The unemployment rate in urban areas for people aged 15 years and above declined to 6.6% in the April-June quarter compared with 6.8% in the previous quarter and 7.6% in Q1FY23, according to the quarterly periodic labour force survey report released by the National Statistical Office of the government.
The Indian economy grew 7.8% in the first quarter of the year on the back of rising services growth and strong domestic demand.
The improving employment situation in the country also translated into an improvement in female labour force participation in urban areas to 23.2% from 22.7% in the previous quarter.
Male labour force participation remained steady at 73.5%.
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“Labour Force Participation Rate (LFPR) is defined as the percentage of population in the labour force. Labour force according to current weekly status (CWS) is the number of persons either employed or unemployed on an average in a week of 7 days preceding the date of survey,” the report noted.International organisations have been asking India to increase labour force participation for women to improve its growth potential. In an interview with ET last week, Auguste Tano Kouamé, World Bank’s country director for India, noted that increasing female labour force participation was necessary to achieve an 8% growth rate, which is needed to become a developed economy by 2047.
Seven of the 22 states in PLFS had female labour force participation rates lower than 20%. Bihar was the worst with 11.9% FLFPR, followed by Jharkhand at 12.1% and Uttar Pradesh at 13.1%.
Himachal Pradesh was the only state with female labour force participation higher than 30%.
Analysis of PLFS data indicates that even though female participation improved, unemployment was still higher than male counterparts.
While the unemployment rate for men aged 15 years and above declined below 6%, female unemployment rate remained above 9% for the fifth consecutive quarter.
The female unemployment rate in urban areas was 9.1% in Q1FY24, whereas the male employment rate was 5.9%.
Moreover, the ratio of women employed as salaried workers had declined compared with the previous year, whereas the ratio of men in formal sector employment had increased.