(Different Steps Taken by Govt for Employee Generation)

Govt takes both Direct and Indirect Steps for Employment Generation:


Direct Steps

Govt employ people directly in government departments and PSU

Example - Lakhs of People are working in State Govt, Central Govt as well as Public Sector Companies like SBI, LIC


Indirect Steps

Example1 - Increase in Govt Spending

When Govt Increases Spending, it leads to Generation of jobs

When Govt increases its Spending (Example- Decides to make more roads)

It gives Work to Variety of Companies like Cement Companies and Labor Contractors

These employ more people to fulfill the order and hence Employment increases


Example 2 - Increase in Govt output

When Govt owned Enterprises increase their Output

Then Privately Owned enterprise also increase their Output

(Suppose a Govt Steel Making Company makes more steel,

then Private Companies who Purchase Steel to make steel products will also increase their production)

For Doing this, both govt as well as private sector will have to hire more workers

Hence, it is both Direct and Indirect Benefit

Role of Government in Employment Generation- Teachoo.JPG

Indirect Steps of Government in Employment Generation- Teachoo.JPG



Employment Generation Programmes

Government has also launched various Employment Generation Programmes like MNREGA

The purpose of these programmes is not only generation of employment

but also providing various welfare like

Development of Roads, Primary Health Clinic, Toilets, Drinking water etc


What is MNREGA Act 2005?

It means,

Mahatma Gandhi Rural Employment Guarantee Act 2005

It is a job guarantee scheme where govt guarantees 100 days wage Employment

to all rural households who volunteer to do unskilled work

Important Points

  • This scheme is for Rural areas (villages)
  • This scheme is for unskilled labour (manual work)
  • This scheme is a job guarantee scheme for 100 days


NCERT Questions

Question 20

You are residing in a village.

If you are asked to advice the village panchayat, what kinds of activities would you suggest for the improvement of your village which would also generate employment.

View Answer

Other Books

Question 1

The efforts of the government in generating employment can be broadly categorised into 2 aspects


View Answer
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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo