India's unemployment rate in 2023 dropped to 3.1%, shows NSO data

India’s unemployment rate dropped to 3.1 per cent in 2023 from 3.6 per cent in the preceding year, reflecting continued improvement in the labour markets, revealed the latest employment-unemployment indicators report released by the National Statistical Office (NSO) on Monday.

During the calendar year 2023 (CY23), the unemployment rate in both rural and urban areas declined to 2.4 per cent and 5.2 per cent, respectively, from 2.8 per cent and 5.9 per cent in 2022.

The unemployment rate for rural women (1.9 per cent) was lower than for rural men (2.7 per cent) in 2023, whereas in urban areas, the rate was higher for women (7.5 per cent) compared to men (4.4 per cent).

The unemployment rate under the so-called ‘usual status’ for persons aged 15 years and above during the one-year period shows a decline for the second consecutive year since 2021 when the NSO report started enlisting data on an annual basis.

Usually, the annual Periodic Labour Force Survey by the NSO collects data related to employment and unemployment status in the country between July and June.

In the latest NSO report, the labour force indicators for a calendar year have been obtained by combining the data of four quarters of the calendar year, as the samples of first-stage units canvassed during the period July of one year to June of the next are independently drawn for each quarter before the survey commences.

Since the quarterly samples are drawn independently, estimates of labour force indicators for a calendar year have been obtained by combining the data from the four quarters of the calendar year.

For example, the samples for the four quarters, namely, January–March, April-June, July–September, and October–December of the calendar year have been combined to produce the estimates of key labour market indicators for CY23.

In the ‘usual status’, employment is determined based on the reference period of 365 days preceding the date of the survey, as distinct from employment status determined on the basis of a reference period of seven days, known as the ‘current weekly status’ of the person.

The latest survey also showed that the labour force participation rate (LFPR), which defines the share of people either working or actively seeking work in the population, increased significantly to 59.8 per cent in 2023 from 56.1 per cent in 2022 at the national level.

The rural LFPR stood at 63.4 per cent in 2023, significantly up from 58.5 per cent in 2022, whereas its urban equivalent rose to 51.4 per cent from 50 per cent in the corresponding period.

Besides, the report also shows that the ratio of women workers to men working as legislators, senior officials, and managers stood at 14.4 per cent in 2023, whereas the ratio of women workers to men working as professionals and technical workers stood at 49.43 per cent during the year.