Department of Economics

This paper examines educational unemployment in Jammu and Kashmir with a focus on causes , consequences and remedies to curb the menace. It is our endeavor through this paper to highlight the main weaknesses of state economy responsible for chronic educated unemployment. In addition to this the present paper will focus on new innovative schemes on the part of state government to overhaul the existing economic system by which they can use the efficient human resource to gainful productive employment. The present paper will also focus on the industrial sector of the state of Jammu and Kashmir, both small as well as large scale and its potential to control educated unemployment and suggest measures and policies on the part of state government to establish the strong industrial base. Moreover, the paper will examine the major causes for the failure of state and centrally sponsored schemes to eradicate unemployment in the state of Jammu and Kashmir. It is examined that those who are less qualified i.e. Undergraduate or below but know the three R’s are better placed in terms of earnings than those who get higher education like post-graduation and above. The present paper will also study this trend and try to get into the details of this phenomenon so that reasons behind this hypothesis come to the surface.

Macroeconomic factors such as low inflation, export orientation and low labor taxes help to determine how much employment is created by growth. The relationship between growth and employment is strong and positive which gets enlightened when all macroeconomic policies work in harmony. Indian economy at the time of independence was mainly rural in nature and in a bad state. This was due to the anti-Indian policies of the British Government. The country was engulfed by the vicious circle of poverty and to break this vicious circle Government of India planned in a focused way. The emphasis shifted from agriculture to industry. Also emphasis was laid on increasing role of the state to generate employment and reduce poverty by appropriate macroeconomic policies. However, little was achieved till 1990's. So the path to long-run economic growth was ensured by introducing New Economic Policy in 1991, which aimed at reducing fiscal deficits, lowering inflation, maintaining exchange rate stability etc. One thing that was obvious was that under New Economic Policy, the public sector will have a diminished role and will be largely limited to social sectors and non-profit making activities unattractive to the private sector. These policy changes affected macroeconomic policies of the government. Despite these policy changes brought under the New Economic Policy, one feature that still remains an important feature of macroeconomic policies in India is that macroeconomic policies still continue to act more as the control devices rather than as development tools. As a result macroeconomic policies fail to generate additional employment. Macroeconomic policies need to be converted into tools for macroeconomic stabilization (Shah, 2008). There are various constraints in macroeconomic policies which refrain them to act as development tools and thereby increase unemployment levels in underdeveloped economies of the world. The present paper attempts to highlight such constraints and suggest remedial measures.