Unemployment in India

The unemployment rate saw a decrease of 0.6% and fell to 4.2% in 2020-21, compared with 4.8% in 2019-20, according to the Periodic Labour Force Survey (PLFS) for 2020-21 released by the Ministry of Statistics and Programme Implementation.

Details –

• This means that only 4.2% of adults who looked for jobs could not get any work in rural and urban areas of the country in 2020-21.
• Rural areas recorded an unemployment rate of 3.3% and urban areas 6.7%.
• The Labour Force Participation Rate (LFPR), the percentage of persons in the labour force (that is, working or seeking work or available for work) in the population, was 41.6% during 2020-21. It was 40.1% in the previous year.
• The Worker Population Ratio (WPR) was 39.8%, an increase from 38.2% of the previous year. The WPR is defined as the percentage of employed persons in the population.
• Migrants are defined in the survey as a household member whose last usual place of residence, at any time in the past, was different from the present place of enumeration. The migration rate, according to the survey, is 28.9%. The migration rate among women was 48% and 47.8% in rural and urban areas, respectively.

What is ‘Labour Force Participation Rate’?

• According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
  • • are employed
    • are unemployed and are willing to work and are actively looking for a job
• There is a crucial commonality between the two categories — they both have people “demanding” jobs. This demand is what LFPR refers to. While those in category 1 succeed in getting a job, those in category 2 fail to do so.
• Thus, the LFPR essentially is the percentage of the working-age (15 years or older) population that is asking for a job; it represents the “demand” for jobs in an economy. It includes those who are employed and those who are unemployed.
• The Unemployment Rate (UER), which is routinely quoted in the news, is nothing but the number of unemployed (category 2) as a proportion of the labour force.