1. The employment policy must provide both fuller and more productive employment. For this, it must aim at higher levels of production through a proper combination of large volume of employment and higher labour productivity. In India employment and production should go together and support each other.
The ultimate solution of the unemployment in India lies in the growth of production. Here the measures for the growth of production should be implemented in such a way that they should be helpful in increasing the level of employment.
That is why for India those productivity raising programmes are not suitable which substitute machinery for labour, thus adding to unemployment problem. So we have to adopt labour intensive techniques for the increase in production in the various sectors of the economy.
Similarly, those employment programmes also are unsuitable for India which do not contribute to the growth of production in the country. India is not the country for employment generating programmes of “digging the holes and filling up these again” variety. Thus, in India growth of production is of crucial importance for the solution of the problem of unemployment.
2. To the above end employment policy must aim at higher rate of capital formation with a proper mix of employment generating and productivity raising investment. It must also seek to improve the response of output to capital formation (that is, a decline in incremental capital-output ratio).
3. Employment generation should be built into the normal process of development and should generally avoid inefficiently executed crash employment programmes.
4. In view of the great importance of self-employment, the system of comprehensive production assistance to farmers may be further strengthened and made more accessible to marginal and small farmers. The programme of assistance to the self-employed, engaged in non-agricultural activities, may also be suitably strengthened and made duly selective.
5. Emergence of serious inter-sectoral disproportions in the economy which have an adverse impact on employment in the affected sectors may be avoided through greater efficiency in planning and implementation.
6. Seasonal unemployment may be reduced to low levels by generating employment opportunities for labour rendered surplus in the agricultural slack season.
7. Technological unemployment may be kept down to the minimum by suitable retraining programmes for those who are affected by the technological changes.
8. Educated unemployed may be contained by accelerated all round industrialisation of the economy including modernisation of agriculture, and by an effective reform of the educational system.
9. A more efficient functioning of the Employment Exchanges may be ensured with a view to reduce the frictional unemployment to a minimum level.
10. Measures may be implemented for raising the employment opportunities for women in the organised sector.