Poverty & Unemployment (Part – I)

41. Employment growth in the organized sector in India during the period between 1994 and 2007 has: [U.P.P.C.S. (Spl.) (Mains) 2008]

(a) stable
(b) increased
(c) declined
(d) doubled

Correct Answer: (c) declined

Solution:As per the Economic Survey 2009-10, employment growth in the organized sector in India (public and private sector combined) had declined during the period between 1994 and 2007. Employment in the organized sector increased at the rate of 1.2 percent per annum during 1983-94, but it decelerated to 0.03 percent per annum during the period 1994- 2007.

The latest Economic Survey of India highlights significant improvements in employment and skill development. The survey provides data that aligns with the findings of the report that employment is on the rise in India. Key trends of Economic Survey include:
1. Improved Labor Market: Indian labour market indicators have improved significantly with the unemployment rate declining to 3.2 per cent in 2022-23.
2. Sectoral Employment: Agriculture remains dominant, employing over 45% of the workforce, though there is a gradual shift toward manufacturing and services.
3. Youth Employment: According to PLFS, youth (age 15-29 years) unemployment rate has declined from 17.8 per cent in 2017-18 to 10 per cent in 2022-23.
4. Female Workforce Participation: The female labor participation rate has steadily increased due to supportive policies.
5. Manufacturing Recovery: Factories employing over 100 workers experienced 11.8% growth between FY18 and FY22, indicating that larger industrial units are creating more jobs than smaller ones.
6. Wage Growth: During FY15-FY22, the wages per worker in rural areas grew at 6.9 per cent CAGR visà-vis a corresponding 6.1 per cent CAGR in urban areas. This growth reflects the rising demand for labor in rural industries such as construction and manufacturing, as well as public employment programs like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
7. EPFO Payroll Growth: The yearly net payroll additions to the EPFO have more than doubled from 61.1 lakh in FY19 to 131.5 lakh in FY24, driven by new job creation and greater formalization of employment.
8. Gig Economy: India's gig economy is expanding rapidly, with the workforce in this sector expected to grow to 2.35 crore by 2029-30.
9. Manufacturing and AI: The manufacturing sector remains shielded from automation, offering continued job growth opportunities.

42. Most of the unemployment in India is: [Uttarakhand P.C.S. (Pre) 2010]

(a) Technological
(b) Cyclical
(c) Frictional
(d) Structural

Correct Answer: (d) Structural

Solution:The nature of frequent unemployment in developing countries like India and underdeveloped countries, is structural. Structural unemployment arises due to mismatch between the skills of labour force and the jobs available in the market. The main cause behind it, is poor education and training. It reflects the backwardness of economic infrastructure, limited availability of capital and oversupply of labour force. Many people in India do not get job matching to their skills or due to lack of requisite skills they do not get job and because of poor education level, it becomes difficult to train them.

43. Disguised unemployment means: [J.P.S.C. (Pre) 2016]

(a) Unemployment resulting from change in technology
(b) Fall in productivity of labour
(c) Marginal productivity of labour is zero
(d) People in large numbers remaining unemployed

Correct Answer: (c) Marginal productivity of labour is zero

Solution:The term 'disguised unemployment' commonly refers to a situation of employment with surplus manpower, in which some workers have zero marginal productivity (change in output resulting due to employing an additional unit of input) so that there removal will not affect the volume of total output. Also known as hidden unemployment, this refers to a situation where labour that is employed in a job is not actually utilized for the production of goods and services. In other words, it refers to employment of more persons in a job which lesser number of persons can accomplish.

44. Disguised unemployment refers to: [U.P.P.C.S. (Mains) 2004, U.P.P.C.S.(Spl.) (Mains) 2008, U.P.P.S.C.(GIC) 2010]

(a) persons with no jobs
(b) unemployment among housewives
(c) unemployment among people above 60 years of age
(d) employment of more persons in a job which lesser number of persons can accomplish

Correct Answer: (d) employment of more persons in a job which lesser number of persons can accomplish

Solution:The term 'disguised unemployment' commonly refers to a situation of employment with surplus manpower, in which some workers have zero marginal productivity (change in output resulting due to employing an additional unit of input) so that there removal will not affect the volume of total output. Also known as hidden unemployment, this refers to a situation where labour that is employed in a job is not actually utilized for the production of goods and services. In other words, it refers to employment of more persons in a job which lesser number of persons can accomplish.

