Decline in Unemployment Rate : Periodic Labour Force Survey
Context : Latest unemployment data has been released for the month of July as well as Quarter of April – June.
UPSC Relevance:
Prelims, GS3, Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
PYQ :
2021 Prelims
With reference to casual workers employed in India, consider the following statements:
1. All casual workers are entitled for Employees Provident Fund coverage.
2. All casual workers are entitled for regular working hours and overtime payment.
3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account.
Which of the above statements are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
2023
Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.
2015
The nature of economic growth in India is described as jobless growth. Do you agree with this view? Give arguments in favour of your answer.
PLFS (Periodic Labour Force Survey)
- Conducted by the Ministry of Statistics and Programme Implementation (MoSPI) since 2017.
- Covers both rural and urban areas .
- Uses a multistage stratified sampling design; samples both households and census blocks to represent all districts in India.
New methodology used for PLFS
- As part of the revamped survey design of the PLFS adopted in January, a rotational panel sampling design is being used.
- Under this, each selected household is visited four times in four consecutive months. This ensures that three-fourths of first-stage sampling units, or FSUs, are matched between two consecutive months.
- The district is the basic sampling unit, improving representativeness.
- The number of households surveyed has also increased.
- The redesigned PLFS aims to achieve the following objectives:
- To generate key employment and unemployment indicators – namely Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and Unemployment Rate (UR) – every month for both rural and urban areas at the all-India level under the Current Weekly Status (CWS).
- To extend the Quarterly PLFS results to rural areas, thereby producing quarterly estimates of labour market indicators for both rural and urban India under the CWS framework.
- To provide annual estimates of key employment and unemployment indicators in both usual status (ps+ss) and Current Weekly Status (CWS) for rural as well as urban areas.
Important Concepts
Labour Force: Persons aged 15 years and above who are working (employed) or seeking/available for work (unemployed).
Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in labour force (i.e. working or seeking or available for work) in the population.
Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labour force.
Current Weekly Status (CWS): The activity status determined on the basis of a reference period of last 7 days preceding the date of survey is known as the current weekly status (CWS) of the person.
Usual Principal Status (UPS): A person is considered employed/unemployed based on their activity status over the last year (183 or more days of unemployment in 365 days).
Usual Principal & Subsidiary Status (UPSS): Considers both main and subsidiary (side) activities over the last year.( considers even 30 days of unemployment in last 12 months).
Monthly data – JULY
- The monthly jobs data is based on the Current Weekly Status (CWS) approach.
National Unemployment (July 2025)
| Category | June 2025 | July 2025 |
| Overall (15+) | 5.6% | 5.2% |
| Male | 5.6% | 5.3% |
| Female | 5.6% | 5.1% |
Labour Force Participation Rate (LFPR)
| Category | June 2025 | July 2025 |
| Overall | 54.2% | 54.9% |
| Male | 77.1% | 77.1% |
| Female | 32% | 33.3% |
Youth Unemployment (15–29 years)
| Location | June 2025 | July 2025 |
| All-India | 15.3% | 14.9% |
| Rural | 13.8% | 13% |
| Urban | 18.8% | 19% |
Quarterly Data : (April – June 2025)
- Based on the Current Weekly Status (CWS) approach.
Overall Unemployment (15+)
- 5.4% national average
- Rural: 4.8%
- Urban: 6.8%
State Highlights
| State | Unemployment (15+) | Youth Unemployment |
| Rajasthan | 8.8% (Highest overall) | – |
| Gujarat | 2.2% (Lowest overall) | 5.6% (Lowest youth) |
| Himachal Pradesh | – | 29.6% (Highest) |
Labour Force Participation (Quarterly, Apr–Jun 2025)
| Category | LFPR |
| All-India (15+) | 55% |
| Male | 77.3% |
| Female | 33.4% |
| Highest LFPR: Himachal Pradesh | 70.3% |
| Lowest LFPR: Delhi | 43.5% |
Sector-Wise Employment
- Rural – Agriculture dominates
- Men: 44.6%
- Women: 70.9%
- Urban – Tertiary sector dominates
- Men: 60.6%
- Women: 64.9%
Important Trends to be remembered.
- July unemployment lowest in 3 months (5.2%).
- Women driving workforce participation growth.
- Rural youth unemployment fell sharply, urban youth joblessness edged up.
- Himachal facing massive youth unemployment (~30%) + natural disaster impacts.
- Gujarat is strong on both low unemployment and high youth LFPR.
Types of Unemployment
- Disguised Unemployment: More people engaged in a task than needed, mostly in agriculture.
- Seasonal Unemployment: Labourers jobless during off-seasons (esp. in farming).
- Structural Unemployment: Mismatch between skills and job requirements.
- Frictional Unemployment: Temporary unemployment during job transitions.
- Cyclical Unemployment: Due to changes in business cycles i.e. boom or recession.
- Technological Unemployment: Loss of jobs due to automation/technological progress.
- Vulnerable Unemployment: Informal workers without legal or social security