-fourths of the unemployed are in rural areas, and three-fifths among them are educated. It is possible that there is unemployment among educated urban youth due to various factors such as a lack of job opportunities, skill mismatch, and competition for jobs.

B. Short-answer questions-I (answer in 30-50 words)

1. Give two reasons for people to work.

Answer: Two common reasons are to earn a livelihood and to be gainfully occupied.

2. What is meant by ’employment’?

Answer: Employment refers to the engagement of an individual in an economic activity that results in the creation of national product.

3. How does an economy reach full employment?

Answer: An economy can reach full employment when the planners of the economy are able to project the requirements of the expanding sectors. Institutions are created and encouraged to promote the requisite skills and to train labour for these fast-growing sectors. Job requirements and skills must match.

4. Define ‘labour’.

Answer: Labour refers to the physical and mental effort that people put into work to produce goods and services. It is an essential factor of production and contributes to the creation of national output.

5. What are the two categories of workers?

Answer: Workers are broadly classified into two categories: those who work for others such as in factories, offices, and farms, and those who work for themselves as owners or hirers of the assets they work with, known as the self-employed.

6. Who is a self-employed worker?

Answer: A self-employed worker is someone who works for themselves as owners or hirers of the assets they work with. They are the land-owning farmers, factory owners, and entrepreneurs.

7. How is employment measured?

Answer: Employment is measured using three criteria: usual status, weekly status, and daily status. These criteria enable us to ascertain whether a worker can be termed as employed or not.

  • Usual Status: Measures employment over a longer period.
  • Weekly Status: Measures employment within a week.
  • Daily Status: Measures employment on a day-to-day basis.

8. Why do more women work in rural areas in comparison to their urban counterparts?

Answer: A lesser number of women work in urban areas than those in the rural areas (14% and 30% respectively). This is due to the need for rural women to work and add to the family income. This could also be due to the non-inclusion of women’s work in urban areas as homemakers in the national output. This could also be due to the non-inclusion of women’s work in urban areas as homemakers in the national output.

9. Who is a ‘casual-wage labourer’?

Answer: A casual-wage labourer is a worker who works on a daily wage basis or those working on and off not on a regular basis. Examples of casual-wage labourers include labour working off and on in fabrication units, cutters and people working on the machines at the tailor shop, and surplus farm labour working on a daily wage basis.

10. What can you predict about the importance of the organised sector in creating more employment opportunities in India?

Answer: Despite the persistent association of employment with the organised sector, the largest share of new jobs in India is predicted to come from the unorganised sector. The unorganised sector currently contributes 92% of the country’s employment and generates seven times greater labour intensity per unit of production compared to the organised sector.

Additionally, the organised sector has not been able to generate as many jobs since it has been curtailing employment for quite some time. Therefore, it can be predicted that the importance of the organised sector in creating more employment opportunities in India may not be as significant as that of the unorganised sector.

11. ‘Employment is growing at an annual rate of -0.75%’. Derive a meaningful conclusion from this statement.

Answer: Regarding the statement “Employment is growing at an annual rate of -0.75%,” it means that the number of jobs in the country is decreasing by 0.75% every year. This indicates a decline in employment opportunities, which could lead to rising unemployment rates and a decrease in economic growth. It is essential to address this issue by creating more job opportunities and promoting economic growth to ensure a stable and prosperous future for the country.

12. Give full forms for SME and SIS.

Answer: SME – Small and Medium Enterprises
SIS – Small Scale Industries

13. Identify any four sectors that have a high potential for employment creation in the near future.

Answer: The following sectors have a high potential for employment creation in the near future:

  • Commercial agriculture
  • Agro-industry and Agri-business
  • Retail and wholesale trade
  • Tourism, housing, and construction.

14. Define ‘unemployment’.

Answer: ‘Unemployment’ is defined as a situation when individuals who are willing and capable of working do not get an opportunity to work.

