Can industrial and service sector

solve the problem of unemployment

in India?

By,
Deepika & Divisha
Eco Hons, 2nd year
Hansraj College
Contents
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
INTRODUCTION

 India’s GDP of USD 691 bn makes it the 10th largest

economy in the world and 4th largest in terms of
purchasing power parity.
 One of the fastest growing economies in the world -
growing at over 8 % p.a for the last 3 years.
 It is a open secret that all of the countries of the world
are struggling with the problem of unemployment.
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
 UNEMPLOYMENT

Unemployment can be defined as a state of worklessness for a

man fit and willing to work at the prevailing wage rate.
  Major cause of Unemployment in India:

The industrial & service sector is growing undoubtedly,

but their growths aren’t in par with the growth in Indian
population.
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
EMPLOYMENT & UNEMPLOYMENT
SCENARIO IN INDIA
Labour force scenario in India:

Growth in Employment:

Year Employment
(%)
1999-2000 0.98
2004-2005 2.89

Source: NSSO Survey

Sectoral Contribution in Employment:
Sector/ Agriculture Manufacturing Services
Year

1999- 59.8 12.1 22.7

2000
2004- 58.4 11.7 23.4
2005
But, the sector has But, the sector has But, the sector has
also absorbed almost absorbed 5.5 mn share absorbed 16.8 mn share
half of the increment of the incremental of the incremental
in the workforce workforce. workforce.
 As per the data for the year 2004-05:
 only about 9 percent of the total workforce is in the
organized sector (all public sector establishments and
all non-agricultural establishments in private sector
with 10 or more workers)

 the remaining 91 percent are in the unorganized

sector, self-employed, or employed as casual wage
labourers
Features of unemployment
 The incidence of unemployment is much higher in
urban areas than in rural areas
 Unemployment rates for women are higher than those
for men:
 The incidence of unemployment among the educated
is much higher than the overall unemployment.
 There is greater unemployment in agricultural sector
than in industrial and other major sectors.

Source: Labour Bureau of the Government of India 

INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
Growth of Manufacturing sector
in India
 India has emerged as one of the world's top ten
countries in industrial production.
 Industry sectors’ contribution to real GDP in period
1992/7 was 7.3% but fell to 4.3% from period 1997/02
but again picked up after 2002/3 and contributed
almost 9.2% in the period 2002/7.
 In terms of employment in this sector, the share has
seen a marginal decline from 12.1 per cent to 11.7 per
cent during 1999-2000 to 2004-05.
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
Growth of Service sector in India

 India ranks fifteenth in the services output.

 In the five years between 1992-93 and 1996-97 the
services contributed just about half of the total growth
in GDP. In the subsequent five years to 2001-02, the
sector’s contribution rose sharply to 68% and has
remained at a high 64% in the six years since 2001-02.
 In terms of employment in this sector, it increased its
share in the employment from 22.7 % to 23.4% in
1999-2000 to 2004-05.
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
Role of government
 Make labour laws more conducive to the present
scenario
 enhance efficiency in land acquisition matters and in
allotment of land to the corporate sector for their
investment projects.
 Work upon improving the efficient functioning between
various ministries.
 Government should try to minimize the role of
corruption which directly affects our cost of services
and products.
INTRODUCTION

UNEMPLOYMENT

EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMENT

ECONOMIST’S VIEW
CONCLUSION
COMPARING INDIA AND CHINA

 Growth in GDP in India is led by the IT industry while

in china it is led by the manufacturing industry.
 In India, the share of services in GDP has risen but
with no significant increase in the share in
employment. As a corollary, the employment share of
service sector in China has increased steadily since
1978. As a result, China’s service sector has absorbed
relatively much larger labour force than India. In India,
the decline in employment has happened due to an
increase in labour productivity over a period of time.
INTRODUCTION

UNEMPLOYMENT
EMPLOYMENT & UNEMPLOYMENT SCENARIO IN INDIA

GROWTH OF MANUFACTURING SECTOR IN INDIA

GROWTH OF SERVICES SECTOR IN INDIA

ROLE OF GOVERNMENT IN ENHANCING EMPLOYMENT GROWTH

COMPARING INDIA AND CHINA’S GROWTH IN GDP & EMPLOYMEN

CONCLUSION
Measures to enhance employment
in industrial sector:
 Enhance the production capacity of firms.
 Labour union must work with managements in the way
the efficiency of the organizations get improved & the
organization does not become uncompetitive.
 Industries should be established on the barren and
waste land instead of fertile land.
 as southern states and western states are performing
well on the front of creating opportunities for better
industrial climate, other regions should try to emulate
so that greater empt opportunities are created in those
areas also.
Measures to enhance employment
in service sector

• Compulsory education to all so that the future is

educated, should be the priority of the government that
alone can serve the problem of generating employment in
this sector to a large extent.

• Also focusing on skill development will enhance

productivity per worker.
• Though agriculture sector’s contribution to GDP has
remained stagnant, this sector consists of almost over half
of our working population, thus this sector should not be
ignored by the government as the present scenario is.

• As neglect of the development needs of this sector are

likely to make India's employment and livelihood issues
even more challenging.
 Can industrial and service sector
solve the problem of unemployment
in India????

 Hence, we conclude that yes, industrial and service

sector can definitely solve the issue of unemployment
in India to a large extent by effectively implementing
measures discussed before and not forgetting to take
agriculture sector in consideration.
Thank you