Give suggestions to solve the problem of unemployment in India.

Following are some important suggestions to solve the problem of unemployment in India:

(i) Increase in Production : To increase employment, it is essential to increase production in agriculture and industrial sectors. Development of small and cottage industries should be encouraged. Foreign trade should be encouraged and production of industries, minerals and plantation should be accelerated. Greater the production, greater is the demand for labour.

(ii) Increase in Productivity : Demand for labour is directly related to the productivity of labour. Higher productivity generates higher profits and therefore, greater demand for labour. Accordingly, productivity (implying efficiency) of labour must improve.

(iii) High Rate of Capital Formation : Rate of capital formation in the country should be accelerated. Capital formation should be particularly encouraged in such activities which generate greater employment opportunities. Capital-output ratio should be kept low. These days it is 3:6. It means, to produce goods worth Re. 1, capital worth Rs. 3.6 is invested. If capital-output ratio is high, then increase in the rate of capital formation will have very little effect on production and employment. It is, therefore, essential that along with increase in the rate of capital formation, there should be decrease in the capital-output ratio.

(iv) More Help to Self-employed Persons : Around 62 per cent of people in India are self-employed. Most of them are engaged in agriculture. Besides, they are also engaged in trade, cottage and small industries, building construction, restaurants, transport, etc. Government should provide facilities like irrigation, better seeds, manures, implements, credit, etc. to small and marginal farmers. In addition, self-employed persons in urban areas should be given facilities of credit, marketing, raw material, technical training and the like.

(v) Change in the Educational Patterns : There is urgent need to completely change educational policy in the country. Only such students be admitted to colleges and universities who have some definite objective to prosecute their studies. From the very beginning emphasis should be laid on vocational education. Educated persons must be inculcated with the spirit of serving in villages in the capacity of teachers, doctors etc. Qualified engineers should be given financial assistance to set up their own small units. Institutions providing employment information and guidance should be strengthened and their activities be properly coordinated with employment agencies.

(vi) Change in the Technique of Industrial Production : Technique of production should suit the needs and means of the country. It is essential that labour intensive technology is encouraged in the place of the capital-intensive technology. Quick yielding industries be given preference.

(vii) Cooperative Industries : Cooperative industries should be encouraged as far as possible. The Government of Kerala has set up a textile mill in which 600 unemployed persons contributed Rs. 500 each and rest of the capital was provided by the government. This indeed is a novel approach to the problem of unemployment. Different State Governments should initiate necessary steps in this direction.

(viii) More Importance to Employment Programmes in Plans : Under Plans such programmes should be given more importance which raise the level of employment. The programmes that can best serve this end are : irrigation, roads, flood-control, power, agriculture, forestry, rural electrification, soil conservation, development of small industries and construction works. Crash Employment programmes should not be encouraged, as these cause more wastage of resources without any corresponding increase in employment on the permanent basis.