India's urban jobless rate eases to 6.5% in Q3FY24, shows PLFS data

The jobless rate in urban areas has been steadily declining since the high of 12.6 per cent recorded in the COVID-affected April-June quarter of FY22

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Shiva Rajora New Delhi

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The jobless rate in urban India marginally declined further in Q3 (October-December) of FY24 to 6.5 per cent from 6.6 per cent in the preceding quarter, thus reflecting continued improvement in the labour markets, the Periodic Labour Force Survey (PLFS) data, released by the National Statistical Office, on Monday showed.

The jobless rate in urban areas has been steadily declining since the high of 12.6 per cent recorded in the Covid-affected April-June quarter of FY22.

This unemployment rate in current weekly status (CWS) terms for those above 15 in the December quarter is the lowest recorded in five years since the time the NSO began releasing India’s quarterly urban jobless rate in December 2018.

While the unemployment rate among women stagnated at 8.6 per cent during the quarter, the jobless rate among men declined to 5.8 per cent from 6 per cent in the previous quarter. These figures have also been declining since the June quarter of FY22, when they were estimated at 12.2 per cent and 14.3 per cent, respectively.

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The unemployment rate for the young (15-29) declined sharply to 16.5 per cent in Q3 from 17.3 per cent in Q2.

It is important because people belonging to this age group are usually first-timers in the labour market and this metric reflects its robustness.

The latest quarterly survey also showed the labour force participation rate (LFPR), which represents the percentage of people either working or seeking work in urban areas, saw a marginal increase to 49.9 per cent in the December quarter from 49.3 per cent in the September quarter. Both men and women showed greater enthusiasm for work during the quarter as their LFPR increased to 74.1 per cent and 25 per cent from 73.8 per cent and 24 per cent, respectively.

This increased enthusiasm for work translated into better jobs for both men and women as the share in salaried jobs rose to 47.3 per cent and 53 per cent, respectively, in the December quarter from 47 per cent and 52.8 per cent, respectively, in the previous quarter. A large number found work as self-employed, which includes being unpaid helpers in household enterprises or owning an enterprise. The share of self-employment in urban areas increased to 40.6 per cent in Q3 from 40.4 per cent in Q2.

Labour economists, however, distinguish between the two and generally consider wage/salaried employment a better form of employment.

The share of workers in the tertiary sector, which is the biggest employer in urban areas, rose to 62 per cent in Q3 from 61.5 per cent in the previous quarter. Meanwhile, the share of workers in the secondary (manufacturing) sector declined to 32.1 per cent from 32.4 during this time period.

Given the importance of having labour force data available at frequent intervals, the NSO launched India’s first computer-based survey to measure labour force participation dynamics at three-month intervals for urban areas in April 2017. Before the PLFS, the National Sample Survey Organisation (now known as NSO), under the Ministry of Statistics and Programme Implementation, used to bring data related to employment and unemployment based on household socioeconomic surveys once in five years.

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First Published: Feb 12 2024 | 9:31 PM IST

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