15. Define ‘seasonal unemployment’.

Answer: ‘Seasonal unemployment’ is a situation where people do not have work because of a change in the season or when, during the lean season, people do not get work. For example, hired labour is needed only during sowing and harvesting time; the rest of the time, they do not have work.

16. Is an underemployed person working or not?

Answer: An underemployed person is working, but not at their full capacity. They may be working fewer hours than they would like or in a job that does not fully utilise their skills and abilities.

C. Short-answer questions-II (answer in 60-80 words)

1. How does employment of labour change as an economy develops?

Answer: As an economy develops, there is a shift of labour from agriculture to industries and services. This means that people move from rural to urban areas in search of better prospects. In urban areas, many enterprises run as factories, shops, and establishments, and they employ others as salaried people. In rural areas, there is a greater proportion of self-employed and casual wage earners as there is greater dependence on self-owned land cultivation and farm-labour is employed for cultivation, mostly during the sowing and harvesting time.

2. Briefly describe the two categories of workers.

Answer: Workers can be classified into the following two broad categories:

  • Workers Working for Others: These are people who work in factories, offices, and farms. They do not own the capital or the assets they work with but receive wages and salaries in return for the work done.
  • Self-Employed Workers: These are individuals who work for themselves as owners or hirers of the assets they work with. Examples include land-owning farmers, factory owners, and entrepreneurs.

3. Analyse the differences in rural and urban workforce of India.

Answer: The differences in rural and urban workforce in India are:

Nature of Employment:

Rural Areas: There is a greater proportion of self-employed and casual wage earners due to dependence on self-owned land cultivation and farm labour employed mostly during sowing and harvesting time.

Urban Areas: Many are employed in the regular salaried category because urban areas have many enterprises like factories, shops, and establishments that employ others as salaried people.

Gender Disparity:

Rural Areas: More women work in rural areas (30%) compared to urban areas (14%). This is due to the need for rural women to work and add to the family income.

Urban Areas: Lesser number of women work, possibly due to the non-inclusion of women’s work as homemakers in the national output. 

Sectoral Shift:

Rural Areas: Employment is more prominent in the casual wage employment category.

Urban Areas: More people are employed in the regular salaried category.

Workforce Participation:

Rural Areas: 42% of the population participates in work.

Urban Areas: Only 34% of the population participates in work.

Dependency Ratio:

Rural Areas: The rural population participates more in work because they need more opportunities to earn and many may not be going to schools, colleges, and training institutions.

Urban Areas: Population takes longer to enter the workforce.

4. What helps us understand the extent to which a worker is attached to his work?

Answer: The nature of employment differs in India, with some workers employed throughout the year, while others are employed for some time of the year only, and some workers who do not get paid. This suggests that the extent to which a worker is attached to his work may depend on various factors, such as the type of work, the duration of employment, and the compensation received.

5. State how ‘casualisation of labour’ is happening in the Indian economy.

Answer: The casualisation of the labour in the Indian economy is evident from the changing employment status over the years. The share of self-employed workers has fallen from 61% to 53% from 1972-73 to 1999-2000. In contrast, the share of casual wage labourers has increased from 23% to 33% in the same period. Regular salaried employees’ share has remained almost stagnant at 15%. This trend reveals that the share of casual wage work is rising. In rural areas, farmers are selling their land and seeking work as casual labour in nearby road construction projects. This also occurs when factories and mills shut down, and workers lose their jobs. Overall, labour is moving from self-employment and regular salaried employment to casual wage work.

6. Why should labour work in the organised sector?

Answer: Labour should work in the organised sector because it offers adequate remuneration as per the contract, security of work, and a good working environment with facilities such as sanitised restrooms and safe drinking water. The sector also provides social security allowances like gratuity and pension, as well as retirement benefits. All these factors contribute to an increase in efficiency and a better standard of living. These practices are prevalent only in the organised or formal sector in India.

