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Analyse the macroeconomic factors contributing to high unemployment rates in India. Is achieving employment goals contingent on a dedicated focus beyond rapid GDP growth? Comment

Syllabus: Indian Economy: Employment/Unemployment

 Q2. Analyse the macroeconomic factors contributing to high unemployment rates in India. Is achieving employment goals contingent on a dedicated focus beyond rapid GDP growth? Comment (250 Words)

 Difficulty level: Moderate

 Reference: ILO: India Employment Report

Why the question: The question addresses the complex issue of unemployment in India and challenges candidates to critically analyze the macroeconomic factors influencing high unemployment rates. The question is taken from the recently released ILO: India Employment Report 2024

Key Demand of the question: To analyze the macroeconomic factors contributing to high unemployment rates in India, assess whether achieving employment goals depends on factors beyond rapid GDP growth, and provide a comment on this issue.

Directive word: Analyse – When asked to ‘Analyse,’ candidates are required to examine the topic in detail, identify key factors, and provide a comprehensive understanding. They should critically assess the relationship between macroeconomic factors and unemployment rates and evaluate the role of GDP growth in achieving employment goals.

Structure of the Answer:

Introduction: Begin by acknowledging the significance of addressing high unemployment rates in India in light of ILO: India Employment Report 2024

Body: First, analyse the macroeconomic factors contributing to high unemployment rates in India. This may include factors such as population growth, technological advancements, labour market regulations, skill mismatches, and cyclical fluctuations in the economy.

Next, assess whether achieving employment goals depends on factors beyond rapid GDP growth. List down the limitations of relying solely on GDP growth as a measure of economic progress and employment generation. Consider the quality of growth, income distribution, and sectoral composition of the economy in relation to employment generation.

Provide examples of countries or regions where rapid GDP growth has not necessarily translated into significant improvements in employment opportunities or reductions in unemployment rates.

Highlight the importance of targeted policies and interventions to address structural challenges in the labour market, promote skill development, encourage entrepreneurship, and foster inclusive growth.

Conclusion:

Conclude by emphasizing the need for a multifaceted approach to addressing high unemployment rates in India, which goes beyond focusing solely on rapid GDP growth.