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Unemployment on rise in India

Published on: September 30, 2013 | Updated on: February 10, 2017

Creating new jobs is a crucial task and plays an important role in the economy. Drop in the financial market hits job market and creates unemployment. India has the largest population of youth in the world with about 66% of the population under the age of 35, so impact of declining financial market is the worst in India. Though education level in the recent years has increased but skill development is still a crucial issue. Moreover, poverty, limited access to skill based education, work experience are some of the major factors that lead to unemployment and underemployment. During recession, job freezing is the most common occurrence done by hiring companies. Under such circumstances there is a greater degree of unemployment.

What is unemployment and its types?

Unemployment is a situation when a capable and willing to do job workforce does not get work.

Different forms of unemployment occur, few are not that harmful but few are very risky for the society as a whole. People waiting for their first job come under frictional unemployment. Such kind of unemployment is not regarded as dangerous and can be improved by creating more awareness regarding new job openings. Then comes the seasonal unemployment and this is specific to certain seasonal industries like tourism and farming. To reduce this, people must be encouraged to take other jobs in off season. The worst type of unemployment is the structural one. It comes into picture when there is a change in the structure of an economy. It is long term unemployment and can be caused by various reasons. Machines replacing human, change in the behaviour of consumer, etc are the causes. Structural unemployment can be reduced to great extent by providing retraining, on job training and by making people occupationally flexible.

Unemployment statistics in India

The Labour Bureau under Union Ministry of Labour and Employment released an Annual Employment & Unemployment Survey report. The report for 2012-13 states that Sikkim has the maximum number of unemployed people where as Chhattisgarh has the minimum number of unemployed people in the country. Overall unemployment rate of the country is 4.7%. In Northern India, Jammu and Kashmir has the maximum unemployment rate followed by Himachal Pradesh, Delhi, Chandigarh, Punjab and Haryana. Unemployment rate in rural area is 4.4% whereas in urban area it is 5.7%.

According to a National Sample Survey Office (NSSO) last year also there was a dip in India’s employment rate that had gone down to 38.6% in 2011-12 (July-June) from 39.2% in 2009-10. With this unemployment rate had gone up from 2.5% to 2.7%. In the year 2004-05 the employment rate was 42%. In the five year period falling between 2004-05 and 2009-10, 2.7 million new jobs were created where as in the previous five years 60 million new jobs were created. As per the survey number of women who lost their jobs was more than that of men. Number of employed men between 2009 and 2012 remain almost same but number of employed women dropped from 18% to 16%. Though in terms of percentage it looks small but the actual figures are really daunting. In rural sector about 90 lakh women lost their jobs in the period of two years. On the other hand 35 lakh women were added to the workforce in urban areas. Overall unemployment rate in females was more as compared to males. For females it was 7.2% whereas for male the unemployment rate was 4%.

State of Kerala being the most literate state in India had the highest rate of unemployment, i.e, close to 10% among the large states. Whereas rate of unemployment in West Bengal was 4.5% and in Assam it was 4.3%.

At the same time, decline in job creation has also been revealed by Monster.com through its Monster Employment Index India. Monster is one of the biggest online job portals. Because of the global economic conditions, Indian employers have posted less number of jobs in this job portal. The Monster Employment Index is a monthly measure of online job posting activity. The data is based on a real-time assessment. The same sluggish growth has been shown by the Naukri Job Speak Index of Naukri.com.

Number of workforce in agriculture sector has gone down and for the first time it is below 50%. The farm sector now has 49% of the workers whereas manufacturing sector has 24% and services sector has 27% workforce.

India must see and consider employment as a major driver of the economy. Economic growth in 2009-10 was 9.3% whereas in 2011-12 it came down to 6.2%.

Jobless youth is left with no other option but to go for self employment and if he does not possess specific skill then youth has to do low paying jobs like hawking magazines, etc.

On the other hand youth is now more interested in skill based job as salary is better. This has been shown by an increase in the education loans in India.  As per the data by Reserve Bank of India, in the past four years, outstanding education loan in the category of personal loan has almost doubled. Also there is a rise in the number of defaulters of education loan that clearly indicates the unemployment state in India especially for students who are looking for a job is bad.

According to the reports by NSSO, illiterate population has the lowest unemployment rate. Because this segment of the society is ready to do low paying jobs. Educated youth is facing the most of unemployment that shows lack of skill based employment opportunities in India.

Impact of Unemployment

Apart from financial impact, unemployment has many social impacts like theft, violence, drug taking, crime, health as well as it leads to psychological issues. Next comes the poverty that is directly linked with unemployment as well as inequality. Long term unemployment can actually ruin the family and the society.


In September 2015, the unemployment reached a mark that 23 lakh people applied for 368 posts of peon in the state secretariat in Uttar Pradesh. Among the applicants, 255 candidates with a PhD degree and more than two lakh hold BTech, BSc, Mcom and MSc degrees.

