India’s unemployment rate has seen a significant decline in recent years, according to the Economic Survey 2024-25 tabled by Union Finance Minister Nirmala Sitharaman in Parliament today. The country’s unemployment rate (UR) for individuals aged 15 and above has steadily dropped from 6 percent in 2017-18 to 3.2 percent in 2023-24, marking a positive shift in the labour market.
The survey attributes this improvement to India’s robust post-pandemic recovery, along with the increased formalization of the job market. As outlined in the Periodic Labour Force Survey (PLFS), the labour force participation rate and the worker population ratio have both demonstrated substantial growth. These trends point towards a more dynamic workforce and a reduction in joblessness across various demographics.
In addition to the decline in unemployment, the survey highlights a notable rise in formal sector employment. Net additions to the Employees’ Provident Fund Organization (EPFO) subscriptions more than doubled from 61 lakh in FY19 to 131 lakh in FY24. This surge signals the formalization of the job market, with youth emerging as the primary beneficiaries. Nearly 61 percent of net payroll additions have come from workers under the age of 29, signaling a shift towards organized sector jobs for younger generations.
Self-employment has also seen an uptick, with the proportion of self-employed workers increasing from 52.2 percent in 2017-18 to 58.4 percent in 2023-24. This change reflects a growing trend of entrepreneurial activity and a preference for flexible work arrangements. The rise in self-employment is further reinforced by a decline in casual workers, from 24.9 percent to 19.8 percent, indicating a shift towards more structured forms of employment.
The Economic Survey calls for fostering an enabling environment for labour regulations that would support business growth, job creation, and economic development. It advocates for flexible working hours and the removal of restrictions on overtime, suggesting that such measures would lead to more opportunities for workers and increased earnings potential.
The Survey also highlights promising sectors for future job creation, including the digital economy and renewable energy industries. Both sectors are poised to create a wide range of employment opportunities, especially for women, driving their financial independence and empowerment. The increased focus on these sectors is expected to contribute to a diverse and sustainable job market.
The Economic Survey also notes that the female labour force participation rate (FLFPR) has grown substantially, rising from 23.3 percent in 2017-18 to 41.7 percent in 2023-24. This indicates increased participation of women in economic activities, both in rural and urban areas.