Why is policy in India placing such a high priority on skill development? What actions has the government done recently to address this issue?
Unemployment is defined as a situation in which a mentally and physically capable person of working age is willing to work at the existing wage rate, but does not get a job to work. Unemployment is expressed by the following formula: Unemployment rate = (Unemployed workers/Total Labour Force) X 100Read more
Unemployment is defined as a situation in which a mentally and physically capable person of working age is willing to work at the existing wage rate, but does not get a job to work. Unemployment is expressed by the following formula:
Unemployment rate = (Unemployed workers/Total Labour Force) X 100
In India, the unemployment rate is measured by the National Sample Survey Organisation on three approaches- daily status approach, weekly status approach and usual status approach.
Types of unemployment existing in a developing country like India
- Open unemployment: It is a situation where a large section of the labour force does not get a job that may provide them with regular income. When the labour force expands at a faster rate than the growth rate of the economy, open unemployment occurs.
- Disguised Unemployment: It is a situation in which more people are doing a work than actually required. Even if some are withdrawn, production does not suffer. It happens due to rapid growth of population and lack of alternative job opportunities e.g. overcrowding in agriculture.
- Seasonal Unemployment: Such unemployment occurs during certain seasons in industries and occupations such as agriculture, tourism, ice factories, etc. People remain unemployed in off- seasons.
- Cyclical unemployment: It results directly from cycles of economic upturn and downturn. Unemployment typically rises during recessions and declines during economic expansions.
- Voluntary Unemployment: When people choose not to work. It happens when people are not able to find employment that matches their expectations.
- Structural Unemployment: It occurs when the skills, experience, and education of workers do not match the demand of the industry due to technological changes etc.
- Frictional Unemployment: It refers to the period between job transitions. People are regarded as unemployed while they are attempting to find a new job.
- Casual unemployment: When a person is employed on a day-to-day basis (unorganised sector), unemployment may take place due to short term-contracts, shortage of raw materials, fall in demand, change of ownership, etc.
Other than these major types of unemployment existing in India, underemployment is also rampant. Here people are either employed on a part-time basis or undertake a job where lesser qualification is required e.g. post graduates applying for posts of peon. The faulty education system also adds to the unemployment by creating a mismatch between skills imparted and those required by the industries. For e.g. a large number of engineering graduates in India remain unemployed due to this.
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Skill development is a key strategy to realise India's potential of demographic advantage of having one of the youngest workforce (an average age of 29 years in comparison to the advanced economies) for iniproving its competitiveness and growth. Also, by 2027, India is expected to have the world's lRead more
Skill development is a key strategy to realise India’s potential of demographic advantage of having one of the youngest workforce (an average age of 29 years in comparison to the advanced economies) for iniproving its competitiveness and growth. Also, by 2027, India is expected to have the world’s largest workforce. In this context, India needs to focus on skill development as:
In this context, the government has launched various schemes and programmes to push skill development in India. Skill India is the flagship campaign initiative launched by the Government in 2015 to train over 40 crore Indians in different industry-related jobs. Other measures include:
As per WTO, India’s GDP level can be increased further by 3%-5% till 2035, if it focuses on skill development and training. India’s demographic advantage is predicted to peak at around 2041, thus, India has a narrow timeframe to harness its demographic dividend and overcome its skill shortages.
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