business cycles (ii)
TRANSCRIPT
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Nature and Trends of
Unemployment inIndia
Pyare Lal Verma, Faculty Eco/QM
PREPARED BY:
Macroeconomics &
Business Environment
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1 To understand about the nature and Trends of Unemployment in India.
3 To provide an estimate of unemployment in India.
To understand about the nature of urban unemployment in India.
Issues associated with implementation of employment programs in India
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Session18 Nature of Unemployment in India
a) Nature of unemployment in India isi. Structural
ii. Disguised
b) Cause of unemployment: inadequacy of productive
capacity to create adequate jobsc) Cyclical unemployment (Keynesian involuntary
unemployment) is also on increase since last two
decades
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Session18 Classification of unemployment in India
a) Urban Unemploymenti. Industrial unemployment
ii. Educated unemployment
b) Rural Unemployment
i. Open unemploymentii. Disguised unemployment
iii. Seasonal unemployment
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Session18 Estimates of unemployment in India
a) Planning Commission since 1951 provides estimates on
unemployment.
c) Raj Krishna calculate first ever most reliable estimate of
unemployment rates from data provided by NSS.
e) NSSO developed and standardized the concepts and definitions
of labor force, employment and unemployment suitable to Indian
condition.
g) Since 1972-73 these concepts are adopted by NSSO andPlanning Commission.
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Session18 Unemployment Measurement in India
The three concepts of unemployment developed by NSSO are:
b)Usual Status : determine usual activity status & indicate chronic
unemployment as usually unemployment in the reference year are
counted as unemployed.
d)Weekly Status : Determine activity status of a person in precedingseven days. Any person worked for an hour or more during that
period is employed.
f)Daily Status : it considers the activity status of a person for each
day of the preceding seven days of reference period. It is ratio oflabor days per week reported as unemployed to the total labor force
days per week.
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Session18 Unemployment Measurement in India
a) Daily status concept provides the most appropriatemeasure of unemployment as it cover open as well as
partial unemployment
c) Weekly status is rough measure of proportion ofpeople remained unemployed for a whole week.
e) Usual status is the rough estimate of the chronic
unemployment rate.
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Session18 Estimates of Unemployment during eighties
Status 1972-73 1977-78 1983 1987-88Usual Principal Status - 4.23 2.77 3.77
Usual Principal & Subsidiary
Status
1.61 2.47 1.90 2.62
Weekly Status 4.32 4.48 4.51 4.80
Daily Status 8.35 8.18 8.28 6.09
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a) A shift from the state of unemployment towards greater open
unemployment
b) There are large differences in the unemployment rates among different
states.
c) In April 1992 the number of people seeking full time new employment
opportunity stands at 23 million.
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Session18 Employment Guarantee Programs
a) Most of unemployment in urban areas are Open &Undisguised
b) Government of India take up various employment
guarantee programs like:
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Program Objective
Rural Works Program (1970-71) Construct permanent civil works
Crash Scheme for rural employment
(1972)Projects of durable nature
DPAP (1973)
Command Area Development Program(1974-75)
Hill Area Development Program (1974)
Desert Development Program (1977-78)
Area Development Program
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Session18 Employment Guarantee Program
Program Objective
Food for Work Program (FFWP) 1977Create durable community assets
and social infrastructure
Training for Rural Youth in Self
Employment (TRYSEM) 1979
Provide technical skill to 18 to 35
years youths
National Rural Employment Program(NREP) 1980 Restructured and renamed FWP totackle seasonal unemployment
Integrated Rural Development Program
(1976-80)
Provide self employment and raise
level of income
Development of Women and Children in
Rural Areas (DWCRA) 1982-83Supportive program for IRDP
Rural Landless Employment Guarantee
Program (RLEGP) 1983
Program to supplement NREP, 100day employment to one member of
landless family
Self Employment Scheme for Educated
Unemployed youth (SEEUY) 1983-8418-35 year old
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Session18 Employment Guarantee Program
Program Objective
Self Employment Program for Urban Poor
(SEPUP) 1986-87Families coming under BPL
Jawahar Rojgar Yojana (JRY) 1989 Merging NREP and RLEGP
Nehru Rojgar Yojana (RRY, 1989) with
three components a) The scheme forUrban Micro Enterprise; b) The scheme
for Urban Wage Employment; c) The
scheme for Housing and Shelter
Upgradation
JRY for rural areas and NRY for
urban areas
National Rural Employment Guarantee
Act (NREGA)
To reduce migration of rural poor
households in the lean period byproviding 100 days of guaranteed
unskilled manual labor at minimum
wage. Works include a) water
conservation; b) land development;
c) drought proofing
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Session18 Implementation of Employment Program
a) Lack of resource to finance these programs
c) Choice of appropriate work to be done
e) Lack of clarity regarding organization of these programs
g) According to Ragner Nurkse, LDCs cannot raise adequate
resources for capital projects from taxes and domestic saving,
they therefore shall import foreign capital
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Session18
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