Today, employment share of three sectors of economy is roughly – industry (17%), agriculture (57%) and services (26%).
Unemployment is mainly of two types – disguised unemployment and open unemployment. Disguised unemployment is also called under-employment. It is a situation in which a person is not contributing fully to his potential for example, a task which could have been done by 2 people, is done by 3. It happens when a field is over-crowded and everyone gets something out of it instead of getting full of it. Agriculture sector in India is marked by such unemployment.
Factors behind unemployment and under-employment conditions in India:
- Failure of industrial sector to absorb workforce. Indian industrial sector is capital intensive and less labor intensive. Unlike other developed countries, India failed to make a transition from agrarian economy to industrial economy and is directly making a shift to service economy.
- Skill mismatch and underskilled population. Quality of education and skill development is poor in Indian institutions which affect the employability of the youth.
- Agriculture has become over-crowded and burgeoning population has no other alternatives as well.
- With liberalization, there is an increasing casualization of the workforce and it is also leading to increase in incidences of under-employment and disguised employment.
- Poor infrastructure and incentive also deter people from going into self-employment. There is an acute shortage of vocational courses and government support. Access to credit is difficult to start a new venture.