Unemployment or joblessness occurs when people are without work and actively seeking work. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force. According to International Labour Organization report, more than 6% people globally are out of work of the world’s workforce.

Classical economics and New classical economics argue that market mechanisms are reliable means of resolving unemployment or joblessness. These theories argue against interventions imposed on the labour market from the outside, such as unionisation, bureaucratic work rules, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers.

The main types of unemployment or joblessness include structural unemployment which focuses on structural problems in the economy and inefficiencies inherent in labour markets, including a mismatch between the supply and demand of labourers with necessary skill sets. Structural arguments emphasize causes and solutions related to disruptive technologies and globalization.

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Types of and theories of unemployment or joblessness, including cyclical or Keynesian unemployment, frictional unemployment, structural unemployment and classical unemployment.

High and persistent unemployment, in which economic inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment or joblessness can harm growth not only because it is a waste of resources, but also because it generates redistributive pressures and subsequent distortions, drives people to poverty, constrains liquidity limiting labour mobility, and erodes self-esteem promoting social dislocation, unrest, and conflict.

Unemployed individuals are unable to earn money to meet financial obligations. Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction. Unemployment or joblessness increases susceptibility to malnutrition, illness, mental stress, and loss of self-esteem, leading to depression.

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There is a trade-off between economic efficiency and unemployment or joblessness: if the frictionally unemployed accepted the first job they were offered, they would be likely to be operating at below their skill level, reducing the economy’s efficiency.

Social welfare programs benefits include unemployment insurance, unemployment compensation, welfare and subsidies to aid in retraining. The main goal of these programs is to alleviate short-term hardships and, more importantly, to allow workers more time to search for a job.

High unemployment or joblessness can also cause social problems such as crime; if people have less disposable income than before, it is very likely that crime levels within the economy will increase.

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Disinvestment, which is the dilution of the government’s stake in public sector units, is a policy pursued by the government for bridging the fiscal deficit, raising capital for expansion and growth, repayment of debt and also funding the government’s social welfare programs.

A comprehensive policy on public sector was set out in the Industrial Policy Statement of July 24, 1991 – the year when the country had to tide over an unprecedented economic crisis reflected in its internal and external finances. The steps adumbrated included a review of public sector investments to focus on strategic and essential infrastructure enterprises and new procedures to tackle chronically sick and loss-making units.

The Department of Disinvestment was set up as a separate department in December, 1999 and was later renamed as Ministry of Disinvestment from September, 2001. From May, 2004, the Department of Disinvestment became one of the Departments under the Ministry of Finance.

Disinvestment was conceived in the context not only of the acute financial stringency of the Government of India, which had to continually provide budgetary support to loss-making units, but also of the failure of public sector as a whole to provide a reasonable rate of return on the total investments.

The progress of disinvestment in India has been very slow, considering the strides in privatisation that developing countries in the East and South East Asia, Latin America and Central and Eastern Europe have made by transfer of productive assets to private investors, especially in infrastructure (power, telecommunications, oil and minerals) and financial services.

Disinvestment is good about India because of following reasons-.

• Government will generate funds spontaneously if needed.
• It will help poor in long run because government do disinvestment only in the hope of generating good returns which will be used for the improvement of the country in upcoming budgets.
• As private owners will run the business it will be helpful for the infrastructure also as India’s infrastructure is very much depends on private companies.
• New technology will be used which will reduce the wastage of resources, presently which is not there in government comp.

Disinvestment in PSUs would be a necessary boon in the present day fiscal deficit crisis which will also eventually suck excess liquidity from the economy thus check inflation. Further, the country can also meet the CAD if partially opened to FDIs thus support the depreciating Rupee. This will also help in good corporate governance and answer ability to stakeholders at large.