Economics · Ch 14 — Employment: Growth, Informalisation and Other Issues
Government and Employment Generation
Government and Employment Generation
The government's role in creating jobs
Since independence the Union and State governments have played a major part in generating employment and creating opportunities for it. A well-known example is the Mahatma Gandhi National Rural Employment Guarantee Act 2005, which promises 100 days of guaranteed wage employment to every rural household whose members volunteer for unskilled manual work.
Drawn by us to help you understand the concept clearly, and verified to make sure it's accurate. For exams, practice from your textbook's own diagram.
Own-drawn recreation of NCERT Fig 6.7 (book p.108) — the real book prints this one as a line drawing too, not a photograph, so our own-art line-art recreation matches the book's own st …
Government efforts can be grouped into two broad kinds — direct and indirect.
Direct employment generation
The government employs people directly in its various departments for administrative work, and it also runs industries, hotels and transport companies, thereby providing jobs to workers. For instance, when a government-owned steel company raises its output, employment in that company rises directly.
Indirect employment generation
When government enterprises increase their output, private firms that buy raw materials from them — such as the private companies purchasing steel — will also expand their own production and hire more workers. This ripple effect is the indirect generation of employment.
Employment generation programmes …