India’s unemployment rate has held steady at 5.6% since May, as per PLFS data. The rise in self-employment has contributed to maintaining the overall unemployment rate as individuals find alternative income sources when formal job opportunities are limited.
What is the purpose of the PLFS?
The Periodic Labour Force Survey (PLFS) is a major household survey conducted by the National Sample Survey Office (NSSO) under the ministry of statistics and programme implementation (MoSPI). It was launched in 2017 to provide timely and regular estimates of the following trends in the labour market:-
Labour force participation rate (LFPR): It is the percentage of working age population that is either working or actively looking for work;
Worker population ratio (WPR): It’s the proportion of employed individuals in the population;
Unemployment rate (UR): It is the proportion of population above 15 years who a are looking for a job but did not get it.
The reference period for the survey is 365 days for usual status (US) and seven days for current weekly status (CWS). Labour force according to CWS is the number of persons either employed or unemployed on an average in a week preceding the date of survey. The PLFS replaces the earlier Employment-Unemployment Surveys conducted by NSSO.
What changes were recently made in the sample design?
In January 2025, the PLFS sample design was revamped resulting in the updation of dissemination to enable generation of monthly estimates of LFPR,WPR and UR. From 2025, the annual PLFS data released is based on the calendar year(January to December). