Labour Force Participation Rate (LFPR) and Unemployment in India
India's Labour Force Participation Rate (LFPR) reached 56.1 per cent in December, marking a new peak according to the latest data from the Periodic Labour Force Survey (PLFS) by the statistics ministry.
Key Highlights
- The unemployment rate saw a slight increase to 4.8 per cent from 4.7 per cent in November.
- The LFPR for individuals aged 15 years and above is the highest recorded since the Ministry of Statistics and Programme Implementation (MoSPI) started monthly data releases in April.
- The LFPR indicates the portion of the population that is actively seeking work.
Data Collection and Trends
- The monthly data is based on the Current Weekly Status (CWS) approach, assessing a person's activity status over the seven days preceding the survey.
- Rural areas saw an increase in job-seeking activity, with the rural LFPR rising 40 basis points to 59 per cent.
- In contrast, the urban LFPR saw a decline of 20 basis points for those aged 15 years and above.
Sectoral Insights
- Rural Areas:
- The male LFPR increased by 60 bps to 79.3 per cent; female LFPR rose 40 bps to 40.1 per cent.
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- The unemployment rate remained steady at 3.9 per cent for those aged 15 years and above.
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- However, rural youth unemployment rose by 20 bps to 12.6 per cent.
- Urban Areas:
- The LFPR either declined or remained unchanged for males, females, and young adults aged 15-29 years.
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- This resulted in an overall decline in the urban LFPR to 50.2 per cent from 50.4 per cent in November.
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- The urban unemployment rate increased to 6.7 per cent from 6.5 per cent, despite the LFPR decline.
The statistics ministry has noted that fluctuations in the PLFS ratios might not indicate "secular trends" due to increased survey frequency and various seasonal, academic, and labour market factors.
