Unemployment remains one of India’s most persistent economic challenges. While the raw statistics might not always capture the full picture, the reality is more complex than simple employment-unemployment binaries. In this article, we’ll explore the three main types of unemployment in India as described in Chapter 2, “People as Resource,” from the NCERT Economics textbook.
3 Types of Unemployment in India
Unemployment manifests in various forms across India’s urban and rural landscapes. Each type has distinct characteristics, causes, and implications for economic policy.
Three major types of unemployment are:
- Educated Unemployment
- Seasonal Unemployment
- Disguised Unemployment
Seasonal Unemployment
Seasonal unemployment occurs when people cannot find work during certain periods of the year due to the seasonal nature of their occupation.
As explained in the NCERT Chapter 2 “People as Resource,” this type of unemployment is particularly common in agricultural communities. The textbook highlights how agricultural work follows natural cycles with intense activity during planting, weeding, and harvesting seasons, followed by periods of minimal work requirements.
During peak seasons, all hands are needed in the fields for sowing, harvesting, weeding, and threshing. However, during off-seasons, agricultural workers have little to no productive work. This creates a cycle where workers remain employed for only part of the year while facing unemployment during other months.
This pattern affects millions of rural households whose livelihoods depend primarily on agriculture. The income earned during peak seasons must sustain these families through the idle periods, often leading to financial strain and seasonal poverty.
Disguised Unemployment
Disguised unemployment represents one of the most pervasive issues in India’s rural economy. It occurs when more people are engaged in work than actually required, resulting in underutilization of labor.
The NCERT textbook offers a clear example: “In case of disguised unemployment, people appear to be employed. They have agricultural plot where they find work. This usually happens among family members engaged in agricultural activity. The work requires the service of five people but engages eight people. Three people are extra.”
These three additional workers contribute marginally or nothing to overall productivity. If they were removed from the field, the total output would remain unchanged. Yet they continue working because:
- Family farming traditions often involve all members
- Alternative employment opportunities are scarce
- The social security net is minimal, forcing everyone to participate in whatever work is available
This phenomenon masks the true extent of unemployment in official statistics, as these individuals appear employed despite their minimal productive contribution.
Educated Unemployment
Perhaps the most concerning trend in recent decades has been the rise of educated unemployment, primarily affecting urban areas. This refers to the situation where individuals with formal education—ranging from high school diplomas to post-graduate degrees—cannot find jobs matching their qualifications.
As noted in the “People as Resource” chapter: “Many youth with matriculation, graduation and post-graduation degrees are not able to find jobs. A study showed that unemployment of graduate and post-graduate has increased faster than among matriculates.”
The textbook highlights a paradoxical situation where India simultaneously faces “surplus of manpower in certain categories coexist with shortage of manpower in others.” For example, there might be thousands of graduates unable to find work while certain technical positions remain unfilled due to skills mismatches.
This situation stems from several factors:
- Education system not aligned with market demands
- Slower job creation compared to the number of graduates
- Limited industrial growth in certain sectors
- Geographical mismatches between job locations and job seekers
The NCERT textbook emphasizes that educated unemployment represents “a great social waste” as these individuals have invested years in education but cannot use their knowledge productively.
Impact on Society and Economy
The chapter “People as Resource” points out several consequences of these different types of unemployment:
- Unemployment leads to wastage of manpower resource
- People who are an asset for the economy turn into a liability
- There is a feeling of hopelessness and despair among the youth
- Unemployment tends to increase economic overload” as more people depend on the working population
When families struggle with unemployment, there are often broader social impacts including “a general decline in health status and rising withdrawal from the school system,” perpetuating cycles of poverty
By investing in human capital through education, healthcare, and creating appropriate employment opportunities, India can transform its population from a potential liability to its greatest resource for economic development.Retry
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