Unemployment Rate in India: A Comprehensive Analysis of the Sep 2023 Quarter.

Overview of Unemployment Rate in India

The latest government survey reveals a notable decline in the unemployment rate in India for the September quarter, marking a positive shift in the economic landscape. The unemployment rate, a crucial indicator of job market dynamics, dipped to 6.6% in the specified quarter. This represents a decline from 6.8% in the March quarter of the previous fiscal and 6.6% in April-June. The corresponding rate in the third quarter of the previous fiscal was 7.2%.

Impact of Covid-related Restrictions

The high joblessness experienced in the July-September period can be largely attributed to the lingering impact of Covid-related restrictions, which disrupted normal economic activities across the country. As the nation navigated through the aftermath of the pandemic, the job market faced challenges that impacted the unemployment rate.

Urban Labour Force Participation Rate

The survey delves into the urban labour force participation rate, specifically in the Current Weekly Status (CWS) for individuals aged 15 years and above. In the July-September quarter of 2023, there was a noticeable increase in the labour force participation rate in urban areas, reaching 49.3%. This represents an improvement from 47.9% in the same period a year ago, indicating a growing engagement in economic activities.

Demographic Breakdown of Unemployment Rate in India

Overall Unemployment Rate

The overall unemployment rate in India for individuals aged 15 years and above in urban areas witnessed a decline to 6.6% in the September quarter, compared to 7.2% a year ago. This data signifies a positive trend in job market conditions, offering hope for improved employment opportunities.

Unemployment Rate Among Females

Among females aged 15 years and above in urban areas, the unemployment rate showed a significant decrease from 9.4% in the same quarter last year to 8.6% in July-September. This positive shift highlights advancements in gender-specific employment scenarios.

Unemployment Rate Among Males

For males in the same age group and geographical region, the unemployment rate dipped to six per cent in July-September compared to 6.6% in the year-ago period. This trend reflects a positive trajectory for male employment, contributing to the overall decline in urban unemployment rates.

Labour Force Participation Rate and Worker Population Ratio

The Labour force participation rate in CWS for individuals aged 15 years and above in urban areas rose to 49.3% in July-September 2023, showcasing an upward trend from 47.9% a year ago. This increase indicates a growing inclination towards participating in economic activities.

Worker Population Ratio

The Worker Population Ratio (WPR) in CWS in urban areas for the same age group reached 46%, demonstrating an improvement from 44.5% in the corresponding period a year ago. The WPR is a significant metric that reflects the proportion of the working-age population currently employed.

Understanding Labour Force Concepts

To gain a comprehensive understanding of the labour force landscape, it’s essential to explore key concepts:

Labour Force

The labour force encompasses individuals offering or willing to supply labour for economic activities, including both employed and unemployed persons.

NSSO’s PLFS Approach

The National Sample Survey Office (NSSO) initiated the Periodic Labour Force Survey (PLFS) in April 2017. PLFS provides estimates of crucial labour force indicators, including unemployment rate, Worker Population Ratio (WPR), Labour Force Participation Rate (LFPR), and distribution of workers by employment status and industry of work in CWS.

CWS Approach

In the Current Weekly Status (CWS) approach, a person is considered unemployed if they did not work for even one hour during the week but sought or were available for work for at least one hour during the period.

LFPR and WPR

LFPR is defined as the percentage of the population in the labour force, while WPR represents the percentage of the working-age population currently employed.

Conclusion: Insights from the 20th Periodic Labour Force Survey

The 20th Periodic Labour Force Survey provides valuable insights into the unemployment landscape in India, particularly in urban areas. The decline in the overall unemployment rate in India, coupled with positive trends in labour force participation and worker population ratio, indicates a gradual recovery from the economic impact of the pandemic. Policymakers, analysts, and stakeholders can leverage this data to make informed decisions and implement measures that support sustained economic growth and employment generation. As the nation progresses, continuous monitoring and adaptation to evolving labour market dynamics will be crucial for shaping a resilient and inclusive workforce.

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