After witnessing a decline for five consecutive years, India’s unemployment rate stagnated at 3.2 per cent in the July-June 2023-24 period, reflecting a deterioration in labour markets, according to the latest annual Periodic Labour Force Survey (PLFS) report released by the National Statistical Office (NSO) on Monday.
This stagnation comes amid a swelling labour force in both urban and rural areas, indicating that the economy was not able to generate a commensurate number of jobs during the year.
Data showed that the unemployment rate in rural areas slightly increased to 2.5 per cent in the 2023-24 period from 2.4 per cent in the 2022-23 period. Meanwhile, the unemployment rate in urban areas declined to 5.1 per cent from 5.4 per cent during the same period.
Besides, the unemployment rate for women rose to 3.2 per cent in the 2023-24 period from 2.9 per cent in the 2022-23 period, while the jobless rate for males slightly declined to 3.2 per cent from 3.3 per cent during the same period.
The unemployment rate for a one-year period under the so-called “usual status” for persons aged 15 years and above saw stagnation for the first time since the annual survey was first launched in April 2017. Before the PLFS, the National Sample Survey Organisation (now known as NSO) used to release data related to employment and unemployment based on household socioeconomic surveys once every five years.
In the 2017-18 period, the unemployment rate at the all-India level stood at 6 per cent.
In usual status, employment is determined based on a reference period of 365 days preceding the date of the survey, as distinct from “employment status”, which is determined based on a reference period of seven days, known as the current weekly status (CWS) of the person.
The latest survey also showed a significant increase in the labour force participation rate (LFPR), which represents the share of people either working or seeking work in the population, to 60.1 per cent in the 2023-24 period from 57.9 per cent in the 2022-23 period at the national level.
The rural LFPR stood at 63.7 per cent, up significantly from 60.8 per cent in 2022-23, while its urban equivalent increased to 52 per cent from 50.4 per cent over the same period.
In terms of broad employment status, which gives an idea of the quality of employment, the share of people having regular or wage employment increased to 21.7 per cent in the 2023-24 period from 20.9 per cent in the 2022-23 period. On the other hand, the share of people engaged in self-employment, including unpaid household work or running a small business, also increased to 58.4 per cent from 57.3 per cent in the period under review.
Santosh Mehrotra, visiting professor at the University of Bath, says that labour markets are yet to recover as the share of wage employment is significantly and consistently lower than in the pre-pandemic period, leading to an increase in self-employed individuals. In 2018-19, wage employment accounted for 23.8 per cent of total employment.
“The corresponding increase in the labour force participation rate and the share of the self-employed shows that more and more people are joining the labour markets, and the economy isn’t able to generate enough decent jobs for them, which is leading them to engage as unpaid household help. In a way, the impact of reverse migration during the pandemic, which saw the addition of nearly 50 million people to agriculture, is yet to be overcome,” he added.
First Published: Sep 23 2024 | 8:13 PM IST
