Employment is an activity that generates income. In order to raise the standard of living and income of people, to solve the problem of poverty and to increase the national income, it is imperative to raise the level of employment in the country.

Actually the national income of a country is estimated from the volume of employment is that country multiplied by the average productivity of the labourers. It is by providing more productive employment to the people of India that the national income can be increased and the problem of poverty properly solved.

Different aspects of Employment Problem

The three main aspects of the problem of employment in India are as under;


(i) Low proportion of labour force in total population of India.

(ii) Large part of Labour force is either unemployed or under employed.

(iii) Low average productivity of labourers.

(i) Low Proportion of Labour Force:


People falling in the age-group of 15-60 wars, constitute the labour force of the country. In India, working population is barely (37J5) percent of the total population.

Thus only one person out of 3 persons is a worker and the other two are dependent on him. In developed countries, working population constitutes 40 to 50 percent of the total population. High dependency ratio implies low income per capita and therefore poverty.

(ii) Unemployment and Under Employment:

The ugly calamity that can affect the life of a nation is the problem of unemployment. Unemployment in our country is quite different from that of advanced countries of the world.


The well developed countries like U.S.A. and England usually suffer from a frictional or cyclical unemployment but in the case of India, it is a permanent feature. In fact, it has become multi-dimensional phenomenon and in recent years it assumed an alarming proportion.

In the opinion of late President V.V. Giri, “Unemployment is the problem of problems. Unemployment has made our youths Nexalites. Educated youth are deprived of all deserving comforts and their growing discontent has given scope for the speedy growth of Nexalism”.

Unemployment in India is of a complex nature. In a sense, it is a colossal waste of human resources which further hurdles the tempo of economic development of a country. It, thus calls for a remedial action at the earliest possible.

(iii) Low Productivity of Employment:


Two important aspects of employment problem in India are: (1) Quantitative. It means the number of persons getting employment. (2) Qualitative. It refers to the productivity of the persons getting employment.

In India, not only the number of job-seekers is very large but also the productivity of those who are in the jobs is very low. Labour productivity is measured in terms of per capita labour output. It is calculated by dividing the total output by the total labour force i.e.

Per Capita Productivity = Total Output / Total Labour

On the basis of the NSS survey, taking all persons under the weekly status criteria, 16 million persons can be considered unemployed. On the basis of the ratio derived from the earlier rounds of NSS about 12 million persons are estimated to be severely under-employed in the beginning of 1990.