Unemployment and poverty are the two major problems that are faced by the world economy at present. Unemployment leads to a financial crisis and reduces the overall economy of a country. This in turn results in poverty followed by the increasing pressure of debt. Now, poverty can be described in several ways. As per the World Bank definition, poverty implies a financial condition where people are unable to maintain the minimum standard of living. Poverty is of different types like absolute poverty and relative poverty. Whatever be the type of poverty, the basic reason has always been the lack of sufficient income. Here comes the role of unemployment behind poverty. Lack of employment opportunities and the significant income difference bring about mass poverty in most of the developing and underdeveloped economies of the world. Lack of demand for labour is one of the principal reasons for unemployment. In the less developed economies, a significant portion of the total workforce works as additional labour. This problem is especially prevalent in the agricultural sector. Due to excess labour, the marginal productivity of the workforce may be zero. This excessive number of labour and advance in machinery reduced employment in the major production sector as well. Unemployment and poverty are most common in less developed economies. However, due to the global economic crisis and Covid 19 pandemic, the developed countries are also facing these challenges in recent times.
In India, the problems of unemployment and poverty have always been a major drawback to economic development. Unemployment has disabled the Indian economy from time to time. Even during the period of good harvest, the Indian farmers are not employed for the entire year. The excessive population is another major problem as far as the Indian economy is concerned. The regional difference is also crucial in this context. A part of the urban workforce in India is subjected to sub-employment. Mass migration from rural to urban regions is adding to the problems of unemployment and poverty in India.
To cure Unemployment and Poverty in India or any other underdeveloped countries there are various methods. Economic reforms, changes in the industrial policy and better utilisation of available resources are expected to reduce the problem of unemployment and poverty that results from it. The economic reform measures need to have major impacts on the employment creating potential of the country. The governmental bodies are also required to initiate long term measures for poverty reduction. Generation of employment opportunities and equality in income distribution are the two key factors that are of utmost importance to deal with the dual problem of unemployment and poverty. If employment is provided to the youth and the passing graduate than not only the problem of unemployment will reduce but the problem of poverty will also decrease. The government of the country must bring out certain programs and schemes to provide employment and consider it as a topmost priority.
BY- ARVIND PANDA