7. Suggest any six areas for expansion of employment in India in the near future.

Answer: The following are the six areas for expansion of employment in India in the near future:

  • Commercial agriculture, agro-industry, and agri-business: Advanced crop technology can reduce production costs and expand the market for important commercial crops.
  • Afforestation for pulp, fuel, and power: This sector can generate additional on-farm jobs and lucrative alternative markets for farm produce.
  • Retail and wholesale trade: This sector is already expanding and has the potential for more growth.
  • Tourism, housing, and construction: Development of India’s tourism infrastructure could generate an additional 25 million employment opportunities.
  • IT and IT-enabled services: Outsourcing of services by OECD countries will fuel a rapid expansion in this sector, generating millions of jobs.
  • Transport and communications: This sector also has high employment potential.

8. What is ‘disguised unemployment’? Explain with the help of a suitable example.

Answer: Disguised unemployment is when more than the required number of people work on a piece of land such that the production of some of them is zero. It is very difficult to identify those who are having zero production as all seem to be working. 

For example, about one-third of agriculture workers in India were disguisedly unemployed in the late 1950s. Removing the extra persons does not affect the total output as the production of these extra workers is zero.

9. Give two reasons for unemployment amongst the educated.

Answer: Two main reasons for unemployment amongst the educated population in India are:

Lack of Suitable Job Opportunities: Despite having a higher level of education, there is often a mismatch between the skills possessed by the educated individuals and the job requirements in the market. This leads to a situation where there are limited job opportunities available for the educated workforce, resulting in unemployment.

Competition and Overcrowding in the Job Market: The number of educated individuals seeking employment is significantly higher than the number of available job openings. This creates intense competition and overcrowding in the job market, making it difficult for individuals to secure employment even with their qualifications.

10. Give any three causes of unemployment in India.

Answer: Three causes of unemployment in India, as outlined in the textbook, are:

  • Inadequate Job Creation: Economic growth has not led to sufficient job opportunities.
  • Disguised Unemployment: Common in agriculture, where more people work on land than needed, contributing little to production.
  • Underemployment: Workers are employed below their skill level or capacity, such as highly qualified individuals in low-skill jobs, or farm workers employed only sporadically​​.
D. Long-answer questions-I (answer in 90-120 words)

1. Do more workers in an economy imply a greater national output? Explain.

Answer: More workers in an economy does not necessarily imply a greater national output. It depends on how productively the workers are employed. If there is disguised unemployment, where workers are not fully utilized, then just increasing the number of workers will not increase output. The quality of employment and proper utilization of labor is more important. However, in general, if the existing workers are fully and efficiently employed, and more productive workers join the workforce, it will lead to greater production and national output. The key is proper and efficient utilization of labor rather than just numbers.

2. Derive four conclusions regarding the working population in India.

Answer: Four conclusions regarding the working population in India: First, around 40% of the total population works i.e. the dependency ratio is high at 1:2.5, which means the working population has to support a large non-working population. Second, rural workforce participation at 42% is higher than urban workforce at 34%, because agriculture is the predominant sector requiring more labor. Third, women’s workforce participation at 26% is significantly lower than men at 53%, especially in urban areas, due to socio-cultural factors. Fourth, rural women’s workforce participation at 30% is higher than urban women at 14%, as rural women have to work more for subsistence living.

3. How is the quality of employment changing for labour in India? Analyze these changes.

Answer: The quality of employment in India is undergoing casualization, which means there is a shift towards temporary, irregular and informal work rather than permanent formal employment. The proportion of self-employed workers is declining and the share of casual wage labor is increasing over the years. Also, the organized or formal sector is growing at a much slower pace than the unorganized or informal sector, leading to informalization of the workforce. This means workers are moving from formal jobs with regular salaries and benefits to informal work arrangements lacking job or income security and social security benefits. Overall, there is a shift towards low-paid temporary contractual work without employment benefits and protection. This adversely impacts the quality of employment as workers lose stable income streams and job certainty.

4. What is the role of the public sector in provision of employment to the labour force? In what way is this role undergoing transformation?

