India Records Lowest Unemployment Rate in Six Years

India’s unemployment rate for individuals aged 15 years and above has reached a six-year low at 3.2%, according to the Periodic Labour Force Survey Annual Report 2022-2023 released by the National Sample Survey Office (NSSO). This significant decline in joblessness signifies a positive trend in employment opportunities within the country.

Defining Unemployment Rate

The unemployment rate, often referred to as the joblessness rate, is a measure of the percentage of unemployed individuals in the labor force. It provides critical insights into the employment landscape of a nation.

Periodic Labour Force Survey (PLFS)

To ensure more frequent and timely availability of labor force data, the NSSO initiated the Periodic Labour Force Survey (PLFS) in April 2017. This survey collects comprehensive data on employment and unemployment trends in India.

Noteworthy Decrease in Unemployment Rate

The reference period for the latest data spans from July 2022 to June 2023. During this period, the Unemployment Rate (UR) for individuals aged 15 and above at the national level decreased to 3.2%. This marks a significant drop from the 4.1% recorded in the previous year (2021-22).

A Downward Trend in Recent Years

The data from PLFS reveals a downward trajectory in the unemployment rate over the years:

• UR was 4.2% in 2020-21.
• UR was 4.8% in 2019-20.
• UR was 5.8% in 2018-19.
• UR was 6% in 2017-18.

The PLFS report uses the “usual status” to determine a person’s employment status based on the preceding 365 days before the survey date.

Rural and Urban Trends

The data indicates that unemployment rates have also decreased in both rural and urban areas:

• Rural UR decreased from 5.3% in 2017-18 to 2.4% in 2022-23.
• Urban UR decreased from 7.7% to 5.4% during the same period.

Moreover, the UR for males in India fell from 6.1% in 2017-18 to 3.3% in 2022-23, while the corresponding decrease for females was from 5.6% to 2.9%.

Labor Force Participation Rate and Worker Population Ratio

In addition to the decline in unemployment rates, the Labor Force Participation Rate (LFPR) and Worker Population Ratio (WPR) have shown positive trends. LFPR, defined as the percentage of people in the labor force, increased from 49.8% in 2017-18 to 57.9% in 2022-23. WPR, which measures the percentage of employed persons in the population, rose from 46.8% in 2017-18 to 56% in 2022-23.

Regional and Gender Trends

These trends are not uniform across regions and genders:

• Rural LFPR increased from 50.7% in 2017-18 to 60.8% in 2022-23.
• Urban LFPR increased from 47.6% to 50.4% during the same period.
• The LFPR for males increased from 75.8% in 2017-18 to 78.5% in 2022-23.
• The LFPR for females increased from 23.3% to 37.0%.

A Comprehensive View of Employment Trends

The Periodic Labour Force Survey provides a comprehensive view of employment and unemployment trends in India, enabling policymakers and researchers to make informed decisions. The sixth Annual Report, covering the period from July 2022 to June 2023, underscores the importance of timely and accurate labor force data for assessing the country’s employment landscape.