Unemployment is attributed to labour market deficiency in terms of shortage of skilled and educated labour force rather than to the deficiency of aggregate demand. This paper argues that an attempt to correct macro-policy distortion through micro interventions, would, in the skill hierarchy and job competition models, have the consequences of overcrowding, bumping down of low skilled workers and create rather a larger pool of surplus skilled as well as unskilled labour force. The demand constrained economy of India needs a better policy perspective for manpower planning.
