Urban Unemployment in India

IN THE POOR and under-developed areas of the world, there is widespread under-utilization of a key factor of production, labor. Unemployment exists in its variety-with people lined up at exchanges, particularly in urban industrial areas. It exists also in the disguised unemployment and under-employment of the rural, and to a lesser extent the urban, sections of the country. In India, which is now well into its Second Five Year Plan for national development and has achieved impressive successes in its First Plan, there are nonetheless today some 5 to 6 million of open unemployed' with perhaps an additional IO to I5 million of disguised unemployed and severely under-employed. These numbers encompass at least IO percent of India's labor force. Indeed, that percentage of the urban working group is openly unemployed, with a significant additional number in cities only partially employed. Unemployment in a very low income society may well mean economic waste; it certainly constitutes a threat to political stability. Despite India's major effort at development, it has been suggested that her unemployment increased by about 4 million in the years of the First Plan, 1951-56; the Planning Commission agrees that employment opportunities . . . have not been increasing pari passu with the increase in labor force.2 There is ample reason, therefore, why a reduction in the level of unemployment is given a specific place as a distinct objective in India's Second Plan. The Planning Commission is not prepared to accept only that expansion in which might arise from the Plan's stipulated increases in over-all output and levels of living. But while there is a clear desire to do something about unemployment, the prescription is not clear, either to the planner or to his economic advisor. Relatively little is known about the nature, as well as the precise extent, of unemployment in poor lands. However, materials gradually becoming available for India, largely on a survey and sample basis, permit a first look, at least for urban areas, at the structure of the body of unemployed; they

Demographic economics · Economic growth · Economics · Geography · Unemployment · Income, Poverty, and Inequality

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  Open Access•Stephen P Heyneman•World Development•1980

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