Q1. The high percentage of cultivators in rural India signifies which structural problem?
- (a) Disguised unemployment
- (b) Educational backwardness
- (c) Urban migration
- (d) Higher wages
Answer & solution
Answer: (a) Disguised unemployment
When far more people work a plot than the plot needs, the extra hands add nothing to output — their marginal productivity is zero — yet they appear employed.
Indian agriculture carries about 46 per cent of the workforce but produces only about 18 per cent of GVA; that gap is the signature of disguised unemployment.
Revision note — Types of unemployment
• Disguised (hidden): more workers than needed, marginal product zero; typical of rural agriculture and family enterprises.
• Seasonal: work exists only in certain months — sowing and harvesting, sugar mills, tourism.
• Structural: a mismatch between the skills available and the skills demanded, as when technology changes.
• Frictional: the short gap while moving between jobs; cyclical: caused by a downturn in demand, more common in industrial economies.
• Open unemployment is visible and counted; educated unemployment is high among graduates in India.
• The NSSO / PLFS measure unemployment by three yardsticks — Usual Status (365 days), Current Weekly Status (7 days) and Current Daily Status.
• Census 2011 counted 11.9 crore cultivators and 14.4 crore agricultural labourers; MGNREGA (2005) and diversification into agro-industry are the standard remedies.
Do not mix these up
• Disguised unemployment vs underemployment — underemployment means working below capacity (hours, skill or pay); disguised unemployment is its extreme case where the extra worker contributes nothing.
• Disguised vs seasonal — the disguised worker is surplus all year; the seasonal worker is idle only in the off-season.
Also asked from this topic: the sector where disguised unemployment is found (agriculture); its defining feature (marginal productivity of the extra worker = zero); working below capacity (underemployment).