Unemployment Rate in India 2024, Last 10 Year State Report

The ‘India Employment Report 2024,’ a joint project between the Institute for Human Development (IHD) and the International Labour Organization (ILO), investigates the persistent challenge of high unemployment rates among the youth in India. Established in 1998 under the umbrella of the Indian Society of Labour Economics (ISLE), the IHD functions as a non-profit independent organization dedicated to advancing a socio-economic and political structure that eradicates poverty and deprivation, striving for inclusivity across society.

Unemployment Rate in India 2024

The latest data available for the urban unemployment rate in India, according to the 22nd Periodic Labour Force Survey (PLFS), conducted in the first quarter (January-March) of 2024, the urban unemployment rate stands at 6.7% for people aged 15 years and above.

India Unemployment Rate

In July 2023, many rural workers faced challenges as the demand for labor in non-agricultural sectors dropped significantly. This led to a notable decrease in employment rates in rural areas, with nearly five million people exiting the rural labor force. Additionally, urban regions experienced a sharp decline in labor force participation rates, underscoring pressing economic issues that require urgent attention and effective solutions.

To address these challenges, it’s crucial to explore strategies that can stimulate job creation in both rural and urban sectors, enhance workforce training, and support economic diversification. By focusing on these areas, we can help revitalize the labor market and provide sustainable employment opportunities for affected workers.

Unemployment Rate in India 2013-2024

India has long faced fluctuating unemployment rates, making this a pressing issue. Below is a summary of historical trends in unemployment rates over the past decade:

The unemployment rate in India State-wise 2024

The unemployment rate of the Indian state is given below.

• India’s unemployment rate According to the Centre for Monitoring Indian Economy (CMIE) data, State Wise 2023 statistics, India’s unemployment rate increased to 8.30% in December from 8.00% in November, marking the highest level in 16 months.
• The unemployment rate in urban areas increased by 10.09% in December from 8.96% in November, while the rate in rural regions decreased to 7.44% from 7.55%, according to data from the CMIE website.
• According to Unemployment Rate in India State Wise 2022, Haryana had the highest unemployment rate last month at 37.4%, while Odisha had the lowest rate at 0.9%.

The Centre for Monitoring Indian Economy CMIE statistics released on 1st March 2023 are based on the breakdown of unemployment in different states of India. Here is a complete list of the Unemployment Rate in India State-wise as of December 2022.

Unemployment Rate in India 2024 Calculation

The formula to calculate the current unemployment rate in India –

Unemployment Rate = Number of Unemployed Persons / Number of Employed Persons + Number of Unemployed Persons

 A lower unemployment rate suggests the availability of better employment prospects and economic stability in urban areas and that only a smaller proportion of the workforce is unemployed.

Inclusions of Being Unemployed

An individual is called to be unemployed if:

• Must be at least 16 years old
• Available to work full-time in the last four weeks
• Actively looking for employment during this period
• Individuals laid off temporarily but actively looking to rejoin

Unemployment Rate in India 2022- 2023

The following table demonstrates the Month-wise Unemployment Rate in India in the year 2022 along with further bifurcation of Urban and Rural rates from January 2022 to December 2022:

State of Working India 2024 Report

Azim Premji University’s Centre for Sustainable Employment has published the “State of Working India 2024” report, providing insights into the current state of the Indian workforce and labor market. The report presents findings on the trends in unemployment in India spanning a decade. It encompasses aspects like unemployment rates, female workforce participation, intergenerational mobility, and the workforce dynamics concerning different castes. The data used for this report was sourced from various surveys conducted by the National Statistical Office, India Working Survey, and Periodic Labour Force Surveys (PLFS). According to the report, the overall unemployment rate decreased from 8.7% in 2017-18 to 6.6% in 2021-22.

Periodic Labour Force Survey (PLFS) 2022-2023

Initiated by the National Sample Survey Office (NSSO) in April 2017, the Periodic Labour Force Survey (PLFS) aimed to gather comprehensive data on employment and unemployment trends in India. The latest findings from the PLFS for April to June 2023 revealed a positive change in the country’s labor market. Specifically, the survey indicated a decreasing trend in the unemployment rate among individuals aged 15 years and above residing in urban areas.

• Significant decrease in the unemployment rate
• Increase in the Labour Force Participation Rate (LFPR)
• Improvement in the Worker-Population Ratio (WPR) particularly in urban areas

Unemployment Rate in India Analysis and Details

These statistics and forecasts highlight the challenge India faces in generating employment opportunities at a pace that matches its growing population. It underscores the need for concerted efforts from the government, private sector, and various stakeholders to address this issue and implement policies that promote job creation and economic development across urban and rural areas.

