India’s overall unemployment rate in urban areas remained unchanged at 6.6% in July-September quarter as compared to April-June, according to the latest bulletin on Periodic Labour Force Survey (PLFS) released on Wednesday by National Sample Survey Office (NSSO). In July-September 2022, the unemployment rate was 7.2%.
In April-June, the unemployment rate of 6.6% was the lowest since the start of the PLFS-Urban series in FY18. Urban unemployment rate, as per the PLFS, ranged from 7.8-9.7% during the pre-pandemic period.
The quarterly PLFS surveys pertain to persons of 15 years of age and above and denote the current weekly status (CWS) of the persons surveyed. The CWS is the activity status of a person determined on the basis of a reference period of the last seven days preceding the date of survey.
The fall in the overall unemployment rate in Q2 FY24 was due to the decline in female unemployment rate, which fell sharply to 8.6% from 9.1% in Q1 FY24. The male unemployment rate, on the other hand, rose to 6.0% in Q2 from 5.9% in Q1.
Abhishek Upadhyay, senior economist, ICICI Securities Primary Dealership, said, “The overall low unemployment rate seems consistent with the strong income tax collections seen in the current financial year. Income tax collections (till November 9) are up 22% year-on-year, which is sharply higher than the nominal GDP growth recorded during the period.”
Meanwhile, the Labour Force Participation Rate (LFPR) – an estimate of the country’s active workforce or people seeking jobs (which includes both employed and unemployed persons) for age 15 years and above – rose to 49.3% in July-September from 48.8% in April-June. The LFPR in Q2 FY24 was higher than the rate observed in quarters of the pre-pandemic period.
The Worker Population Ratio (WPR) also increased to 46.0% in July-September from 45.5% in April-June. The WPR is defined as the percentage of employed persons in the population.