Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Employment - Growth, Informalisation and Other Issues

Question:

Read the given case study and answer the following questions :

Agriculture is the primary occupation in rural India. It can't provide work to the rural population of the country throughout the year. In absence of multiple cropping & diversification of agricultural activities, a large population remains idle for almost half a year.

Indian is also suffering from disguised unemployment due to excessive pressure of population. In disguised unemployment it seems that everyone is employed but in reality, sufficient full time work is not available for all.

Unemployment problem in India is the result of inadequate employment planning, slow growth rate, backwardness in agriculture and industrial sector, population explosion etc.

Government should try to support skill and retraining activities to address the gaps between demand and supply of work skills and qualifications. Problem of unemployment is leading to fatal results for the economy and restricting India's growth rate.

In disguised unemployment, people are-

Options:

Underemployed

Overemployed

Voluntarily Unemployment

Seeing Employment

Correct Answer:

Underemployed

Explanation:

The correct answer is option (1) : Underemployed

Disguised unemployment is a situation where more people are engaged in an activity than are actually required. Even if some of these people are removed, the total production (output) remains the same.

  • Why they are "Underemployed": Although these individuals appear to be working, their marginal productivity is zero. This means they are not working to their full capacity or their contribution isn't adding anything extra to the total work.

  • Context in the Case Study: The text mentions that "it seems that everyone is employed but in reality, sufficient full-time work is not available for all." This lack of full-time utilization of labor is a classic definition of underemployment.

Other Options: 

  • Overemployed: This refers to people working more hours than they desire; it is the opposite of the situation described.

  • Voluntarily Unemployment: This occurs when people choose not to work at the prevailing wage rate. In disguised unemployment, people want to work and think they are working.

  • Seeking Employment: This usually refers to open unemployment where people are actively looking for jobs because they are visibly out of work.