Answer: The public sector has been the major provider of employment in the organized formal sector in the country. Jobs in government, PSUs and other public sector entities have formed a large share of formal employment. However, with the policy of privatization and downsizing of PSUs being pursued since 1991, the share of the public sector in organized employment has been steadily declining. This had led to informalization of the workforce as the expanding private sector has a much larger share of unorganized and informal employment lacking job security, benefits and social security. With state rolling back, employment growth in the organized private sector has not been adequate to absorb those losing public sector jobs, forcing many into the unprotected informal sector. This shows how declining public sector employment has been associated with the informalization of the workforce in the era of liberalization.

5. How can the employment situation improve with a faster growth of GDP?

Answer: The rate of GDP growth has a major influence on employment generation. With rapid economic growth, if focus is placed on relatively labor-intensive sectors like manufacturing, construction, services etc., it can create more employment opportunities as the expanding sectors will require more labor inputs to meet growing demand. However, specific supportive policies and measures need to be formulated and implemented to ensure growth is employment-intensive. These may include incentives for SMEs to flourish, training programs to improve worker skills, building industrial corridors and logistics infrastructure, simplifying business regulations, availability of credit for entrepreneurs, and emphasis on ‘Make in India’ to boost manufacturing sector. While growth is necessary for job creation, the pattern of growth also matters for generating productive and sustainable employment.

6. Discuss any two types of unemployment specific to India.

Answer: Two types of unemployment prevalent in India owing to its socio-economic structure are disguised unemployment and seasonal or cyclical unemployment. Disguised unemployment affects the agriculture sector where the number of people working exceeds the number actually needed, so the marginal product of agricultural labor is zero or negligible, and they do not contribute to increased output. It is difficult to identify the surplus workers whose removal will not affect output. Seasonal unemployment affects agriculture labor which gets work only during peak seasons like sowing, harvesting and threshing. In the lean months, the same workers have little or no employment and remain semi-unemployed or under-employed undertaking odd jobs. Both these types of unemployment arise from the agrarian structure and seasonal nature of agricultural activities in the country.

7. Will the unemployment situation improve by 2020? How?

Answer: The unemployment situation in the country is expected to improve to some extent by 2020 based on certain enabling factors – the changing demographic structure resulting in slower labor force growth, increasing education and skill levels, faster economic growth driven by more employment-intensive sectors. However, to significantly reduce unemployment, especially among the educated youth, a lot more focused and calibrated policy interventions and programs will be needed to create adequate decent employment opportunities and absorption into the workforce. Merely relying on economic growth to eventually trickle down is unlikely to resolve the unemployment problem in the near future. Proactive measures like increasing public investment, incentives to SMEs, reforms in labour laws, expansion of vocational training avenues, and major thrust on manufacturing under ‘Make in India’ are required.

8. Has the government successfully implemented its employment generation programmes? Give suitable evidence/s for your answer.

Answer: The track record of the government’s many employment generation programs and schemes has been mixed so far, with issues like leakages, corruption, politicization, and lack of proper monitoring and implementation affecting their performance and reaching the intended beneficiaries. For instance, in the flagship MNREGA scheme, media reports and audits have found substantial misuse of funds through collusion of village officials and local political leaders, reducing the actual employment benefits reaching the rural poor. While the policies look good on paper, the delivery systems have not been robust enough for transparent and efficient outcomes. The lack of accountability down the line is a systemic issue affecting most government programs.

9. Suggest the way out of the unemployment situation in India.

Answer: To tackle the persistent unemployment problem in the country, India needs a multi-pronged integrated policy approach. This would include – faster GDP growth with emphasis on relatively labour-intensive sectors like manufacturing, construction, services etc; reforms and incentives for SMEs and unorganised sector which are major job providers; increased public investment in core infrastructure sectors; large scale implementation of industry-relevant vocational training programs; proper monitoring and governance mechanisms for effective delivery of employment schemes; and a major thrust on initiatives like ‘Make in India’ to boost the manufacturing sector which has high employment potential. An employment-centric growth strategy along with supportive policies on education, skilling, ease of doing business etc. can help maximise employment creation and minimise unemployment levels.

