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Urban Unemployment in India
Context:
The unemployment rate in urban areas fell to 6.6% in Q1 (April-June) from 6.7% in the previous quarter, driven by a decrease in male unemployment, according to the latest Periodic Labour Force Survey (PLFS) data.
Issues Related to Urban Unemployment:
- Structural Unemployment: Urban job seekers often lack the skills needed for available jobs, especially as the economy shifts from agriculture to services.
- Informal Sector Dominance: A large portion of the urban workforce in India is employed in the informal sector, which is marked by low wages, job insecurity, and a lack of social security benefits.
- According to the IMF, the unorganized sector employs 83% of the workforce in India, with 92.4% of workers lacking formal contracts, paid leave, and other benefits.
- Frictional Unemployment: People take time to find suitable jobs, particularly when changing careers or during seasonal employment fluctuations.
- Cyclical Unemployment: Economic recessions lead businesses to reduce their workforce, increasing unemployment.
- Disguised Unemployment: Some individuals work multiple jobs or excessive hours to supplement their income.
- Underemployment: Many people work part-time or accept low-paying jobs due to a lack of better opportunities.
- Youth Unemployment: Young people struggle with unemployment due to limited experience and educational mismatches with the job market.
- Gender Discrimination: Women face challenges like the gender pay gap and limited opportunities in certain industries.
- Educational Inequality: Unequal access to quality education limits job prospects for individuals from disadvantaged backgrounds.
Employment and Constitution
- Article 19(1)(g): Guarantees the right to practice any profession or to carry on any occupation, trade, or business, subject to reasonable restrictions imposed by the state.
- Article 39(a): Directs the state to ensure that citizens have the right to an adequate means of livelihood.
- Article 41: Provides that the state shall, within the limits of its economic capacity, make provisions for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, and disablement.
- Article 42: Directs the state to make provisions for securing just and humane conditions of work and for maternity relief.
- Article 43: Promotes the living wage, conditions of work ensuring a decent standard of life, and full enjoyment of leisure and social and cultural opportunities for all workers.
Related Schemes:
- Atmanirbhar Bharat Rojgar Yojana (ABRY): Launched in October 2020, this scheme incentivizes employers to create new jobs and provides social security benefits. It aims to restore employment lost during the COVID-19 pandemic.
- Pradhan Mantri Rojgar Protsahan Yojana (PMRPY): Initiated in 2016, this scheme encourages employers to generate new employment by providing financial incentives. Beneficiaries registered up to March 2019 continue to receive benefits for three years.
- National Career Service (NCS) Project: This project transforms the National Employment Service to offer job matching, career counseling, vocational guidance, and information on skill development courses. It includes the NCS Portal, Model Career Centres, and interlinking of Employment Exchanges.
- National Urban Livelihoods Mission (NULM): Replacing the Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in 2013, NULM aims to reduce poverty and vulnerability of the urban poor by enabling them to access gainful self-employment and skilled wage employment opportunities.
- Yuva Swabhiman Yojana: This scheme, implemented in Madhya Pradesh, targets urban youth aged 21-30 years, providing them with short-term employment and skill development opportunities.
- Indira Gandhi Urban Employment Guarantee Scheme (IGUEGS): It is a significant initiative implemented by the Rajasthan government to address urban unemployment.
- It is modeled after the successful Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and provides guaranteed employment to urban households in Rajasthan.
Way Forward
- Skill Development and Education: Invest in quality education and vocational training to equip the workforce with the skills needed for the modern job market.
- The German dual training system combines vocational education with practical on-the-job training, ensuring that graduates are job-ready and have relevant skills.
- Job Creation: Promote economic growth and job creation through policies that support entrepreneurship, innovation, and investment.
- Social Safety Nets: Implement robust social safety nets to provide support for unemployed individuals and their families.
- Sweden’s Social Welfare System provides a high level of social protection, including unemployment insurance, parental leave, and healthcare.
- Inclusive Policies: Ensure that policies and programs are inclusive and address the needs of marginalized groups, such as women, youth, and people with disabilities.
- New Zealand’s Wage Subsidy Programme provides financial assistance to employers who hire new workers, which can help to create jobs and reduce unemployment.
- Public-Private Partnerships: Foster partnerships between the government, private sector, and civil society to create job opportunities and improve employment services.
- Urban Planning: Promote sustainable urban development that creates livable cities and provides access to essential services for all.
- Copenhagen is known for its sustainable urban development practices, including investments in public transportation, cycling infrastructure, and green spaces.
