As per the findings of the Periodic Labour Force Survey (PLFS) administered by the National Sample Survey Office (NSSO), India witnessed a notable decrease in its unemployment rate in 2023, reaching its lowest point in the preceding three years.
- The PLFS provides assessments of crucial employment and unemployment metrics such as Labour Force Participation Rates (LFPR), Worker Population Ratio (WPR), Unemployment Rate (UR), among others.
- It also delineates the Activity Status into categories like ‘Usual Status’ and ‘Current Weekly Status’.
Note –
Labour Force Participation Rate (LFPR) is the proportion of individuals in the population who are part of the labor force—either employed, seeking employment, or available for work.
Worker Population Ratio (WPR) represents the percentage of employed individuals in the overall population.
Unemployment Rate (UR) indicates the proportion of unemployed individuals among those in the labor force.
Activity Status, denoted as Usual Status, is determined by the activities undertaken by an individual during a specified reference period. When this period spans the last 365 days before the survey date, it is termed as the individual’s usual activity status.
Activity Status also includes Current Weekly Status (CWS), which is determined based on the activities pursued during the seven days preceding the survey date.
India’s Unemployment Trends:
- In 2023, India’s unemployment rate for individuals aged 15 and above hit a low of 3.1%, marking the lowest point in the past three years.
- This decline follows rates of 3.6% in 2022 and 4.2% in 2021. Notably, there’s been a decrease in unemployment among females to 3% in 2023 from 3.3% in 2022 and 3.4% in 2021.
- Similarly, for males, the rate dropped to 3.2% in 2023 from 3.7% in 2022 and 4.5% in 2021.
Employment Recovery:
- The employment scenario is showing signs of recovery post the Covid-19 pandemic impact, with increased economic activity post the lifting of lockdowns by the Centre and states.
Urban and Rural Employment:
- In urban areas, the unemployment rate reduced to 5.2% in 2023 from 5.9% in 2022 and 6.5% in 2021, while rural areas witnessed a decrease to 2.4% in 2023 from 2.8% in 2022 and 3.3% in 2021.
- The LFPR in Current Weekly Status (CWS) for individuals aged 15 and above in urban areas showed an upward trend, reaching 56.2% in 2023, compared to 52.8% in 2022 and 51.8% in 2021.
Economic Growth:
- These positive employment trends coincide with recent reports indicating India’s economic growth surging to 8.4% in the third quarter of 2023-24.
- Key sectors such as manufacturing, mining & quarrying, and construction have played a pivotal role in driving this growth, as indicated by data released by the NSO.
- The NSO’s second advance estimate places India’s growth at 7.6% for the entire fiscal year 2023-24, surpassing the initial projection of 7.3% released in January 2024.
FAQs
Q: What are official unemployment estimates?
A: Official unemployment estimates refer to statistical calculations of the percentage of the labor force that is actively seeking employment but unable to find work.
Q: How are official unemployment estimates calculated?
A: Official unemployment estimates are typically calculated by dividing the number of unemployed individuals by the total labor force and multiplying by 100 to obtain a percentage.
Q: Who releases official unemployment estimates?
A: Official unemployment estimates are usually released by government agencies responsible for labor statistics, such as the Bureau of Labor Statistics (BLS) in the United States or the Office for National Statistics (ONS) in the United Kingdom.
Q: Why are official unemployment estimates important?
A: Official unemployment estimates provide crucial insights into the health of an economy, helping policymakers, businesses, and individuals understand trends in job availability and labor market dynamics.
Q: What limitations should be considered when interpreting official unemployment estimates?
A: Official unemployment estimates may not capture certain nuances of the labor market, such as underemployment (people working part-time but seeking full-time work) or discouraged workers (those who have given up actively seeking employment). Additionally, the definition of “unemployment” may vary between countries, affecting comparability of estimates.
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