The high percentage of cultivators in rural India signifies which structural problem?
Show answer & explanation
Correct answer: A
Explanation
Solution: The correct answer is Disguised unemployment.
Explanation:
☛ Disguised unemployment refers to a situation where more people are employed in an activity than are actually needed.
☛ In rural India, a very high percentage of the workforce is engaged in farming and allied activities, where the marginal productivity of labour is zero or near zero.
☛ Even if several workers are withdrawn from agricultural fields, the total production of crops remains unchanged.
☛ This surplus labour indicates severe underemployment and structural weakness in generating non-farm rural livelihood opportunities.
Extra Exam-Relevant Facts:
☛ Seasonal Unemployment: A common rural phenomenon where farm labourers find work only during specific farming seasons (sowing and harvesting) and remain idle for the rest of the year.
☛ Structural Unemployment: Occurs when there is a mismatch between the skills possessed by the unemployed population and the skills demanded by available jobs.
☛ Frictional Unemployment: A temporary form of unemployment that occurs when an individual leaves one job to search for another.
☛ Cyclical Unemployment: Caused by economic recessions or a downturn in the overall business cycle.
Important One-Liners for Upcoming Exams:
☛ In which type of unemployment is the marginal productivity of labour equal to zero? → Disguised unemployment
☛ Which economic sector in India has the highest prevalence of disguised unemployment? → Agriculture sector
☛ Which organisation conducts the Periodic Labour Force Survey (PLFS) in India? → National Statistical Office (NSO)
☛ What term describes unemployment that exists due to the time gap in finding a new job? → Frictional unemployment
☛ Which law describes the relationship between the unemployment rate and economic growth rate? → Okun's Law