India Business Journal - PLFS sees 4.9% fall in unemployment rate, but jobless rate at 8.05%, says CMIE

ECONOMY

PLFS sees 4.9% fall in unemployment rate, but jobless rate at 8.05%, says CMIE

IBJ Bureau
Sep 24, 2024

India’s overall unemployment rate comprising both urban and rural areas came down to 4.9 per cent in 2023-2024 (July-June) from 5.1 per cent in 2022-23, the government said on Monday, quoting the results of annual Periodic Labour Force Survey (PLFS).

Significantly, the Labour Force Participation Rate (LFPR) also saw an increase in 2023-24 to 56.4 from 54.6 per cent. The urban LFPR rose to 50.8 from 49.4 per cent, and rural LFPR climbed up to 58.9 from 56.7 per cent.

According to Madras School of Economics Director N R Bhanumurthy, the reduction in unemployment rate is consistent with the economic growth (8.2 per cent) in the last financial year. He also noted that the joblessness rate fell despite an uptick in LFPR, which has been rising steadily since the pandemic.

This was the first time the unemployment rate measured by the current weekly status (CWS) fell below the 5 per cent mark. The first annual PLFS survey was conducted in 2017-18, when the unemployment rate was 8.7 per cent, and it has since been on a declining trend.

The CWS measures the activity status of a person on the basis of a reference period of the last 7 days preceding the date of survey. CWS is used to determine the quarterly urban unemployment rates as well as the annual rural rates.

The PLFS data is however not in agreement with data from Centre For Monitoring Indian Economy (CMIE). The methodology of the two is different too, making comparisons inaccurate.

According to CMIE, India’s unemployment rate rose to 8.05 per cent in 2023-24 from 7.56 per cent in 2022-23. CMIE measures unemployment rate based on activity of a person on the day of the survey or a day prior.