E. Long-answer questions-II (answer in 130-200 words)

1. The nature of employment differs a lot in India. Analyse this statement in the light of available facts.

Answer: The nature of employment in India differs in the following ways: The type of workers – self-employed, casual wage workers, regular salaried employees. The majority are self-employed. The location – rural vs urban areas. More self-employed and casual wage workers in rural areas. More regular salaried jobs in urban areas. Gender – More men employed compared to women. Rural women’s work participation higher than urban women. Seasonality – Employment in agriculture is seasonal, not year-round. Rural workers may be underemployed. Organized vs unorganized sectors – Only about 8% workers are in the organized sector with job security and benefits. Over 90% are in the unorganized sector without benefits. Quality of work – Casualization and informalization leading to deterioration in quality of employment. Lack of job security, benefits, fair wages. Unemployment – Different types like disguised, seasonal, educated unemployment co-exist indicating the complex nature of employment scenario.

2. Discuss the status of employment in India.

Answer: The status of employment in India can be discussed in terms of: Workforce participation – Only around 40% of population participates in workforce, indicating high dependency. Rural-urban divide – Higher workforce participation in rural areas (42%) compared to urban areas (34%). Gender gap – Women’s workforce participation (26%) far lower than men (53%). More rural women work than urban women. Predominance of self-employment and casual wage work – Nearly 50% are self-employed. Casual wage work is second major category. Only about 15% are in regular salaried jobs. Informalization – 92% of workforce is in the unorganized sector without security and benefits. Share of organized sector is declining. Sectoral changes – Share of agriculture declining, industry stagnant, services rising. But majority still dependent on agriculture. Unemployment – Different types of unemployment like disguised, educated, seasonal, structural co-exist. Youth and educated unemployment high.

3. Describe the changes that have emerged in the employment of labour in various sectors by output since 1951 in India.

Answer: The changes in employment by sectors since 1951 are: The share of agriculture has declined from 70% in 1950s to around 50% now, indicating shift of workforce to non-farm sectors. The share of manufacturing increased from 10% to 12% during 1950s-1990s, but remains stagnant at around 12% in recent decades showing slow growth of industrial jobs. The share of services has increased steadily from 15% in 1950s to 28% now, driven by growth in sub-sectors like construction, transportation, communication, banking, IT etc. Within agriculture, percentage of cultivators has declined while agricultural labour has increased, showing casualization of agri workforce. Urban workforce participation has increased from 20% to 34% showing rural-urban migration for jobs. Self-employment remains high but its share has declined. Casual wage work is rising. Organized sector’s share in employment has fallen from around 10% in early 1990s to less than 8% in 2010s showing informalization of jobs.

4. Explain how the public sector has been leading to ‘informalisation of employment’ since 2000.

Answer: The public sector’s share in total organized sector employment has declined from about 70% in 1990s to around 60% in 2010s. This decline is due to privatization of public sector enterprises, downsizing of government departments, ban on fresh hiring in government etc. The private corporate sector has not generated commensurate formal sector jobs to absorb the loss of public sector jobs. The private corporate sector has also been retrenching permanent employees and hiring more contract/casual workers to reduce costs. So the decline in public sector jobs has directly added to informalization as workers lose secure salaried jobs and are forced to take up informal work. The inability of private corporate sector to generate enough organized sector jobs compels more workers to join the unorganized sector. Thus, the overall share of unorganized sector in total employment has increased from around 90% to over 92% since 2000.

