India’s unemployment rate fell to 6.43 per cent in September, its lowest level since January, with joblessness declining in rural as well as urban areas, according to the CMIE Unemployment rate.

The all-India unemployment rate was at 8.28 per cent in August. Prior to this, the all-India unemployment rate was at a low of 6.56 per cent in January this year.

Overall improvement

Urban unemployment in September declined to 7.7 per cent from 9.57 per cent in August, the data showed. Rural unemployment was also lower at 5.84 per cent in September compared to 7.68 per cent in August.

“There is a genuine improvement in performance of the labour market. It is a cause for celebration as it comes with an increase in the labour force participation rate (LFPR). Usually, a fall in unemployment rate comes with a fall in the LFPR,” said Mahesh Vyas, Managing Director, CMIE.

The reasons for the fall in the unemployment rate are however, not clear although it is expected that with normalisation in economic activities, more formal sector jobs would be created.   

Vyas said the reasons for the fall in unemployment rate may be complex but it is important to note that it has fallen despite a rise in the LFPR.

Amongst States, Rajasthan (23.8 per cent), Jammu and Kashmir (23.2 per cent) and Haryana (22.9 per cent) had the highest unemployment rates.

Chhattisgarh (0.1 per cent), Assam (0.4 per cent), Uttarakhand (0.5 per cent) and Madhya Pradesh (0.9 per cent) had the lowest unemployment rates.

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