CAUSES OF UNEMPLOYMENT IN INDIA

· CAUSES OF UNEMPLOYMENT IN INDIA



1) Excessive population growth :

· Population growth is the most important factors responsible for the employment problem in the country.

· Population of India was 36.2 cores in 1951 when planning started in India.

· According to the latest census conducted in the country the population is about 102 corers. With the population there is a corresponding increase in the lab our supply.



2) Low economic growth :



· The other fundamental reason for unemployment in India is the economic growth in India during the plan period.

· During the period 1951 to 1997-1998 the average growth rate has been around 4%

· Actually we need 7% growth rate for providing employment to the constantly increasing lab our force.

· We can see that the growth is almost half than the required rate.

3) Heavy industry model :



· The 2nd five year plan onwards we have adopted heavy industry model recommended by Dr.MAHALNOBIS with the objective of promoting the growth of heavy industry in the country.

· These industries are highly capital – intensive industry.

· Their unemployment generation capacity per unit capital is highly limited and there for in spite of continuous increasing no. of productive enterprises both in public as well as private sector.



4) Faulty education system:



· Faulty education system is one more reason particularly responsible for the educated unemployment country.



· It provide only liberal education with every year produced a large no. of just literate people.



· However this people do not have any worth while training and vocational qualification if not possible to employee this people in any productive activity.







5) Absence of man power planning:



· This is short term as well as long term planning for archiving equilibrium between demand for supply of education and trend human resource.



· These types of planning have never been serious components of our five year plans.

· There for in India while on one hand millions of people who are illiterate UN trained and having only formal education are searching for job.



6) Modern technology in agriculture:



· While the introduction of new technology in agricultural the problem of rural unemployment has become quite serious.



· This new technology favors’ the use of labors saving Machines like tractor, harvesters, electric pumps and motors etc.













7)Industrial sickness :



· The industrial sickness is fast spreading into all

Industries large and small, private and public sectors.



· The problem is all the more serious in small industries which are generally employments generating?



8)Destruction of cottage industries :



· The cottage industries like furniture, cobbles, handloom etc, have been a major source of employment for the rural population.



· Now these industries are fast disappearing due to rapid growth of modern industries, which provide better and cheaper goods.



9)Inadequate irrigation :



· In India 64% of total agriculture land is without any irrigation.



· Millions of people in India remain unemployed in non monsoon seasons.







10) Poor infrastructure :



· Once of the factored responsible for unemployment is the poor quality of our infrastructure like road, railways, electricity etc.



· The lack of these facilities has restricted growth of industries in many sectors and has not allowed employment opportunities to increase.



11) Poor management of economy :



· Due to a variety of factors we have not been able to manage our economy property.



· The Indian industries and particularly the public sectors industries are having west unused production capacities.

Impact of Global Economy

http://globaleconomy7.blogspot.in/2014/02/impact-of-global-economy-is-inevitable.html

Mutual fund

Mutual fund

Ø  Mutual fund is a financial intermediary that pools the savings of investors for collective investment in a diversified portfolio of securities.

Ø  The SEBI (Mutual Fund) Regulations, 1996 defines mutual fund as a “ a fund established in the form of a trust to raise money through the sale of units to the public.

Ø  MF serves as a link between the investor and the securities market by mobilizing savings from the investors and investing them in the securities market to generate returns.

Ø  The basic objective of mutual fund is to provide continuous liquidity and higher yields

Benefits of Mutual Fund

Ø  Professional Management

Ø  Portfolio Diversification

Ø  Reduction in transaction cost

Ø  Liquidity

Ø  Convenience

Ø  Flexibility

Ø  Tax benefits

Ø  Transparency

Ø  Equity Research

Types of Mutual Fund Schemes

•       Open-ended Fund / Scheme

Ø  An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis.

Ø  These schemes do not have a fixed maturity period. The number of units outstanding goes up or down every time, the fund issues new units or repurchasing existing units. This means, the unit capital of an open-ended mutul fund is not fixed but its variable.

Ø  Not listed in the stock exchange

Ø  Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

•       Close-ended Fund / Scheme

Ø  A close-ended fund or scheme has a stipulated maturity period.

Ø  Realization is possible at the end of maturity

Ø  In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices.

Ø   SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Ø  And unit capital of a close-ended fund is fixed, because it makes a one time sale of a fixed number of units.

•       Growth / Equity Oriented Schemes

Ø  The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities.

Ø  Such funds have comparatively high risks.

Ø  These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences.

Ø  The mutual funds also allow the investors to change the options at a later date.

