India's unemployment rate eases to 5% in August on stronger rural employment

India’s unemployment rate edged down to 5.0% in August from 5.1% in July, helped by stronger employment in rural areas, government data showed on Tuesday.

The unemployment rate in rural areas fell to 4.1% in August from 4.5% a month earlier, its lowest level since January, according to the monthly bulletin of the Periodic Labour Force Survey (PLFS).

The urban unemployment rate was largely stable at 6.8%, compared with 6.7% in July.

The overall labour force participation rate (LFPR), which measures the share of the working-age population either working or seeking work, rose to 55.6% in August from 55.4% in July.

Rural LFPR increased to 58.2% from 58.0%, while urban LFPR remained unchanged at 50.4%.

The worker population ratio (WPR), which measures the proportion of the population that is employed, rose to 52.8% in August from 52.5% in July, its highest level since March.

Rural WPR increased to 55.8% from 55.4%, while urban WPR remained at 47.0%.

On a year-on-year basis, overall LFPR rose 0.6 percentage point in August, while WPR increased by the same margin.

Rural LFPR rose 1.2 percentage points and rural WPR climbed 1.3 percentage points.

The data also showed an increase in female participation in the workforce.

Overall female LFPR rose to 34.8% in August from 34.4% in July and was up 1.1 percentage points from a year earlier.

Rural female LFPR increased to 39.4% from 38.8% in July, while urban female LFPR was broadly stable at 25.4%.

The rural female unemployment rate fell to 3.9% in August from 4.3% in July, while rural male unemployment declined to 4.3% from 4.6%.

The PLFS, conducted by India's National Statistical Office, is the government's primary source of data on employment and unemployment.

The survey methodology was revised in January 2025 to provide monthly and quarterly labour market estimates.