ECONOMIC AND LEGAL IMPACT OF RURAL

UNEMPLOYMENT
Introduction:
Economic growth of a country depends upon the skills of its people and the application of
knowledge, inherited or acquired by them. Optimum utilisation of human resources undoubtedly
leads to considerable degree of economic development of a country. Unemployed human
resources signify that a section of the society is without any source of income. Hence they
experience misery and starvation.Generally unemployment means an economic active person
without any employment. According to Karl Pibram, Unemployment is a condition of the
labour market in which the supply of labour power is greater than the number of available
openings.Unemployment in India is structural in nature. In other words, productive capacity is
inadequate to create a sufficient number of jobs. This is a chronic phenomenon.India is an
underdeveloped though a developing economy. The nature of unemployment, therefore, sharply
differs from the one that prevails in industrially advanced countries. Lord Keynes attributes the
cause of unemployment to a deficiency of effective demand. But in India unemployment is
mainly due to the shortage of capital, the poor exploitation of natural resources and inadequate
employment opportunities. That a large number of ruralites are forced to remain jobless in the
rural areas is true beyond dispute.The report states that the unemployment rate is 1.7 per cent in
rural and 3.4 per cent in urban areas. In its previous report of 2013, unemployment rate was 1.5
per cent in rural and 4.8 per cent in urban areas.India has a large number of unemployed people.
This is true of the rural as well as urban fields. In urban fields, there are a large number of
educated unemployed, and in the rural areas, this is true of all the categories of people. Per-capita
income in rural areas, this is true of all the categories of people. Per capita income in rural areas
and particularly those engaged in agriculture does not exceed a sum of Rs. 450 per annum.

Legal Aspect:
Rural Unemployment is rising due to discrimination on gender. There is no awareness in
rural areas about employment. Even due to rural unemployment people are not able to get wages.

These people at least should be paid minimum wages.In the further project it is discussed about
various legislations enacted for abolishing rural unemployment. MNREGA is Evolving the
design of the wage employment programmes to more effectively fight poverty, the Central
Government formulated the National Rural Employment Guarantee Act (MGNREGA) in 2005.
With its legal framework and rights-based approach, MGNREGA provides employment to those
who demand it and is a paradigm shift from earlier programmes. Notified on September 7, 2005,
MGNREGA aims at enhancing livelihood security by providing at least one hundred days of
guaranteed wage employment in a financial year to every rural household whose adult members
volunteer to do unskilled manual work. The Act covered 200 districts in its first phase,
implemented on February 2, 2006, and was extended to 130 additional districts in 2007- 2008.
All the remaining rural areas have been notified with effect from April 1, 2008.

Objective:
The objective of the study is to understand the various Economic and Legal Impacts on
Rural Unemployment.

Research Methodology:
The researcher undergoes with a non doctrinal research by referring to various materials,
articles, books, internet sources, newspapers, etc. related to legal and economic of rural
employment.

Research Questions:

What are the economic and legal impacts on rural unemployment?

What are the flaws in rural unemployment?

Hypothesis:
Rural unemployment is a basic problem in most of the countries, and even in India. There
are many impacts on rural unemployment. The major impacts are economic and legal impacts.
Due to these factors rural unemployment is increasing and there is parallel decreasing. These
factors are explained in detailed in further project.

Literature Review:
The research method obtained for this project is doctrinal research method. Researcher is
using the secondary sources like books, articles, journals and the data collected from the web to
do the research.

National Employment Guarantee Act, 2005:

The National Rural Employment Guarantee Act, (NREGA) was notified on September 7,
2005.The objective of the Act is to enhance livelihood security in rural areas by providing at
least 100 days of guaranteed wage employment in a financial year to every household whose
adult members volunteer to do unskilled manual work.

MNREGA:
An Act to provide for the enhancement of livelihood security of the households in
rural areas of the country by providing at least one hundred days of guaranteed wage
employment in every financial year to every household whose adult members volunteer
to do unskilled manual work and for matters connected therewith or incidental thereto.

Minimum Wages Act, 1948:

The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour
law that sets the minimum wages that must be paid to skilled and unskilled labours. The
Indian Constitution has defined a 'living wage' that is the level of income for a worker
which will ensure a basic standard of living including good health, dignity, comfort,
education and provide for any contingency. However, to keep in mind an industry's
capacity to pay the constitution has defined a fair wage. Fair wage is that level of wage
that not just maintains a level of employment, but seeks to increase it keeping in
perspective the industrys capacity to pay. To achieve this in its first session during

November 1948, the Central Advisory Council appointed a Tripartite Committee of Fair
Wage. This committee came up with the concept of Minimum Wages. A minimum
wage is such a wage that it not only guarantees bare subsistence and preserves efficiency
but also provides for education, medical requirements and some level of comfort. India
introduced the Minimum Wages Act in 1948.

Chapterisation:

Introduction to Economic and Legal Impact of Rural Unemployment.

Causes of Rural Unemployment

Economic Impact of Rural Unemployment.

Legal Impact of Rural Unemployment.

Findings, Analysis, Measures, Suggestions/Recomendations

Conclusion.

References:

http://labour.nic.in/sites/default/files/TheMinimumWagesAct1948.pdf
http://nrega.nic.in/amendments_2005_2016.pdf
http://muktsar.nic.in/drda/nrega.htm
http://www.yourarticlelibrary.com/unemployment/rural-unemployment-in-india-2921words/4820/

Name: Mani Kumar

Regd. No. : 2015068
Semester: 3rd