Focus: GS III: Indian Economy
Why in News?
According to the recent periodic labour force survey, the urban unemployment rate dipped further in the January to March 2023 quarter.
- The unemployment rate in current weekly status (CWS) for persons of age 15 years and above in urban areas declined to 6.8% in the January to March 2023 quarter.
- The urban labour force participation rate (LFPR) for all ages, however, inched up to a high of 38.1% in the fourth quarter of last fiscal from 37.9% in the October to December 2022 period.
- The urban LFPR for persons above 15 years of age was even higher at 48.5% in the fourth quarter of FY23.
Periodic Labour Force Survey (PLFS) Overview:
- The Periodic Labour Force Survey was launched by the National Statistical Office (NSO) in April 2017.
- The survey was initiated to address the need for more frequent and timely availability of labor force data.
- To estimate key employment and unemployment indicators within a short time interval of three months specifically for urban areas using the “Current Weekly Status” (CWS) approach.
- To estimate employment and unemployment indicators annually using both the “Usual Status” (ps+ss) and CWS approaches for both rural and urban areas.
The PLFS focuses on estimating the following indicators:
- Labour Force Participation Rate (LFPR): It represents the percentage of individuals in the population who are part of the labor force, which includes those who are employed, seeking work, or available for work.
- Worker Population Ratio (WPR): This indicator represents the percentage of employed individuals in the population.
- Unemployment Rate (UR): The UR indicates the percentage of individuals who are unemployed among those in the labor force.
Current Weekly Status (CWS):
- CWS refers to the activity status of individuals based on their activities during the preceding seven days before the survey.
- The Periodic Labour Force Survey is conducted by the National Sample Survey (NSO), which operates under the Ministry of Statistics and Programme Implementation (MoSPI).
Types of Unemployment in India
- Disguised Unemployment: This is a situation in which more people are employed than are required. It is mostly seen in India’s agricultural and unorganised sectors.
- Seasonal unemployment: Unemployment that happens only during particular seasons of the year. In India, agricultural labourers rarely work throughout the year.
- Structural Unemployment: This is a type of unemployment that occurs when there is a mismatch between the jobs available and the abilities of the available workers.
- Cyclical unemployment: Unemployment that rises during recessions and falls with economic expansion. It is mostly a phenomenon of capitalist economies.
- Frictional Unemployment: It is also known as Search Unemployment, is the time lag between jobs when someone is looking for a new job or moving jobs.
Causes of Unemployment in India
- Jobs in the capitalist world have become highly specialised but India’s education system does not provide the right training and specialisation needed for these jobs.
- In India nearly half of the workforce is dependent on Agriculture – even though agriculture is underdeveloped in India and only provides seasonal employment.
- Mobility of labour in India is low due to factors like language, religion, and climate.
- The industrial development had adverse effects on cottage and small industries – as the cottage industries fall, many artisans become unemployed.
- Constant increase in population has been a big problem and one of the main causes of unemployment.
- Certain work is prohibited for specific castes in some areas and this also contributes to unemployment.