CBSE Class 11 Economics Indian Economic Development Revision Notes Chapter 7

CBSE Class 11 Indian Economic Development Revision Notes Chapter 7 – Employment: Growth, Informalisation and Other Issues

The subject matter experts at Extramarks have written the Class 11 Indian Economic Development Chapter 7 Notes, covering the important pointers from the chapter. The notes talk about various types of workers, the nature of employment, and the reasons behind various forms of unemployment. Students can easily access these Indian Economic Development class 11 Chapter 7 Notes from the website to understand the chapter effectively.

Worker

A worker is someone who makes a living by performing productive work.

Types of Workers:

1. Self-Employed: Individuals who work for themselves as owners and operators of a business are referred to as self-employed. Think about a farmer who owns a farm. This group comprises more than half of the workforce.
2. Hired Workers: Individuals employed by others and paid wages and salaries for their services are considered hired workers. The two categories of hired personnel are:

• Casual Workers: Casual workers are not regularly or permanently employed, are paid hourly or daily, and do not qualify for social security benefits.
• Regular Workers (Salaried): Regular Workers are regularly employed by a person or an organisation and receive their salaries regularly.

Economic Activity

It speaks of the work that people do to support themselves. The three main types of economic activity are consumption, production, and distribution.

1. Production Activity

It describes all the actions taken to produce goods and services to generate income.

1. Consumption Activity: 

A household’s use of goods and services is referred to as consumption. Macroeconomists frequently use consumption as a stand-in for the entire economy.

1. Distribution Activity

Distribution activities are currently responsible for tasks directly connected to the development, operation, and routine maintenance (aside from major overhauls) of substation equipment, overhead mains, underground cabling and jointing, pole inspection, street lighting, customer emergency services, and tree trimming and removal within minimum approach distances to energised conductors.

Labour Force

The labour force comprises everyone who is employed (has a job) and unemployed but is able and willing to work for the going wage.

Labour Force = People working + people seeking and/or available for work.

Labour Supply

It refers to the number of workers willing to accept a particular wage.

Work Force

The workforce is the total population actively working at any given time.

It includes everyone who is actively involved in productive endeavours. This includes those who fall within the 15–60 age range.

Work Force Participation Ratio (WPR)

• It is calculated as a country’s workforce ratio to its entire population.

WPR= Total number of workers ÷ No. of work population in India ×100

• It helps to ascertain the proportion of a nation’s people that actively contributes to producing goods and services.
• Approximately 35 percent of the workforce participates in metropolitan areas.
• Around 41 percent of the workforce in rural areas is involved.
• Men participate at 54.3 percent in metropolitan areas, while women do so at 13.8 percent.
• Men participate at a rate of 54.7 percent in rural areas, while women participate at a rate of 26.1 percent.
• Around 39.2 percent of the population participates overall in the country.

Employment In Firms, Factories And Offices

During a country’s economic development, labour moves from agriculture and other related sectors to industries and services. Part of this process involves the movement of workers from rural to urban areas.

We generally divide all production into the following industrial sectors:

The primary sector includes farming, forestry, and logging as well as washing, mining, and quarrying.

The secondary sector includes industries like manufacturing, construction, electricity, gas, and water delivery, to name a few.

The tertiary sector includes trade, transportation, storage, and services.

Jobless Growth

It is described as a situation where job prospects are limited by the economy’s growth, leading to unemployment.

1. Casualisation of Employment

The term “casualisation” refers to a situation where a growing proportion of employees are hired on a temporary basis. People begin working as temporary workers because there aren’t enough opportunities in the organised sector. Additionally, the flexibility in terms of working conditions and the general lack of enforcement of labour laws encourage companies to hire more temporary workers.

1. Informalisation of Employment

It refers to a situation where people are more likely to find employment in the informal than the formal sectors of the economy. Examples of informalisation include transitioning workers from permanent employment to casual and short-term contracts, outsourcing, and employment through labour brokers. Many people who have previously held formal employment will probably re-enter the workforce as non-typical employees.