5. How can the small and medium enterprises create the much needed jobs for the fast expanding labour force in India?

Answer: SMEs are more employment intensive and can create jobs at relatively low capital costs. Steps like easier access to credit, tax incentives, marketing support, skill training, clusters, technology access can promote entrepreneurship and growth of SMEs and micro enterprises. Promoting SMEs in labor intensive manufacturing like textiles, leather, food processing can create millions of jobs. Service sector SMEs can also create jobs in IT, retail, tourism, transport etc. Encouraging agro-based and rural enterprises can provide localized employment and check migration to cities. Promoting SME entrepreneurship among women, SC/ST can make growth inclusive. Apart from direct jobs, SME growth stimulates demand in ancillary industries creating indirect employment too. Facilitating SME integration with larger firms through outsourcing and vendor development models can leverage their job creation. A 1 crore increase in registered SMEs can potentially create over 50 million additional jobs.

6. You are given an opportunity to plan for employment expansion, Specific policy decisions for which sector will you focus on? Give reasons.

Answer: If given an opportunity to plan for employment expansion, I would focus on the following sectors: Agriculture and agro-based industries – Being the largest employer currently, agriculture needs modernization and value addition which can create millions of jobs in agro-processing etc. Construction and infrastructure – As this is the fastest growing sector, expanding housing, roads, railways, ports etc. can generate employment on a large scale. Textiles and garments – Has high labor intensity and export potential which can be leveraged to create millions of jobs, especially for women. Tourism and hospitality – Has high employment multiplier effect. Promoting tourism infrastructure can boost employment. Healthcare and education – Require huge recruitment of doctors, nurses, teachers to meet India’s needs and are less capital-intensive. SME sector – Job creation potential of SMEs is very high and they can drive inclusive entrepreneurship. Service exports – Tapping India’s IT skills and promoting BPOs, KPOs can create millions of jobs in IT-enabled services. The focus has to be on labor-intensive sectors which can maximize job creation for the growing workforce. Both manufacturing and services sectors need to be developed to diversify job opportunities.

7. Why is it difficult to overcome unemployment in India?

Answer: Overcoming unemployment is difficult in India due to various structural issues: Huge population and fast growing workforce due to demographic dividend makes job creation challenging. Predominance of agriculture which has disguised unemployment. Farm mechanization displaces labor. Lack of adequate job creation in manufacturing and industry. Capital intensive techniques, automation lead to fewer jobs. Lopsided growth between agriculture and industry. Rural areas lack jobs leading to migration. Skill-jobs mismatch. Lack of vocational training makes people unemployable for available jobs. Slow formal job creation in organized sector due to rigid labor laws, high costs. Most employment in informal sector. Underdevelopment, lack of infrastructure and industrialization in backward regions causes regional imbalances. Seasonal nature of agricultural work causes temporary unemployment. Educated unemployment due to academic nature of education not aligned to job needs. Lack of comprehensive data on nature and extent of unemployment. Governance issues like leakage of funds under employment schemes. Thus, a comprehensive policy focus on structural reforms is needed rather than short-term measures.

8. Is unemployment falling in India? What may be expected in the coming years?

Answer: Unemployment rate has been nearly stagnant at around 5% for the last two decades as per official estimates based on Usual Status. However, this does not capture under employment and disguised unemployment. Open unemployment among youth and educated is very high ranging between 10-35% based on CDS and CWS estimates. In coming years, the following trends can be expected: Workforce growth will continue to be higher than population growth due to demographic dividend. Around 12-15 million new entrants per year expected. Employment growth in agriculture is expected to be slow due to reduced labor intensity. Share of agriculture in employment will fall below 40%. Manufacturing jobs may increase slightly due to government push to ‘Make in India’. But technological changes may limit net job creation. Service sector including construction, transportation, healthcare, tourism etc. likely to account for majority of new jobs. Skill development and vocational training must to make workforce employable for such service jobs. Persisting educated unemployment but increased opportunities for skilled workforce. Growth likely to be jobless if organized manufacturing does not pick up. Informal, casual jobs may continue to rise. Urban and educated unemployment to remain high unless enough formal jobs are created. Structural shifts needed. Thus, unemployment is not likely to come down significantly unless fundamental structural changes are made in development model to address inadequacies.

