The unemployment rate (UR) in urban areas declined to 6.4% in the July-September quarter of FY25, from 6.6% in the year-ago period, data released by the statistics ministry said on Monday. This is mainly a consequence of improved economic activity, particularly investments in Q2FY25, say analysts.
The Q2 joblessness rate was the lowest in any quarter since the launch of PLFS bulletin in April 2018. In Q1 FY25, the UR stood at 6.6%.
According to NR Bhanumurthy, director, Madras School of Economics, the increase in capex by both Centre and states would have led to job creation in urban areas, and consequently decline in the UR in Q2 FY25. “The first quarter (of FY25) saw a decrease in capex due to elections…which corrected in Q2,” he said. In Q1FY25, the UR stood at 6.6%.
The labour force participation rate (LFPR), defined as the percentage of persons in the labour force (working/seeking work) in the population, rose to 50.4% in the second quarter of this fiscal from 49.3% in Q2FY24; and the worker population ratio (WPR) increased to 47.2% from 46%. Both the prints were the highest ever recorded in any quarter.
During Q2FY25, the centre’s budget capex stood at Rs 2.3 trillion, up from Rs 2.1 trillion in Q2FY24 and Rs 1.8 trillion in Q1FY25. And the capex of 20 states–compiled by CareEdge–stood at Rs 1.5 trillion, up from 0.8 trillion in Q1FY25, but lower than Rs 1.6 trillion in Q2FY24.
Moreover, the data showed that during Q2, there was improvement in ‘regular wage/salaried’ jobs as well as in ‘self-employment’. The share of persons engaged in regular wage jobs rose to 23.1% in Q2FY25, from 22% in Q2FY24 and 22.6% in Q1FY25. And the percentage of persons who are ‘own account worker/employer’ increased to 15.3% in Q2FY25 from 14.4% in the year-ago period, but declined a tad from 15.4% in Q1FY25.
Former chief statistician of India Pronab Sen said: “This means, MSMEs are making a comeback, after facing a blow during Covid-19 period. If the micro, small, and medium enterprises improve their output, it creates jobs and also leads to more people starting their own businesses.”
The UR in males fell to 5.7% in Q2FY25 from 6% in Q2FY24, and that of females declined to 8.4% from 8.6%. In Q1FY25, the male UR stood at 5.8%, and the female at 9%.
For the PLFS survey, the National Sample Survey Office (NSSO) determines activity status on the basis of a reference period of last seven days preceding the date of survey, which is known as the current weekly status (CWS) of the person.
At the all-India level, in the urban areas, the number of households surveyed were 45,005; and the number of persons surveyed were 170,598, for the July-September PLFS exercise of FY25, NSSO said in the report.