Main causes or reasons for Unemployment  situation in India
Lallabi Admin   03.Jun.2017

Main causes or reasons for Unemployment situation in India

Unemployment is a complex (most typical) problem in India; there are multiple reasons for this. We can’t say this (reason) is the only reason for unemployment. Now unemployment situation in India is going very bad. According to International Labour organization (ILO) the unemployment is expected to rise by 1lakh in 2017 and it will be double in 2018. They quoted that the number of jobless people will increase from 17.7 Million to 18 Million if the country’s unemployment rate is 3.4 to 3.5%, if the rate will increases then the number of jobless people will increase.

Recently in the parliament Question Hour, Minister of state for planning Rao Inderjit Singh stated that overall unemployment was rising and the unemployment rate is 5% that means the number of jobless people is increasing unexpectedly. Job creation in India is not expecting to pick up in 2017 and 2018 as a result unemployment rises slightly. According to ILO we are facing two major challenges, 1st Global economic crisis and 2nd is social crisis.

We can divide unemployment into three types based on their behavior. They are Frictional unemployment (Employees will leave job to find a better job), Structural unemployment (Employee skills, abilities and income requirements does not match with available jobs) and cyclical unemployment (fewer jobs than applicants we will call it as demand-deficient unemployment).

There are several reasons (we can’t say a particular reason) which influencing unemployment in India. So we will discuss the following five reasons which playing major role in India’s unemployment.

  1.  Education Policy
  2.  Mindset of people.
  3. Technology.
  4. Governmental reforms
  5.  Global changes

Educational Policy:

If a country’s educational policy is good then the employment of graduates will be good, if employment if good then the country’s economical position will be good. If economical position will be good then country will be good. All these are interrelated. Educational policy in providing the knowledge is one of the greatest set back. Students with lack the professional skills both (technical and non-technical) will cause unemployment. Lack of technical skill means there is no proper updates in technology and the education is not relating to job, & Non-technical skills such as soft skills which is most important while getting a job in placements but unfortunately that is not included in educational policy only few colleges are concentrating on this.

Practical knowledge is lower in higher education compared to lower education. When the education is growing up we should have to concentrate on practical but unfortunately in our education system it is reverse. If a student not having good practical knowledge how he can get a job? Let us assume, you know the procedure of how to ride a bike but you don’t have practical knowledge.., is it possible to ride without mistakes? Same thing will happen in education. The subjects and practical should be job related and it should be dynamic according to the changes in the society and industry.


Everyone is wishing for heavily paid jobs and refusing to do small jobs. If everyone looking for high paid jobs then who will work for the low paying jobs.  All people wants to do engineering/medicine/MBA/CA, none of them (or very few) wants to study science, maths, literature and other arts. Every year lakhs of Engineers are coming out and 10 to 20% only getting jobs. In some other fields like textiles jobs available but people are not ready to work. So we should change our mindset and need to concentrate on the fields which are having demand.


With the technology improvements the job vacancies are reduced. Technology reduces the human effort that means with technology we are doing same work within less time with less cost. Naturally it leads to unemployment. Now in each industry we started using automation (robotics) due to this unemployment is happening it may be doubled in coming days.

Governmental Reforms:

Government needs to regulate the number of various graduates according to industry requirement. It should regulate the number of vacancies and graduates in each course which should be done in co-ordination with the industries. Government should take Agricultural Reforms because this is the greatest contributor of unemployment. With our reforms we should make it as a profitable sector then many unemployed people will move back to the agriculture. MSME Reforms: the ease of doing business must be improved mainly in MSME sector so that larger investment occurs in this and employment rate goes up. Government should implement powerful reforms to reduce the corporate dependency in the society. Government should recruit all the vacancies in government sector regularly and should think caste system which is also a factor in unemployment.

Global Changes:

If anything happens globally it will affect unemployment in India. If the country’s economic situation is strong then employment rate will be good. Country’s economical position depends on country’s policy as well as global changes. The decision of USA president (Donald Trump) on H1B visa effecting Indian IT industry, many people are going to lose their jobs. And also his decision on outsourcing (already there is a problem with automation) is going to effect on 60% IT industry in India. These two happened globally even though we are facing unemployment problem.

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