Unemployment

It happens when someone is prepared and willing to work for the going pay rate but cannot find employment.

Unemployment Rate

It is computed out of a percentage of the labour force, not from a percentage of the total population. It is predicated on:

 Number of people unemployed ÷ Size of labour ×100 

Types of Unemployment

Rural Employment: Unemployment in rural areas is referred to as rural unemployment. The two are as follows:

• Seasonal Employment: Seasonal employment is a term used to describe a situation where many people cannot find employment during a particular season. Examples of industries include agriculture, ice cream manufacturing, woollen mills, and others.
• Disguised Employment: Disguised employment describes situations where the marginal physical productivity of labour is zero or negative.

Urban unemployment: This is the lack of employment in cities. Three categories exist:

• Industrial Unemployment: Illiterate job seekers in the mining, transportation, trade, and construction industries are included in this unemployment category.
• Educated Unemployment: In addition to open unemployment, many educated people are underemployed because their skills are incompatible with the available positions. The main causes of unemployment among educated young people in India are the country’s flawed educational system, mass production, preference for white-collar work, a lack of employable skills, and a decline in formal salaried employment.
• Technological Unemployment: An economy may experience structural unemployment due to technological advancements. One term for this unemployment is technological unemployment. As a result of new machinery, enhanced manufacturing processes, labour-saving technologies, and other factors, some workers are being replaced by machines.

Government and Employment Generation

The National Rural Employment Guarantee Act was approved by the parliament in 2005.

It provides all rural households who agree to conduct unskilled manual labour with 100 days of guaranteed paid employment.

This initiative is only one of the ones the government has implemented to help jobless individuals in rural areas find employment.

The federal and state governments have significantly created employment possibilities since the country’s independence.

Two categories of their efforts are as follows:

Direct Employment: In this situation, the government hires people to work in various departments for administrative tasks. Additionally, it owns and runs factories, hotels, and transportation businesses, all directly employing people.

Indirect Employment: As the output of goods and services produced by government-owned businesses rises, so will the output of private businesses that buy their raw materials from them, increasing the number of jobs available in the economy.

Employment: Growth, Information, and Other Issues Class 11 Notes

Work and employment are important aspects of our lives as individuals and as members of society. To be able to support themselves, many desire to start working. Only a tiny fraction of those who inherit or receive money did not put effort into earning it. This does not satisfy everyone. It is well known that having a job improves our sense of self-worth and enables us to communicate more expressively with others.

By engaging in various economic activities, which are the true definition of earning a living, every working person actively contributes to the national income and, consequently, the nation’s development.

When we work to provide for those who are reliant on us, like our family, we are not just working for ourselves; we also experience a sense of accomplishment. After appreciating the value of work, it is crucial to comprehend that education and training should place a high value on independence.

Studying the working class helps us understand and plan for our human resources by providing insights into the traits and nature of employment in India. We can use it to analyse how various industries and sectors affect national income. Studying the working class enables us to address multiple social issues, such as exploiting society’s disadvantaged groups.

Importance of Employment

Basic Concepts

Let’s first understand the basic concepts associated with employment, such as worker, labour force, and workforce.

Worker

A person who engages in economic activity to make money is a worker.

By performing productive tasks, a worker contributes to the GDP process.

Farmers, managers, labourers, doctors, barbers, academics, etc. are a few examples of workers.

Nature of Employment in India

India has a diverse range of employment opportunities. Some employees are paid throughout the year, while others are seasonal employees who are only paid for a few months each year. Some workers do not receive just compensation for their labour. On the other hand, everyone who partakes in economic activity is referred to as employed.

Labour Forc

All people looking for and available for work, regardless of their level of employment (high or low), are considered to be part of the labour force.

Individuals employed + individuals looking for or able to find work make up the labour force.

