Wednesday, 09 Oct, 2024
By: Yash Gupte
The PLFS released by the NSSO suggests that the unemployment rate has fallen to the lowest since 2018. Image Source: IANS
The unemployment rate in both rural and urban areas declined to 3.2 percent and 6.3 percent respectively during 2021-22 from 3.3 percent and 6.7 percent respectively in 2020-21.
The Periodic Labour Force Survey (PLFS) was released by the National Sample Survey Organisation (NSSO) on Friday, February 24, 2023. The Periodic Labour Force Survey (PLFS) gives estimates of Key employment and unemployment Indicators like, the Labour Force Participation Rates (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR). LFPR is the percentage of persons in labour force in the population. UR is defined as the percentage of persons unemployed among the persons in the labour force. The PLFS released by the NSSO suggests that the unemployment rate has fallen to the lowest since 2018. Unemployment rate has dropped to a five-year low in July-June 2021-22 to 4.1 percent. After its implementation in April 2017, the unemployment rate under the so-called "usual status" has decreased for four years in a row.
Under the ‘usual status,’ employment is determined on the basis of the reference period of 365 days preceding the date of the survey as distinct from ‘employment status,’ determined on the basis of a reference period of seven days which is known as the current weekly status (CWS) of the person. The unemployment rate in both rural and urban areas declined to 3.2 percent and 6.3 percent respectively during 2021-22 from 3.3 percent and 6.7 percent respectively in 2020-21. The unemployment rate among rural women (2.1 percent) was lower as compared to the UR in the urban women (7.9 percent). A similar trend was visible among men. The unemployment rate among men in rural areas was 3.8 percent as compared to 5.8 percent in urban areas.
The chart below shows the rural and urban unemployment rate from 2017-18 to 2021-22.
Source: Periodic Labour Force Survey
The chart suggests that there has been a gradual fall in the unemployment rate in rural as well as urban areas. The latest survey also revealed that the labour force participation rate (LFPR), which measures the proportion of the population that is either employed or looking for a job, has dramatically increased over the previous five years, rising from 37.5 percent in 2018–19 to 55.2 percent in 2021–22. According to the 2021–22 PLFS report, several migrants who had previously returned to their villages have now relocated to cities once more, with agriculture's share falling to 45.5 percent, barely below the level recorded in 2019–20 but still higher than in 2017–18 and 2018–19. HSBC economists Pranjul Bhandari and Aayushi Chaudhary said that, “As lockdowns ended, urban jobs came back. Workers who had gone home in the pandemic period returned to the big urban Centre. By the end of 2022, the return of labour to urban India was almost complete, as was the growth stimulus that had come from it.” The return of labour from their rural areas to the urban centers has provided a much required boost to the Indian economy post pandemic.
The decrease in unemployment rate is also a good news for the ruling BJP government as the 2024 general elections are just a year away.