• The recent reports on India’s unemployment rates indicate a mixed picture with variations in both urban and rural areas. In February, the urban unemployment rate saw a slight decline from the previous month, while the rural unemployment rate experienced an increase. The urban unemployment rate decreased to 7.93% from 8.55%, while the rural unemployment rate rose to 7.23% from 6.48%. Additionally, the overall unemployment rate for the country rose to 7.45% in February from 7.14% in January.
• However, these figures are just snapshots of specific periods, and it is important to consider broader trends and forecasts. According to the Organization for Economic Cooperation and Development (OECD), India’s jobless rate is predicted to increase significantly in the coming years. Despite the country’s healthy economic growth, the OECD forecasts that India’s unemployment rate will quadruple from 4% to 8% by 2022.
• This projection aligns with estimates that indicate a gradual rise in India’s unemployment rate over the next few years. From a 6% unemployment rate in 2017, it is expected to climb to 8.3% by 2022, resulting in an additional 10 million people joining the ranks of the unemployed. By 2022, the total number of unemployed individuals in India is projected to reach 220 million. Although the government expects 1 million new job vacancies during this period, it acknowledges that the number of jobs created might not be sufficient to offset the overall population expansion.

Root Causes of Unemployment in India

India is making strides in its development journey, yet challenges like unemployment continue to impede overall growth. Several factors contribute to unemployment, offering insights into the current situation. These include rapid population growth, a mismatch between skills and job opportunities, automation, and a slow pace of industrialization. Additionally, regional disparities, inadequate education and training systems, and the informal nature of much of India’s labor market further complicate the unemployment issue, highlighting the need for comprehensive policy interventions.

• Large population: The sheer size of India’s population contributes to high unemployment rates as there are not enough job opportunities available to accommodate everyone.
• Lack of vocational skills or low educational levels: Many individuals in the workforce lack the necessary vocational skills or have low educational levels, which limits their employability and makes it difficult for them to find suitable jobs.
• Slowdown in private investment: Certain labour-intensive sectors have been affected by a decline in private investment, especially after the demonetization policy, leading to a decrease in job opportunities.
• Low productivity in the agriculture sector: The agriculture sector faces low productivity, and there is a lack of alternative employment options for agricultural workers. This makes it challenging for them to transition to other sectors, contributing to unemployment.
• Legal complexities and inadequate state support: Small businesses often face legal complexities, inadequate state support, and insufficient infrastructural, financial, and market linkages. These factors make it difficult for them to operate profitably, leading to job losses.
• Insufficient growth of infrastructure and manufacturing sector: The limited growth of infrastructure and low investments in the manufacturing sector restrict the employment potential of the secondary sector, resulting in fewer job opportunities.
• Informal sector dominance: A significant portion of the workforce in India is associated with the informal sector, primarily due to a lack of required education or skills. However, these informal jobs often go unaccounted for in employment statistics.
• A mismatch between education and industry requirements: The education provided in schools and colleges does not align with the current requirements of industries, leading to a mismatch between the skills possessed by job seekers and the skills demanded by employers.
• Regressive social norms affecting women’s employment: Regressive social norms discourage women from taking up or continuing employment, limiting their participation in the workforce and contributing to higher unemployment rates among women.

Impact of Unemployment

These are some of the key impacts of unemployment on the economy, society, and individuals, highlighting the negative consequences associated with high unemployment rates. The ripple effects of unemployment extend beyond just the immediate loss of income, as they can create long-term challenges for both individuals and society as a whole, including intergenerational poverty and decreased economic mobility. High unemployment can also strain public services and social safety nets, creating additional pressure on governments to find solutions, below we have discussed in detail.

• Poverty: Unemployment contributes to poverty as individuals who are unable to find work struggle to meet their basic needs and experience a decline in their standard of living.
• Increased government borrowing: Unemployment leads to a decrease in production and lower consumption of goods and services. This, in turn, reduces tax revenues for the government and increases its borrowing burden to sustain social welfare programs and provide support to the unemployed.
• Influence of antisocial elements: Unemployed individuals are more vulnerable to being influenced by antisocial elements, which can undermine the democratic values of the country and contribute to social unrest.
• Rise in crime: Prolonged unemployment can push people towards illegal and illicit activities as a means to earn money. This increase in criminal activities puts a strain on law enforcement agencies and contributes to a rise in overall crime rates.
• Economic impact: Unemployment impacts the overall economy by creating a situation where the workforce that could have been productive and generated resources becomes dependent on the remaining working population. This escalates socio-economic costs for the state, and even a small increase in unemployment can have a significant negative impact on the GDP.
• Social issues: Unemployment can have severe social consequences. It is observed that unemployed individuals are more susceptible to drug and alcohol addiction, and they may also experience mental health issues, leading to losses in human resources for the country.
• Conclusion on Unemployment Rate in India

To solve the current economic problems and balance the unemployment trends in rural and urban areas, immediate policy measures are required given the shifts in labour demand and employment rates. It emphasizes the increase of economic activities to stabilize employment possibilities and strengthen the financial stability of the nation.

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