"In rural areas of India, more members of a family are engaged in work, yet the gross income of the family is generally low." Identify the type of unemployment indicated in the above statement and explain the paradox associated with it. Explain the role of micro-credit system in meeting credit requirements of poor.

Question

Accepted Answer

The type of unemployment indicated is Disguised Unemployment.

Explanation:
1. More family members are engaged in work than required
2. The gross income of the family is generally low
3. Workers appear employed but add little to output
4. Marginal productivity of additional workers is zero or near zero

Characteristics:
1. Common in agricultural sector
2. Family members work on own farms
3. No formal employer-employee relationship
4. Workers are not paid wages
5. Productivity per worker is very low

Impact:
1. Underutilization of human resources
2. Low productivity and income
3. Poverty and poor living standards
4. Hinders economic development

Solution: Need for employment generation and skill development to absorb surplus labor into productive employment.