Give four suggestions to solve the …

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.