Unemployment Rate In India Falls To Record Low of 6.4%; Formal Jobs Improve – News18

Last Updated:November 20, 2024, 17:38 IST

India’s unemployment rate (UR) in urban areas has dropped to a historic low of 6.4% for individuals aged 15 years and above during the July-September 2024 quarter,

India’s unemployment rate (UR) in urban areas has dropped to a historic low of 6.4% for individuals aged 15 years and above during the July-September 2024 quarter, according to the latest government data. This marks a significant improvement from 6.6% in the same period last year, reflecting a steady strengthening of the country’s labour market.

The Labour Force Participation Rate (LFPR), which measures the proportion of people earning or actively seeking work in relation to the total population, also showed encouraging signs, as per the latest Quarterly Periodic Labour Force Survey. It rose to 50.4% in the July-September 2024 quarter, up from 49.3% a year ago, indicating a broader inclusion of individuals in the workforce. The Worker Population Ratio (WPR), representing the percentage of employed individuals among the total population, climbed to 47.2% from 46.0% during the same period last year.

Gender-Specific Gains in the Workforce

Improvements in employment metrics were seen across both genders. Among men aged 15 years and above, the UR dropped from 6.0% in July-September 2023 to 5.7% in the corresponding period of 2024. For women, the UR decreased marginally from 8.6% to 8.4%, while their LFPR saw a notable increase from 24.0% to 25.5%. Male participation in the labour force rose from 73.8% to 75.0%, underscoring the broader trend of growing workforce engagement.

Employment Quality: Shift Towards Formal Jobs and Services

The decline in unemployment has been complemented by an improvement in the quality of jobs. Sandeep Vempati, economist and member of the Bharatiya Janata Party, said the share of regular wage or salaried employment rose to 49.4% in the July-September 2024 quarter from 48.3 per cent a year earlier, signaling a shift away from informal employment.

Sectoral data further highlighted this qualitative shift. “The share of tertiary sector jobs increased to 62.3% during the July-September 2024 quarter as compared with 61.5% a year ago, while the agriculture sector’s share reduced,” Vempati noted. The share of secondary sector along with mining and quarrying remained constant. This transition reflects a growing emphasis on service-based employment.

‘Policy Reforms Driving Change’

Vempati attributed these positive trends to the impact of reforms and schemes designed to stimulate economic activity. “As an outcome of the Modi government’s reforms, policies, and schemes, the Indian economy is well-oiled, and economic growth and labour markets are reinforcing each other,” said the economist.

The alignment of economic growth with job creation is evident in the consistent improvement in labour force metrics. For instance, as per the data, the youth unemployment rate, a critical metric, also improved, signalling better opportunities for India’s younger population.

Strengthening Labour Market

The latest data from the finance ministry showed the record-low unemployment rate and the overall rise in workforce participation, stating, “Unemployment Rate (UR) in urban areas among persons of age 15 years and above decreased from 6.6% during July-September 2023 to 6.4% during July-September 2024.”

According to the official statement, the ministry pointed to the strengthening labour market for women, noting a rise in female LFPR from 24.0% to 25.5% year-on-year, alongside an increase in WPR among women.

“The three most widely monitored indicators by policymakers and economists — labour force participation rate (LFPR), worker population ratio (WPR) and unemployment rate (UR) — have shown improvement compared to a year ago and also a quarter ago. This improvement is also seen gender-wise,” said Vempati.