The following points highlight the eight major problems faced by labour market in India. The problems are: 1. Surplus Labour Force 2. Unskilled Labour 3. Lack of Absorption of Skilled Labour 4. Imperfections 5. Work Culture 6. Militant Unionism 7. Unemployment 8. Lack of Labour Reforms.

Problem # 1. Surplus Labour Force:

Labour market in India is suffering from surplus labour force. A huge number of labourers are rendered surplus due to lack of adequate demand arising out of both primary, secondary and tertiary sector. Due to high rate of growth of population, a huge number of labour forces is continuously being added with the existing labour force leading to a huge surplus in the labour market.

Problem # 2. Unskilled Labour:

Another major problem of labour market in India is that there is a growing number of unskilled labourers in the country. In the absence of adequate vocational institutes, skill formation among the labour force in the country is very slow. This huge number of unskilled labourers fined it difficult to become self employed and thus create a huge army of unemployed in the country.

Problem # 3. Lack of Absorption of Skilled Labour:

In India the absorption rate of skilled labour force is also very poor. A huge number of technically educated youths after completing their technical education like engineering, vocational courses etc. are finding it difficult to get themselves absorbed in the secondary sector, leading to a huge problem educated unemployment in India.

Problem # 4. Imperfections:


Labour market in India is also suffering from some imperfections such as lack of adequate information regarding jobs, lack of suitable agency for the proper utilisation of labour force, child labour practices, lack of proper manpower planning etc. Such imperfections have been resulting in various hurdles in the path of absorption of labour force smoothly.

Problem # 5. Work Culture:

Work culture among the Indian labour force is not at all good. Whatever work force is absorbed in various productive sectors it is not adhered to healthy work culture. This has been resulting in lesser economic surplus in the production system which restricts indirectly its absorption capacity in future.

Problem # 6. Militant Unionism:

Labour market in India is also facing the problem of militant unionism. In some productive sectors and that too in some particular states, trade unions are not adhering to healthy practices. This has led to militancy in the union structure and its activities, which is detrimental for the greater interest of the nation.

Problem # 7. Unemployment:

Labour market is also facing a serious problem of unemployment. A huge number of work forces of our country remain partially or wholly unemployed throughout the year or some part of the season. This has led to the problems like disguised unemployment, seasonal unemployment, general unemployment and educated unemployment.


In the absence of adequate growth of employment avenues, unemployment problem in the country is gradually becoming much more alarming day by day.

Moreover, due to the policy of downsizing followed both in public and private sector and also in government administration and services sector, the problem of unemployment is becoming much more acute. This has also been putting much pressure on the labour market of the country.

Problem # 8. Lack of Labour Reforms:

Labour market in India is also suffering from lack of adequate labour reforms provision. Economic reforms introduced in the country during the 1990s have changed economic scenario of the country. But the country is lagging behind in adopting necessary labour reforms which are rational and important under the present context.

We have seen that the labour market in India has been suffering from the aforesaid serious problems. Thus the Government should chalk out proper policy for bringing necessary reforms in the labour market for the greater interest of the country as well as for the interest of labour force (both working and non-working) in general.