45. Disguised unemployment generally means: [I.A.S. (Pre) 2013]

(a) large number of people remain unemployed
(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low

Correct Answer: (c) marginal productivity of labour is zero

Solution:The term 'disguised unemployment' commonly refers to a situation of employment with surplus manpower, in which some workers have zero marginal productivity (change in output resulting due to employing an additional unit of input) so that there removal will not affect the volume of total output. Also known as hidden unemployment, this refers to a situation where labour that is employed in a job is not actually utilized for the production of goods and services. In other words, it refers to employment of more persons in a job which lesser number of persons can accomplish.

46. In India disguised unemployment in main characteristic of: [U.P. Lower Sub. (Pre) 2004]

(a) Tertiary Sector
(b) Secondary Sector
(c) Primary Sector
(d) None of the above

Correct Answer: (c) Primary Sector

Solution:In India, disguised unemployment is main characteristic of primary sector (agriculture and allied sectors), this is due to the high pressure of the population on land and other natural resources. Due to lack of technological development most of the population is engaged in agriculture and allied activities, due to which more people involve in the work that can be done by lesser number of people.

Unemployment Types include structural unemployment caused by industry changes, cyclical unemployment due to economic downturns, frictional unemployment during job transitions, seasonal unemployment in specific industries, and disguised unemployment in underutilised labour.

Involuntary Unemployment: This represents a scenario where individuals actively seek jobs but cannot find any due to the excess labour supply. For Example, Fresh graduates in urban areas struggle to secure employment despite multiple applications.
Voluntary Unemployment: This occurs when individuals choose not to work despite job availability, often due to dissatisfaction with pay, job quality, or dignity concerns. For Example, A highly qualified engineer refusing a low-paying customer service job.
Structural Unemployment: Results from changes in the economy, creating mismatches between job requirements and workforce skills. For Example, Factory workers lose jobs due to automation in manufacturing industries.
Seasonal Unemployment: Affects workers in industries with seasonal demand, leading to temporary joblessness during off-seasons. For Example, Tourist guides and hotel staff face unemployment during the off-peak travel season.
Cyclical Unemployment: This occurs due to economic downturns when businesses lay off workers during recessions but rehire them during recovery phases. For Example Layoffs in the retail sector during economic slumps due to reduced consumer spending.
Disguised Unemployment: Found in sectors where excess workers contribute little or no additional productivity. For Example, Multiple interns in an office duplicate tasks that do not add value to operations.
Frictional Unemployment: Temporary unemployment during job transitions, as individuals leave one job to search for another. For example, A software developer quit to find a better role in a different company.

47. In India disguised unemployment is found in: [U.P.P.C.S. (Mains) 2006]

(a) Agricultural sector
(b) Industrial sector
(b) Industrial sector
(d) Trade sector

Correct Answer: (a) Agricultural sector

Solution:In India, disguised unemployment is main characteristic of primary sector (agriculture and allied sectors), this is due to the high pressure of the population on land and other natural resources. Due to lack of technological development most of the population is engaged in agriculture and allied activities, due to which more people involve in the work that can be done by lesser number of people.

Unemployment Types include structural unemployment caused by industry changes, cyclical unemployment due to economic downturns, frictional unemployment during job transitions, seasonal unemployment in specific industries, and disguised unemployment in underutilised labour.

Involuntary Unemployment: This represents a scenario where individuals actively seek jobs but cannot find any due to the excess labour supply. For Example, Fresh graduates in urban areas struggle to secure employment despite multiple applications.
Voluntary Unemployment: This occurs when individuals choose not to work despite job availability, often due to dissatisfaction with pay, job quality, or dignity concerns. For Example, A highly qualified engineer refusing a low-paying customer service job.
Structural Unemployment: Results from changes in the economy, creating mismatches between job requirements and workforce skills. For Example, Factory workers lose jobs due to automation in manufacturing industries.
Seasonal Unemployment: Affects workers in industries with seasonal demand, leading to temporary joblessness during off-seasons. For Example, Tourist guides and hotel staff face unemployment during the off-peak travel season.
Cyclical Unemployment: This occurs due to economic downturns when businesses lay off workers during recessions but rehire them during recovery phases. For Example Layoffs in the retail sector during economic slumps due to reduced consumer spending.
Disguised Unemployment: Found in sectors where excess workers contribute little or no additional productivity. For Example, Multiple interns in an office duplicate tasks that do not add value to operations.
Frictional Unemployment: Temporary unemployment during job transitions, as individuals leave one job to search for another. For example, A software developer quit to find a better role in a different company.

48. Disguised unemployment in India is mainly related to: [U.P.P.C.S. (Mains) 2017]

I. Agricultural sector

II. Rural Area

III. Manufacturing sector

IV. Urban area

Select the correct answer from the codes given below:

(a) I and III
(b) II and IV
(c) III and IV
(d) I and II

Correct Answer: (d) I and II

Solution:Disguised unemployment is the phenomenon wherein more people are employed than actually needed. Usually, this has been witnessed in developing economies and more so in labour- intensive economies. Disguised unemployment in India is mainly related to agricultural sector in rural areas.

Unemployment Types include structural unemployment caused by industry changes, cyclical unemployment due to economic downturns, frictional unemployment during job transitions, seasonal unemployment in specific industries, and disguised unemployment in underutilised labour.

Involuntary Unemployment: This represents a scenario where individuals actively seek jobs but cannot find any due to the excess labour supply. For Example, Fresh graduates in urban areas struggle to secure employment despite multiple applications.
Voluntary Unemployment: This occurs when individuals choose not to work despite job availability, often due to dissatisfaction with pay, job quality, or dignity concerns. For Example, A highly qualified engineer refusing a low-paying customer service job.
Structural Unemployment: Results from changes in the economy, creating mismatches between job requirements and workforce skills. For Example, Factory workers lose jobs due to automation in manufacturing industries.
Seasonal Unemployment: Affects workers in industries with seasonal demand, leading to temporary joblessness during off-seasons. For Example, Tourist guides and hotel staff face unemployment during the off-peak travel season.
Cyclical Unemployment: This occurs due to economic downturns when businesses lay off workers during recessions but rehire them during recovery phases. For Example Layoffs in the retail sector during economic slumps due to reduced consumer spending.
Disguised Unemployment: Found in sectors where excess workers contribute little or no additional productivity. For Example, Multiple interns in an office duplicate tasks that do not add value to operations.
Frictional Unemployment: Temporary unemployment during job transitions, as individuals leave one job to search for another. For example, A software developer quit to find a better role in a different company.

49. The number of persons who remained unemployed for a major part of the year is called: [U.P.P.C.S. (Pre) 2019]

(a) Usual status unemployment
(b) Daily status unemployment
(c) Weekly status unemployment
(d) None of the above

Correct Answer: (a) Usual status unemployment

Solution:The Usual Status approach to measure unemployment uses a reference period of 365 days i.e. one year preceding the date of the survey of NSSO (Now NSO) for measuring unemployment and the number of persons who remained unemployed for a major part of the year is called Usual Status Unemployment. Thus, the estimates of unemployment obtained on the basis of Usual Status approach are expected to capture long-term open unemployment.

50. Which of the following method is not used by N.S.S.O. for the measurement of unemployment in India? [U.P.P.C.S. (Mains) 2005, U.P.P.C.S. (Mains) 2016]

(a) Usual Principal Status
(b) Current Monthly Status
(c) Current Weekly Status
(d) Current Daily Status

Correct Answer: (b) Current Monthly Status

Solution:In National Sample Survey (NSS) on employment and unemployment in India, persons are classified into various activity categories on the basis of activities pursued by them during certain specified reference periods. Three reference periods are used in NSS surveys, viz. (i) one year, (ii) one week, and (iii) each day of the reference week.

Based on these three periods, three different measures of activity status are arrived at. The activity status determined on the basis of the reference period of one year is known as the usual principal status or usual activity status (US) of a person, that determined on the basis of a reference period of one week is known as the current weekly status (CWS) of the person and the activity status determined on the basis of the engagement on each day during the reference week is known as the current daily status (CDS) of the person.

Poverty & Unemployment (Part – I)

41. Employment growth in the organized sector in India during the period between 1994 and 2007 has: [U.P.P.C.S. (Spl.) (Mains) 2008]

42. Most of the unemployment in India is: [Uttarakhand P.C.S. (Pre) 2010]

43. Disguised unemployment means: [J.P.S.C. (Pre) 2016]

44. Disguised unemployment refers to: [U.P.P.C.S. (Mains) 2004, U.P.P.C.S.(Spl.) (Mains) 2008, U.P.P.S.C.(GIC) 2010]

45. Disguised unemployment generally means: [I.A.S. (Pre) 2013]

46. In India disguised unemployment in main characteristic of: [U.P. Lower Sub. (Pre) 2004]

47. In India disguised unemployment is found in: [U.P.P.C.S. (Mains) 2006]

48. Disguised unemployment in India is mainly related to: [U.P.P.C.S. (Mains) 2017]

49. The number of persons who remained unemployed for a major part of the year is called: [U.P.P.C.S. (Pre) 2019]

50. Which of the following method is not used by N.S.S.O. for the measurement of unemployment in India? [U.P.P.C.S. (Mains) 2005, U.P.P.C.S. (Mains) 2016]

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