New job creation is a critical endeavour that has a significant economic impact. For most countries, the economic crisis has morphed into a social crisis, resulting in a high rate of unemployment. Unemployment is a condition in which people have the aptitude and ability to work and earn money but are unable to do so due to a lack of suitable employment opportunities. It is also known as “involuntary inactivity.” Unemployment does not imply that there isn’t any work available. It literally means ‘lack of work.’ Unemployment can be characterized as a situation in which a substantial number of able-bodied people of working age are willing to work but are unable to do so at the present wage rate.
The number of persons who are unable to acquire work in relation to the available people in the labor market measures the rate of unemployment in a given country.
Seasonal, Frictional, Cyclical, and Structural unemployment are the most common types of unemployment. In terms of population density, India is the world’s second largest country. The country’s unemployment rate is quite high, owing to the large number of people who are unable to find work.


Rural Unemployment in India: India’s rural population accounts for around 70% of the total population. However, there is insufficient employment in rural areas for everyone. This can result in two types of unemployment. Unemployment and underemployment are problems that exist in the rural economy at the same time.

Frictional Unemployment: It occurs when people are unemployed for a brief period of time while looking for a new job or changing occupations. The time gap between jobs is known as frictional unemployment, also known as Search Unemployment. Frictional unemployment is referred to as voluntary unemployment because the source of unemployment is not a lack of jobs, but rather the workers’ own decision to leave in search of better chances. It exists because people move from places, jobs, and sectors where their productivity is low to places where their productivity is high, and they should be encouraged to do so.

Disguised Unemployment: This refers to the large number of rural people who are employed in agriculture in excess of what is required due to increased pressure on land. Uncovering hidden unemployment is most common in the unorganized sector or in agriculture.

Seasonal Unemployment: This word is self-explanatory. Seasonal unemployment is common in industries including construction, agriculture, canning, and tourism, where the weather or the calendar dictates when production can be carried out or demand levels. It is common to utilize seasonally adjusted unemployment figures for measuring the business cycle and the strength of demand in the labor market.
Underemployment is a word that can be used to describe this situation. That state of unemployment in which people are unemployed for part of the year, such as in India, where laborers are rarely employed all year.

Structural Unemployment: When a country’s economic structure changes dramatically, structural unemployment occurs. Normally, these changes have an impact on the demand for or supply of a production factor. In other words, structural unemployment is a result of global technological and economic development in every field. This type of unemployment occurs when a worker’s abilities do not meet the market’s job availability. Many people in India do not acquire occupations that match their talents or do not get positions owing to a lack of essential skills, and because of their low education level, it is critical to offer them with relevant training.

Technological Unemployment: Technological unemployment develops as a result of specific changes in production procedures that do not necessitate a large amount of manual labor. Modern technology has overtaken the need for and significance of physical labor in recent years, resulting in technical unemployment. According to World Bank data from 2016, the proportion of jobs in India threatened by automation increased by 69 percent year over year.

Causes of Unemployment in India:

  • The Joint Family System
  • Specialization in the Workplace
  • Low Rates of Economic Growth
  • Mobility of the workforce
  • Norms of Conduct
  • Cottage and small-scale industries are on the decline.
  • Population growth and technological advancements
  • A Scarcity of physical capital