India's urban unemployment hits 6-year low on hiring of fresh recruits

For the first time in six years, India’s urban unemployment rate declined to 6.4 per cent in the 2024 July-September quarter, data released by the Ministry of Statistics and Program Implementation (Mospi) revealed.

India’s urban employment rate in 2024 April-June quarter and in last year’s July-September stood at 6.6 per cent.

The unemployment rate is defined as the percentage of people unemployed among the persons in the labour force.

As per the Periodic Labour Force Survey (PLFS) data released by the ministry, the labour force participation rate (LFPR) also improved to 50.4 per cent during the 2024 July-September quarter against 50.1 per cent in the previous quarter and 49.3 per cent in the same quarter last year.

LFPR is defined as the percentage of people in the labour force, that is, those in the population working or seeking/ available for work.

A report by Economic Times quoted Madan Sabnavis, chief economist at Bank of Baroda, as saying that the uptick is possibly because of recruitment of freshers by companies during this time.

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“There is demand as indicated by the PMI (Purchasing Managers Index) readings, which stayed above 50 during this period, suggesting a higher labour intake,” Sabnavis added.

Decline in male & female unemployment rates

The data released by the ministry showed a decline in the unemployment rate among male and female to 5.7 per cent and 8.4 per cent respectively in July-September 2024 period.

The ministry in a release pointed out that more women are joining the workforce, unemployment rates are falling, and incomes are steadily rising across categories.

States with highest unemployment rate

With 11.8 per cent, the highest unemployment rate was in Jammu and Kashmir, followed by Odisha (10.6 per cent), Bihar (10.4 per cent), Kerala (10.1 per cent), Rajasthan (8.9 per cent), and Himachal Pradesh (8.7 per cent).

The PLFS surveyed 45,005 households and 170,598 people for the July-September round.

Male & female LFPR

The labour force and participation of male in July-September 2024 touched a record of 75 per cent, while the female LFPR was 25.5 per cent, lower than 25.6 per cent recorded in January-March 2024.

As per the data, almost half of the workforce were regular wage/salaried employees, followed by self-employed (39.9 per cent) and casual labour (10.7 per cent).

Among the self-employed, 32.6 per cent were own-account workers or employers, and 6.2 per cent worked as a helper in household enterprises, the data said.

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The data further showed that more than half of female workers were regular wage or salaried employees. However, this share was slightly lower from 54 per cent in the previous quarter.

Among males, 47.9 per cent were regular wage or salaried employees.

Participation of woman increased within self-employment, mainly as helpers in household enterprises.

States with higher LFPR

As per the data, of 22 states/UTs, 13 had a higher LFPR than the national average, with Himachal Pradesh leading at 61.8 per cent. Gujarat followed with 53.9 per cent, West Bengal (53.8 per cent), Telangana (53.5 per cent), Assam (53.2 per cent), Maharashtra (52.8 per cent).

The youth (15-29 years) LFPR was 41.6 per cent in July-September 2024, with 59.8 per cent for males and 21.9 per cent for females.

The youth unemployment rate, meanwhile, was 15.9 per cent, with 14.2 per cent for males and 21 per cent for females.

With inputs from agencies.