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Urban unemployment in India lowest since June 2018

Feb 13, 2024 08:46 AM IST

India's urban unemployment rate dropped to 6.5% in Q4 2023, the lowest since Q2 2018. However, concerns remain over the quality of jobs as unpaid employment increased.

Urban unemployment in India stood at 6.5% in the three months to December, the lowest since the June 2018 quarter, according to Periodic Labour Force Survey (PLFS) data released by the National Sample Survey Office on Monday.

Survey showed the unemployment rate was 6.5% in the December quarter, 0.7 percentage point lower than in year-ago three months. (Sanchit Khanna/HT PHOTO)
Survey showed the unemployment rate was 6.5% in the December quarter, 0.7 percentage point lower than in year-ago three months. (Sanchit Khanna/HT PHOTO)

Although the urban unemployment number showed improvement, the quality of jobs, unlike their quantity, continued to be a cause for concern, as the share of unpaid employment increased. The quarterly survey does not include rural areas.

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The quarterly bulletin only provides summary employment statistics for urban areas in the current weekly status, or the employment situation in the week before the survey. It showed the unemployment rate was 6.5% in the December quarter, 0.7 percentage point lower than in year-ago three months.

Comparisons of employment statistics are generally made for the same quarter across years to account for seasonality of some jobs, such as those in agriculture. However, urban unemployment rate has also been improving sequentially. It was the best in the PLFS series (it started in the April-June quarter of 2018) in the December quarter.

The improvement was not because fewer people were seeking jobs. The bulletin also reported the Labour Force Participation Rate (LFPR) for urban areas, or the share of urban population working or looking for a job. This number has been increasing with decreasing unemployment. the LFPR was 39.2% in the December quarter, the highest for the December quarter in the PLFS series and also the highest for any quarter in the PLFS series.

A fall in unemployment rate with increasing LFPR is usually a good sign for the job market because it means the working-age population is seeking employment and finding jobs. However, the bulletin suggested that the jobs people found were of poor quality.

For example, 6.7% of the workers in the December quarter were unpaid helpers in household enterprises, a subcategory of self-employed. This was the highest proportion such workers have had in the urban workforce in the PLFS series. Their proportion was just 5.9% in the December 2022 quarter and 6.6% in the September 2023 quarter.

The proportion of regular wage or salaried workers, however, increased marginally in the December quarter. Their share increased to 48.7% in December 2023 from 48.6% in December 2022. This was still lower than the 50% and 49.5% figures recorded in the December 2018 and December 2019 quarters, respectively.

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  • ABOUT THE AUTHOR
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    Abhishek Jha is a data journalist. He analyses public data for finding news, with a focus on the environment, Indian politics and economy, and Covid-19.

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