Read Also:

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Overpopulation in India
Democracy in India
Reservation or quota system in India
Poverty and its causes in India
Causes of rural poverty
Job insecurity and how to cope with it


I am a mother. A wife. And daughter of my loving parents by heart with passion for creativity, zeal to achieve something big in life but want to live life to its fullest.


Showing 9 Comments :

Big Blow To Modi Govt As India’s Unemployment Rate Touches 5-Year High.
Unemployment rate in India has shot up to a five-year high of 5 per cent in 2015-16, with the figure significantly higher at 8.7 per cent for women as compared to 4.3 per cent for men, says a report by Labour Bureau.
The figures could be an alarm bell for BJP-ruled government at the Centre, which has taken a series of steps such as ‘Make in India’ to create jobs for inclusive growth in the country. According to the fifth annual employment-unemployment survey at all-India level, about 77 per cent of the households were reported to be having no regular wage/salaried person.
Source: PTI
It said the unemployment rate was estimated to be 5 per cent at all-India level under the UPS (Usual Principal Status) approach. Unemployment rate was 4.9 per cent in 2013-14, 4.7 per cent (2012-13), 3.8 per cent (2011-12) and 9.3 per cent (2009-10).
Labour Bureau did not bring out any such report for 2014-15. “In rural sector, unemployment rate was 5.1 per cent whereas in urban sector, the rate was 4.9 per cent under the UPS approach,” the report said.
The figure was significantly higher among females compared to males. Female unemployment rate was estimated to be 8.7 per cent, whereas for males it was 4.3 per cent. In urban areas, female unemployment rate was estimated to be 12.1 per cent at pan-India level compared to 3.3 per cent for males and 10.3 per cent for transgenders.

Source: Reuters
The survey was conducted across all states and union territories during April 2015 to December 2015. A total sample of 1,56,563 households were covered in the survey – 88,783 households in the rural sector and 67,780 in the urban sector.
Topping the chart among the states and union territories was Tripura (19.7 per cent) followed by Sikkim (18.1 per cent), Lakshadweep (16.1 per cent), Andaman & Nicobar islands (12.7 per cent), Kerala (12.5 per cent) and Himachal Pradesh (10.6 per cent).


Due to over population in our country people are suffering for employment .


    this is 21st century we need to change our thoughts… we can easily eradicate unemployment only through network marketing business…coze im doing it and through network marketing business im building up poor peoples life from zero to hero.


Hi Ramandeep Kaur

this is really good article i gain lot of knowledge from this post but you did not write How to Prevent Unemployment in India and i want to write about this some thing because some people seeking for ideas to prevent this.
i would like to suggest some ideas by which we can stop some unemployment in India.

1–Providing good basic knowledge

2-Stop coaching class (because i seen many of students those who were took coaching from different institutes they are still nothing doing )

3–Learning technology (technology is the main way by which we can learn and earn huge money and support our families very good scope in Internet marketing and blogging )

4-Increasing tourism in India.


plz u shud give conclusion

k.balaselvakumar August 26, 2015 at 8:58 pm

i like this you can also give in the form of introduction content conclusion

Nalliah Thayabharan August 2, 2014 at 5:39 pm

500 years ago, nobody was unemployed in India since every Indian man, woman and child was fully employed from sunrise to sunset.
The west not only should talk about free flow of capital and good but also labour migration should be free of restrictions.
Every debt is not bad but debt which Indians take from western banks does no good to our country.
Every time Indians pay interest, Indians are WORKING for the lender – in effect becoming their slave.
Indians must work just to support that debt.Not only has the lender become the master in this regard, he/she is becomingwealthier at the same time.
This is one important way that the rich become richer,and the poor become poorer.
The “rich” are masters of their money, not servants to it, as it works and multiplies forthem.
Indians lose their freedom at the moment Indians allow debt to make us the servant.Is their economy becoming a slave to World bank and foreign banks?
With this much debt, the lenders have the power to affect the value of Indian currency/markets. They rule!
Eventually, they choose Indian Prime Minister and Finance Minister, despite of any political group won the election.Manmohan Singh worked in World Bank before becoming Finance Minister and Prime Minister of India.
Similarly Chidambaram, Pranab Mukherjee and Montek Singh Ahluwalia were former employees of World Bank & IMF.In 1991, when India needed loan, the World Bank agreed to give loan on condition.
The condition was to install Finance Minister of its choice and that guy was Manmohan Singh.
Sad but true.
World Bank & IMF are just international branches of the private banking cartel that also owns the US Federal Reserve, the Act for which was secretly draftedby a handful of men, all heads of banking dynasties.


That was an awesome write up! I am planning to create an awareness video about unemplyment in India and how it could impact peoples lives!

As a friend to few unemployed friends, I know how it feels to live life without a job!

I need lot of information about this!
Is there any way, you can help me?


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