India's Unemployment Rate Drops to 3.1% in 2023, Lowest in Three Years
India's unemployment rate for individuals aged 15 years or older witnessed a significant decline to 3.1% in 2023, marking the lowest figure recorded in the past three years. This encouraging trend, revealed in a report by the National Sample Survey Organization under the statistics ministry, reflects a positive shift in the employment landscape following the tumultuous period of the COVID-19 pandemic.
Decline in Unemployment
According to the Periodic Labour Force Survey (PLFS) for the calendar year 2023, the unemployment rate in India experienced a notable reduction from 3.6% in 2022 and 4.2% in 2021 to the current 3.1%. This data signifies an improving employment scenario after the pandemic-induced economic disruptions.
Gender Disparities Narrow
The survey findings also indicate a narrowing gender gap in unemployment rates. The unemployment rate for females saw a decline to 3% in 2023 from 3.3% in 2022 and 3.4% in 2021. Likewise, for males, the rate decreased to 3.2% in 2023 from 3.7% in 2022 and 4.5% in 2021. This indicates an overall favorable trend in job prospects for both genders.
Urban-Rural Disparities
Furthermore, the data highlights a positive trajectory in both urban and rural employment scenarios. The general unemployment rate in urban regions dropped to 5.2% in 2023, down from 5.7% in 2022 and 6.5% in 2021. Similarly, in rural areas, the rate fell to 2.4% in 2023 from 2.8% in 2022 and 3.3% in 2021, demonstrating a widespread enhancement across various geographical areas.
Labour Force Participation Rate (LFPR) Increase
The Labour Force Participation Rate (LFPR) in Current Weekly Status (CWS) for individuals aged 15 years and above surged to 56.2% in urban areas in 2023, compared to 52.8% in 2022 and 51.8% in 2021. LFPR measures the proportion of the population actively engaged in economic activities, reflecting growing participation in the workforce.
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Economic Growth Catalyst
This positive development in employment figures coincides with India's robust economic growth trajectory. Recent data released by the National Statistical Office (NSO) revealed a notable acceleration in India's economic growth to 8.4% in the third quarter of the fiscal year 2023–24. The manufacturing, mining & quarrying, and construction sectors played pivotal roles in driving this growth momentum.
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National Growth Projection
The NSO's second advance estimate of national accounts projected India's growth at 7.6% for the fiscal year 2023–24, up from the initial estimate of 7.3% released earlier in January 2024. This upward revision underscores the resilience and dynamism of the Indian economy, which is poised for sustained expansion in the coming years.
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