9. What are the various policies adopted by the Central Bank to contain inflation?

Answer: The RBI uses monetary policy measures like increasing policy interest rates (repo rate, reverse repo rate) to reduce money supply and aggregate demand, increasing CRR and SLR rates to reduce liquidity in the banking system, open market operations by selling government securities to suck out liquidity, increasing Marginal Standing Facility (MSF) rate to set floor to overnight rates, and hiking Bank Rate to make borrowing costlier for banks.

For liquidity management, RBI undertakes repo and reverse repo operations to manage short-term liquidity and uses the Liquidity Adjustment Facility (LAF) to adjust enduring liquidity.

RBI also uses communication tools like policy statements and guidance to anchor inflation expectations and coordinates with fiscal authority to align policy outlook.

Some prudential measures used are increasing provisioning norms for banks, restricting loan to value ratios and sector-specific caps on credit if required.

On the reserve requirements side, RBI can increase Cash Reserve Ratio (CRR) to reduce loanable resources and hike Statutory Liquidity Ratio (SLR) for liability management.

10. The following table shows distribution of workforce in India for the year 1972-73. Analyse it and give reasons for the nature of workforce distribution. You will notice that the data is pertained to the situation in India 30 years ago! 

Place of ResidenceWorkforce (in millions)

Answer: The data shows India’s workforce distribution in 1972-73 between rural and urban areas and gender-wise. 195 million (83%) of the 234 million workforce was in rural areas indicating India’s agrarian economy and low industrialization. Only 39 million (17%) was in urban areas showing limited economic opportunities there compared to villages. Male and female distribution shows stark gender disparity – 157 million males vs only 76 million females. In rural areas, 125 million males compared to 69 million females, indicating lower female participation in agriculture. In urban areas, 32 million male workers vs 7 million females due to fewer economic activities for women. Thus, in the 1970s, India’s workforce was overwhelmingly rural, signifying dependence on agriculture. Very low female participation due to socio-economic limitations.

11. Analyse the recent trends in sectoral distribution of workforce in India.

Answer: Recent trends in sectoral distribution of India’s workforce are: Share of agriculture has declined from 58% in 2004-05 to around 45% in 2019-20 but still accounts for largest share. Share of manufacturing has stagnated between 12-13% over last 15 years, reflecting slow growth of industrial jobs. Share of services has increased steadily from 28% to 34% driven by sub-sectors like construction, retail trade, transport, IT etc. Within agriculture, percentage of cultivators has declined while share of agricultural labour has gone up, indicating casualization. Rural non-farm employment and urban share have risen due to rural-urban migration. Self-employment remains dominant but share has fallen. Wage work and casual labour rising. Youth unemployment remains high but opportunities in skilled service jobs have opened up. Organized sector share has declined from over 8% to around 7%. Informal jobs dominate. Overall job creation remains slow relative to growth in working population due to lack of structural reforms.

12. You are residing in a village. If you are asked to advise the village panchayat, what kinds of activities would you suggest for the improvement of your village which would also generate employment?

Answer: I would suggest the following activities to the village panchayat to generate employment: Promote diversification into horticulture, floriculture, beekeeping to increase job opportunities in agriculture. Develop farmer producer organizations (FPOs) and agriculture co-operatives for better marketing of produce. Facilitate food processing units and mini cold storages to reduce wastage and earn more. Invest in irrigation facilities like check dams, farm ponds, micro irrigation to increase cropping intensity. Promote non-farm activities like handicrafts, handlooms, rural tourism which can provide supplementary income. Skill development programs in sectors like healthcare, teaching, IT, retail where youth can find jobs. Digital literacy programs to enable e-commerce, digital payments and rural BPOs. Cluster development for traditional village industries to improve productivity, quality, and marketing. Infrastructure development like road connectivity, electricity, broadband internet to attract private investment. Access to formal credit through microfinance and self-help groups. These initiatives can help diversify livelihoods, raise incomes, and generate local employment to address rural unemployment and underemployment.

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