WorkForce

The people who engage in economic and non-economic activities are considered part of the workforce. Women who work from home carrying out household duties are included in the workforce.

Participation of People in Employment

The worker population ratio is used to assess the nation’s employment situation. It is calculated by multiplying by 100 after dividing the total number of workers between India by the total population.

Additionally, it conveys information about the workers’ social standing and working conditions. It is possible to assess the standard of employment in a nation by comprehending the status of the workforce.

Meaning of Employment

Employment is a task that gives a person a way to support themselves financially. It refers to a plan for how someone makes money or sustains their way of life. Jobs come in two varieties:

• Self Employment
• Wage Employment

Distribution of Employment in Different Sectors

Most workers in India are employed in the primary sector, which includes mining and other industries.

24.3 percent of the workforce is employed in secondary sectors like manufacturing, electricity, gas, water supply, and construction.

A total of 26.8 percent of workers are employed in the service sector.

Growth and Changing Structure of Employment

Over the past five decades, the county’s growth has consistently aimed to boost employment and the national product to expand the economy. India’s GDP increased exponentially over the past 50 years, However, employment growth began to slow down in the 1990s and dipped to a level where India was still in the planning stages. 

Jobless Growth

This phrase describes a scenario in which a nation’s economy can produce more goods and services without corresponding increases in employment opportunities.

Casualisation of Workforce

The transition from independent business ownership and regular salaried employment to hourly wage work is known as the casualisation of the workforce.

Informalisation of the Indian WorkForce

This is when someone switches from the formal to the informal sector of the workforce, which causes the formal sector’s share of the workforce to decline while the informal sector’s share of the workforce grows simultaneously.

Meaning of Unemployment

Unemployed people are willing and able to work for the going wage but cannot obtain a job. It affects both skilled and unskilled individuals who are out of work for protracted periods.

Types of Unemployment in India

Disguised Unemployment

When there are more employees than are needed for a position, this is known as disguised unemployment.

Seasonal Unemployment

This is known as seasonal unemployment when employed for only a few months out of the year and unemployed for the remaining months.

Open Unemployment

Open unemployment is a phenomenon in the economy where people are able and willing to work at the going pay rate but cannot find employment. It is known as “open unemployment” because the number of unemployed people can be seen and counted in this situation.

Industrial Unemployment

Illiterate people who want to work in the industrial sector are considered unemployed. The country’s industrial unemployment rate rises as more workers relocate from rural to urban areas.

Educated Unemployment

When a person is unemployed or unemployed, they are said to suffer from educated unemployment. Although there has been a sharp increase in the number of educated people in India, few employment opportunities have been created.

Structural Unemployment

When the demand for certain jobs and the supply of unskilled workers are incompatible, it is said that there is structural unemployment.

Causes of Unemployment

Numerous factors contribute to India’s high unemployment rate. As follows:

• Slow rate of economic growth
• Population explosion
• Underdeveloped agriculture
• Defective educational system
• Slow growth of industry
• The decline of cottage and small-scale industries
• Faulty planning
• Low capital formation

Remedial Measures for Unemployment

The following actions can be taken to address the issue of unemployment in India:

1. Accelerating growth rate of GDP
2. Control of population growth
3. Development of the agricultural sector
4. Encouragement of small-scale industries
5. Improvements in infrastructure
6. Special employment programs
7. Improvement of employment exchanges
8. Creation of self-employment opportunities
9. Reform of the educational system
10. Manpower planning

Government Policies and Employment Generation

The Indian government is working to create both indirect and direct employment opportunities for unemployed people.

Numerous self-employment initiatives, such as Swarnajayanti Gram Swarozgar and Swarnajayanti Shahari Rozgar, aim to give self-help individuals financial support and generate employment opportunities.

Conclusion

With the growth of the service sector and the introduction of new technologies, India’s workforce composition has changed. Although the GDP has grown significantly over the last 20 years, there haven’t been many job opportunities created. The government is making many efforts to create job opportunities, particularly in rural areas.