India’s unemployment rate dips to 3.1% in 2023, lowest in 3 years

India’s unemployment rate for persons aged 15 years or above declined to 3.1 per cent in 2023, the lowest in the last three years, as per a report by the National Sample Survey Organisation under the statistics ministry. The unemployment rate came down to 3.1 per cent in 2023 from 3.6 per cent in 2022 and 4.2 per cent in 2021, according to Periodic Labour Force Survey (PLFS) for calendar year 2023.

As per the data, the employment situation is improving after the Covid pandemic hit the country in March 2020. The data also showed the improvement in buoyancy in economic activities after lifting of lockdown by the Centre and states. 

Joblessness, or unemployment rate, is defined as the percentage of unemployed people in the labour force.

The survey showed that the unemployment rate among females also declined to 3 per cent in 2023 from 3.3 per cent in 2022 and 3.4 per cent in 2021. For males, it came down to 3.2 per cent in 2023 from 3.7 per cent in 2022 and 4.5 per cent in 2021. The overall rate of unemployment also declined in urban areas to 5.2 per cent in 2023 from 5.7 per cent in 2022 and 6.5 per cent 2021. In rural areas, it came down to 2.4 per cent in 2023 from 2.8 per cent in 2022 and 3.3 per cent in 2021.

Labour force participation rate (LFPR) in Current Weekly Status (CWS) in urban areas for people aged 15 years and above increased to 56.2 per cent in 2023 from 52.8 per cent in 2022 and 51.8 per cent in 2021. Labour force refers to the part of the population which supplies or offers to supply labour for pursuing economic activities for the production of goods and services and, therefore, includes both employed and unemployed persons. 

This comes days after the ministry reported that India’s economic growth accelerated to 8.4 per cent in the third quarter of 2023-24, mainly due to good performance by the manufacturing, mining & quarrying and construction sectors. The Indian economy recorded a growth of 8.4 per cent in the third quarter of this fiscal (October-December 2023), according to data released by the National Statistical Office (NSO).

The NSO, in its second advance estimate of national accounts, pegged the country’s growth at 7.6 per cent for 2023-24. It had projected a growth of 7.3 per cent for the current fiscal in its first advance estimates released earlier in January 2024.