Unemployment rate unchanged at 3.2% in 2023-24 as female unemployment rises

Unemployment remains unchanged

India's unemployment rate remained unchanged at 3.2% in 2023-24 (July-June), as female unemployment rose to 3.2 percent from 2.9 percent in the previous year, according to the annual Periodic Labour Force Survey report released on September 23.

The male unemployment rate for both rural and urban areas dipped to 3.2 percent compared with 3.3 percent.

On the other hand, female labour force participation rose to its highest level of 41.7% in seven years compared with 37 percent in the previous year. 2023-24 also marks the first year when female labour force participation crossed 40 percent.

However, it remains much below male labour force participation, which also rose to a seven-year high of 78.8 percent.

The Indian economy averaged 7.8 percent growth during this period.

Rural-urban divide
The primary reason for a steady unemployment rate was the rise in rural unemployment to 2.5 percent from 2.4 percent. Urban unemployment during this period declined to 5.1 percent from 5.4 percent in the previous month.

This trend is also reflected in the consumption numbers, which remained muted owing to a depressed demand from rural areas.

India’s consumption growth remained at a low 4 percent in FY24, picking up slightly in April-June 2024.

Consumer durables production, a proxy for rural demand, has been in contraction for most of the year, while the non-durables sector has performed better.

In the case of urban areas, the unemployment rate was the lowest in seven years.

Male-Female diverge as well

The situation of women improved in urban areas but deteriorated in rural pockets of the country.

The primary cause for a rise in rural unemployment was female unemployment, even as the male unemployment rate held steady at 2.7 percent.

The female unemployment rate rose to 2.1 percent in 2023-24 from 1.8 percent in the previous year.

In the case of urban areas, female unemployment rate declined to 7.1 percent from 7.5 percent in the previous year, while male unemployment declined to 4.4 percent from 4.7 percent during this period.

Share of men engaged in regular wage/salaried work also rose from the previous  year, but remained unchanged for women.