India’s unemployment rate in urban areas decreased to 6.6% in April-June (Q1FY24), down from 6.8% in Q4FY23, according to the latest bulletin on Periodic Labour Force Survey (PLFS) released by the National Sample Survey Office (NSSO). The urban unemployment rate in April-June FY23 was 7.6%.
Urban unemployment rate, as per the PLFS, ranged from 7.8% to 9.7% during the pre-pandemic period, the NSO noted. The latest number is the lowest since the PLFS-urban series started in April-June FY18. 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 male unemployment rate during the quarter eased to 5.9% from 6.0% in January-March, and the female unemployment rate decreased to 9.1% from 9.2%, the data showed.
“Increased capex by Centre helped the states to front-load infrastructural projects, which might have in turn accelerated the job opportunities in urban India,” said Lekha Chakraborty, professor, National Institute of Public Finance and Policy.
The Centre has pegged capital expenditure in the current financial year at Rs 10.01 trillion, which is 36% higher than the actual spending in FY23. In April-August, the Centre’s capital expenditure stood at Rs 3.74 trillion, up 48% from the corresponding period of last year.
The combined capex of 17 big states, whose finances were reviewed by FE, rose 45% year-on-year to around Rs 1.67 trillion in the first five months of the current fiscal, compared with Rs 1.15 trillion in the year-ago period.
Madan Sabnavis, chief economist at Bank of Baroda, said the latest data indicates that job conditions are looking better with a pick-up in economic activity.
“Higher economic growth witnessed in Q1 of 7.8% can be directly linked with this number. Also, this quarter is the time when companies on-board freshers, which means that more people have started working,” he said.
For the year FY23, the urban unemployment rate was at 3.2%, the lowest since FY18. The female unemployment rate was at 2.9% and the male unemployment rate was 3.3%, both were the lowest since FY18.
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 48.8% in April-June from 48.5% in January-March.
The LFPR in April-June was also higher than the rate observed in quarters of the pre-pandemic period, the NSSO said.
Last week, data released by the Centre for Monitoring Indian Economy showed India’s total unemployment rate dropped to a 12-month low of 7.09% in September. The rural unemployment rate declined to 6.20% in September from 7.11% in August, and the urban unemployment rate fell to 8.94% from 10.09%.