Upvote:2
I'm from India as well (got several schengen visas over the years). You haven't mentioned your age. If for e.g. you're 25 and unemployed, the Embassy might feel there is a chance of you staying back in the Schengen area, since you have no job to come back to.
Upvote:9
The Schengen countries try to welcome genuine tourists and refuse entry to illegal immigrants. They cannot know what a person will do in the future, so they must go by the documents.
Being unemployed does not lead to an automatic refusal. But it means that the rest of your application has to look good.
My guess is that the initial decision is correct according to the documents, and that an appeal will not help. In the EU it is entirely normal that official forms contain information how to appeal them, that does not mean an appeal is likely to work.
Follow-Up: When someone else pays for your trip, your account still has to show a stable lifestyle with regular income exceeding regular expenses. Even if that income is money from your parents (which is not uncommon for young people). If the money for the trip is a gift to you, you should be able to use it as you please, so it helps if you have it.