Ø  Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

•       Income/ Debt Oriented Schemes

Ø  The aim of income funds is to provide regular and steady income to investors.

Ø  Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments.

Ø  Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds.

Ø  The NAVs of such funds are affected because of change in the domestic interest rates. However, long term investors may not bother about these fluctuations.

EXPLAIN THE CONCEPT OF EXCESS CAPACITY & WASTE IN MONOPOLISTIC COMPETITION

v  

EXPLAIN THE CONCEPT OF EXCESS CAPACITY & WASTE IN MONOPOLISTIC COMPETITION

§  DEFINATION OF WASTE.

§  EXAMPLE OF WASTE.

§  ACCORDING TO DIFFERENT PROFFSSORS.

§  CAUSES.

§  REASONS.

§  DIAGRAMS.

§  ANALYSIS.

DEFINATION OF WASTE

                                    “Waste means whatever extra quantity which is left over and unutilized by producer.”

EXAMPLE OF WASTE

                           Molasses left over after sugarcane is used.

                           Food left over after marriage function is over.

ACCORDING TO DIFFERENT PROFESSORS

1)      PROFESSOR MEADE

                                    “The term ‘waste’ refers to waste of monopolistic & not prefect competition. Because in perfect competition hardly any waste takes place”.

2)      PROFESSOR ROTHSCHILD

There are 7 kinds of waste in Monopolistic market

                                                                               I.      Expense on competitive advertisement.

                                                                            II.      Expense on cross transport.

                                                                         III.      Failure in specialization.

                                                                         IV.      Excess capacity.

                                                                            V.      Existence of inefficient forms.

                                                                         VI.      Higher price & less output.

                                                                      VII.      Unemployment.

CAUSES

1)       As demand curve is perfectly inelastic and average cost is decreasing, there is less use of resources.

2)      Present Firms who is get maximum short run profit, has to divide its profit with new entrance of firms. Thus, in long run, each firm will have to make less production, which leaders to excess capacity of production

EXM: T.V, clothes, etc…

REASONS FOR EXCESS CAPICITY

1)      In the perfect competition: under this competition, MC&AC are equal at equilibrium in long run. So, AC is at minimum. Therefore, resources are used at optimum manner.

2)      In Monopolistic Competition: there is AC more than AC at equilibrium in long-run. This means firm earns minimum Ac after equilibrium takes place. As a result, excess capacity takes place.

ANALYSIS

Ø  X-axis indicates output in units

Y-axis indicates revenue & cost.

Ø  In monopolistic competition, equilibrium takes place between OM and at equilibrium point.

Ø  MC cuts AR at B & cuts MR at E.

Ø  If a vertical line in drawn at E, then at firm earns MC equal to MR.

Ø  Hear, AR is equal to price curve but AC is higher than MC.

Ø  Here, AC of firm is Minimum at B point. Because at here AC interests MC& AC is minimum.

Ø  In perfect competition, AR & MR are equal, so no wastage is possible. But in monopolistic, firm get equilibrium at normal Profit, but MN capacity is still remain unutilized.

Ø  As factors production remains fully unutilized, at equilibrium point, full employment or max output cannot be achieved. Here, capacities of production remains excess & so products can be made at higher cost & there prices are kept quite high. Thus, wastage is created.

Ø  Prof. Hicks & Robertson believe that it is not a social waste because different classes of peoples get variety of products due to this. If there is excess capacity of production, in times of accidental rise in demand, supply of production can be increased without increasing proportion of fixed factors.

Ø  Here; at point A, cost is higher and profit is higher. But maximum utilization is not possible. So, it is not proper place for production for firm to produce goods at minimum cost & to earn maximum profit.

Ø  And at point B, Profit is not maximum and AC is at minimum, while resources are used at maximum. But if firm doesn’t get profit, how can a firm continue business or bear loss? So, its not proper point of production.

So, as per this, we can say:

                        “Excess capacity & wastage is seen in monopolistic competition.

Functions of World Bank

What are the Functions of World Bank?

World Bank performs the following functions:

(i) Granting reconstruction loans to war devastated countries.
(ii) Granting developmental loans to underdeveloped countries.
(iii) Providing loans to governments for agriculture, irrigation, power, transport, water supply, educations, health, etc
(iv) Providing loans to private concerns for specified projects.
(v) Promoting foreign investment by guaranteeing loans provided by other organisations.
(vi)Providing technical, economic and monetary advice to member countries for specific projects
(vii) Encouraging industrial development of underdeveloped countries by promoting eco­nomic reforms.