Unemployment in India and the World: A Decadal Overview (2015-2024)

Introduction

Unemployment is an important economic indicator of the well-being of a country's economy. It is defined as the proportion of people looking for and willing to work but not working. Unemployment in India has been a chronic phenomenon, determined by structural inefficiencies, business cycles, and external shocks such as the COVID-19 pandemic. Unemployment is different around the world, since it is determined by business cycles, technological advances, demographic changes, and government policies.

Historical Background

Indian unemployment developed as the country underwent economic and political change:

• Pre-Independence Period (Until 1947): British colonial rule in India was plagued by rampant poverty and unemployment because of deindustrialization, decline of the ancient crafts, and a stagnant agriculture economy that could not keep up with the rising population.
• Post-Independence Phase (1947-1980s): India had a directed industrialization mixed economy following independence. The Five-Year Plans were to generate employment through behemoth public sector enterprises. Unemployment did occur, particularly in rural India. The Green Revolution (1960s-70s) while raised the productivity of agriculture but could not generate enough employment opportunities to absorb the growing labor force.
• Economic Liberalization (1991 Onward): The 1991 economic liberalization aligned the economy towards the market, inducing high growth in employment and GDP in sectors like IT and services. Although growth was manyfold, it was uneven and was not conducive to solving the problem of structural unemployment.
• 21st Century Trends: IT, finance, and telecom sectors experienced a boom in the early 2000s, lowering urban unemployment. Automation, however, the unorganized sector of the job, and economic recessions have led to fluctuation in job opportunities. The 2008 financial crisis and the COVID-19 pandemic significantly affected employment, resulting in an all-time record level of unemployment.

Unemployment in India: Current Scenario

Recent Unemployment Rates

Year	Unemployment Rate (%)
2015	5.0
2016	5.2
2017	5.5
2018	6.1
2019	5.8
2020	7.1
2021	6.3
2022	5.8
2023	5.4
2024	7.8

Note: The 2024 data are provisional and subject to revision.

Analysis:

• 2015-2019: The period witnessed a consistent rise in unemployment, hitting 6.1% in 2018. Structural readjustments in the economy and challenges in creating jobs were some of the drivers of the rise.
• 2020: The outbreak of the COVID-19 pandemic led to a steep rise in unemployment to 7.1% as lockdowns and economic dislocation started to take their toll.
• 2021-2023: As the economy rebounded, unemployment declined and was 5.4% in 2023.
• 2024: Preliminary statistics indicate a jump in unemployment to 7.8%. This is likely to be caused by economic instability globally and domestic challenges.

Source: Forbes India

State-wise Unemployment Rates (December 2024)

State	Unemployment Rate (%)
Haryana	37.4
Rajasthan	28.5
Bihar	17.3
Gujarat	2.8
Karnataka	2.9
Maharashtra	3.1

Source: Trading Economics

The rate of unemployment varies considerably across states in India. In December 2024, the highest unemployment rates were reported by Haryana and Rajasthan with 37.4% and 28.5%, respectively. Conversely, some of the lowest unemployment rates were reported by states such as Gujarat (2.8%), Karnataka (2.9%), and Maharashtra (3.1%), indicating regional differences in employment opportunities and economic growth.

Youth Unemployment

Youth unemployment is a matter of great concern, and the rates are much higher than the national average. The Wall Street Journal in one of its reports stated that most developing nations, such as India, experience high youth unemployment among graduates, which is also the cause of larger socio-economic problems. It is an indicator of the inability of youth graduates to find employment equivalent to their qualification.

Source: Wall Street Journal

Types of Unemployment in India

• Structural Unemployment: Because of a mismatch between the skills of workers and the demands of the job market. Most graduates find it difficult to secure employment that is commensurate with their qualifications.
• Cyclical Unemployment: Associated with economic recessions, e.g., the 2008 financial crisis and the COVID-19 recession, which resulted in large-scale layoffs.
• Frictional Unemployment: When employees are switching jobs or entering the workforce. Natural in every economy, though in India it could be extended due to ineffective job-worker matching mechanisms.
• Disguised Unemployment: Prevalent in agriculture, where the employment of extra employees than required is practiced, diminishing productivity. This type of unemployment is common in rural India.
• Seasonal Unemployment: It occurs in industries such as agriculture, tourism, and construction, where workers are employed for a season.

Global Unemployment Trends

Year	Global Unemployment Rate (%)
2015	5.8
2016	5.7
2017	5.6
2018	5.4
2019	5.3
2020	6.6
2021	6.0
2022	5.7
2023	5.2
2024	5.0

Note: The 2024 figures are projections based on existing data.

Analysis:

• 2015-2019: There was a consistent reduction in global unemployment, mirroring economic growth and employment opportunities in many different regions.
• 2020: The COVID-19 pandemic resulted in a sudden spike in unemployment globally, with the rate rising to 6.6%.
• 2021-2024: Post-pandemic recovery strategies resulted in a moderate decline in unemployment, hitting a record low of 5.0% in 2024.

Source: Reuters

Causes of Unemployment in India

• Low Economic Growth: The economy has not been able to generate sufficient jobs to keep pace with the growth of the workforce.
• Population Growth: India contributes approximately 10 million workforce annually, and this puts an enormous burden on the labor market.
• Skill Gap: Most graduates are not job-ready even with formal education since they do not possess industry-relevant skills.
• Automation and AI: Greater application of technology in sectors such as manufacturing

Government Initiatives to Counter Unemployment

The government of India has initiated several schemes to counter unemployment:

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Offers 100 days of wage employment in rural regions.
• Skill India Mission: Aims to improve vocational training of the youth.
• Startup India & Standup India: Promotes entrepreneurship and innovation.
• Production-Linked Incentive (PLI) Scheme: Improves manufacturing employment.
• National Apprenticeship Promotion Scheme (NAPS): Promotes industries to hire apprentices.

There are policy implementation gaps and impact still, despite all these efforts.

Recommendations for Reducing Unemployment

India will need to undertake long-term structural reforms to decrease the rate of unemployment.

• Strengthen Industry: Incentivizing local production and infrastructural growth will create greater employment opportunities.
• Increase Education & Skills Development: The educational system will be transformed based on industry requirements, which will bridge the skills gap.
• Empower Entrepreneurship: Govt. subsidies, tax benefits, and online platforms can provide a push to small businesses.
• Augment Digital & Gig Economy: Frameworks for safeguarding the jobs of gig economy workers (such as Swiggy, Uber, Zomato delivery personnel) must be enacted.
• Enlargen Social Security: A universal program of unemployment allowances might mildly alleviate the strain on jobhunters.

Conclusion

Unemployment is still a major issue in India, necessitating substantial alterations in short-term as well as long-term policy interventions. Although government policies have shown improvement, deep-rooted, economic as well as educational reforms are needed for sustainable employment expansion. Redressing skill shortages, enhancing rural employment, and tapping digital possibilities will be instrumental in molding India's labor market over the next few decades.

References

• Forbes India – Unemployment Rate in India (2024). Retrieved from Forbes India
• Trading Economics – India Unemployment Rate (2024). Retrieved from Trading Economics
• Reuters – Global Unemployment Set to Hold Near Historical Low of 5%, ILO Says (2025). Retrieved from Reuters
• Wall Street Journal – Big Dreams Built on Higher Education Sour Worldwide for Jobless Graduates (2024). Retrieved from Wall Street Journal