After 5 yrs of decline, India's unemployment rate stuck at 3.2%

India's unemployment rate stagnated at 3.2% from July 2023 to June 2024, after five years of consecutive decline, according to the latest Periodic Labour Force Survey (PLFS) data released by the Ministry of Statistics & Programme Implementation.

The data reveals that despite the growing labour force in both urban and rural areas, the economy struggled to generate enough jobs, indicating a slowdown in labour market improvements.

The labour force participation rate (LFPR) for individuals aged 15 and above increased to 60.1% in 2023-24 from 57.9% in 2022-23. Female LFPR rose from 37.0% to 41.7%, while male LFPR slightly increased from 78.5% to 78.8%. The Labour Force Participation Rate refers to the percentage of the population working or actively seeking work.

The survey covered 1.02 lakh households, with 54.7% from rural areas and 45.2% from urban areas, encompassing a total of 4.18 lakh individuals.

The female unemployment rate rose to 3.2% in 2023-24 from 2.9% in 2022-23, marking its first increase in seven years. Meanwhile, the male unemployment rate slightly declined from 3.3% to 3.2%. Rural unemployment increased to 2.5% from 2.4%, while urban unemployment decreased to 5.1% from 5.4% during the same period. The unemployment rate is the percentage of unemployed individuals within the labour force.

Meanwhile, the worker-population ratio (WPR) indicates the percentage of employed individuals in the population rose to 58.2% in 2023-24 for those aged 15 and above from 56% in 2022-23, primarily on the back of higher workforce population growth rates in females.

The data on employment and unemployment indicators in India is produced from the Periodic Labour Force Survey (PLFS), conducted by the Ministry of Statistics and Programme Implementation since 2017-18. Before the PLFS, the National Statistical Office (NSO) conducted quinquennial Employment and Unemployment surveys.

The jobless rate among educated individuals aged 15 and older was 7.1%, with urban-educated individuals facing a rate of 7.9% and rural-educated individuals at 6.5%. This category includes those whose highest level of education was secondary school or above. 

For youth aged 15-29 in India, the unemployment rate was 10.2%. Urban female youth experienced the highest unemployment rate at 20.1%, while urban male youth had a rate of 12.8%. In rural areas, male youth unemployment was 8.7%, and female youth unemployment was 8.2%.

The highest percentage distribution of workers in usual status by broad industry division was in agriculture, comprising approximately 46.1% of the workforce. This was followed by trade, hotels, and restaurants, which employed over 12.2% of workers, construction at 12%, and other services at 11.9%.

Among India's 36 states and UTs, 61% reported unemployment rates higher than the national average. Lakshadweep had the highest unemployment at 11.9%, while Madhya Pradesh recorded the lowest at 1%.