Question

Essay type questions

Explain the effect of unemployment on Indian economy.

Answer 1

The following are some of the major social and economic effects of unemployment in Indian economy.
a. Social unrest- Unemployment and poverty push people towards crime and other social ills. This increases the level of social unrest in the society.
b. Loss of dignity- Unemployment creates a feeling of inferiority among the people who are not able to get the desired jobs. This may lead to a feeling of low self esteem and loss of dignity.
c. Deterioration of the quality of life- Unemployment leaves people with lower incomes and pushes them towards poverty. Consequently, their standard of living falls.
d. Economic offenses and crime- Unemployed people often get involved in criminal activities to support their livelihood.
e. Poverty and income inequality- Increasing unemployment adds to poverty and income inequality due to the varying distribution of income among people.
f. Loss in output- Since large-scale unemployment implies under-utilisation of manpower, the level of output in such a scenario is less than the optimum level.