What Factors Contributed to India's Notable Drop in Unemployment in 2022-2023?

Sectoral News: The Worker Population Ratio (WPR) in usual status for individuals aged 15 and above also rose from 46.8% in 2017-18 to 56% in 2022-23. WPR represents the percentage of employed persons in the population.

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The Processor
12 Oct 2023
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unemployment

The National Sample Survey Office (NSSO) recently released its annual report for 2022-2023, showcasing significant trends in India's labor force. The unemployment rate for individuals aged 15 and above reached a six-year low at 3.2% during the period from July 2022 to June 2023. This rate reflects the percentage of unemployed persons in the labor force.

Periodic Labour Force Survey

Recognizing the importance of frequent labor force data, the NSSO initiated the Periodic Labour Force Survey (PLFS) in April 2017. This survey covers a reference period from July to June each year.

The Unemployment Rate (UR) in usual status for individuals aged 15 and above at the national level declined from 4.1% in 2021-22 to 3.2% in 2022-23. The trend shows improvement from 2020-21 (4.2%), 2019-20 (4.8%), 2018-19 (5.8%), and 2017-18 (6%).

Urban, Rural Disparities in Unemployment

In this context, "usual status" indicates a person's employment status determined based on the preceding 365 days before the survey date.

The data reveals a noteworthy reduction in unemployment across different segments. In rural areas, the UR decreased from 5.3% in 2017-18 to 2.4% in 2022-23, while in urban areas, it decreased from 7.7% to 5.4%. Moreover, for males, the UR decreased from 6.1% in 2017-18 to 3.3% in 2022-23, and for females, it decreased from 5.6% to 2.9%.

Increased Labor Force Participation

The Labor Force Participation Rate (LFPR) in usual status for individuals aged 15 and above increased from 49.8% in 2017-18 to 57.9% in 2022-23. LFPR represents the percentage of persons in the labor force, including those working, seeking work, or available for work.

In rural areas, LFPR increased from 50.7% in 2017-18 to 60.8% in 2022-23, and in urban areas, it increased from 47.6% to 50.4%. For males in India, LFPR increased from 75.8% in 2017-18 to 78.5% in 2022-23, while for females, it grew from 23.3% to 37.0%.

A Rising Worker Population Ratio

The Worker Population Ratio (WPR) in usual status for individuals aged 15 and above also rose from 46.8% in 2017-18 to 56% in 2022-23. WPR represents the percentage of employed persons in the population.

In rural areas, WPR increased from 48.1% in 2017-18 to 59.4% in 2022-23, and in urban areas, it increased from 43.9% to 47.7%. For males in India, WPR increased from 71.2% in 2017-18 to 76.0% in 2022-23, and for females, it rose from 22.0% to 35.9%.

The NSSO has been reporting labor force data through five annual reports based on PLFS data collected from July 2017 to June 2022. The recently released sixth annual report covers the period from July 2022 to June 2023.

The report acknowledges challenges faced during data collection, particularly in the state of Manipur, where 51 first-visit and 68 revisit samples encountered difficulties due to a disrupted field situation and lack of internet services in the last quarter of April-June 2023.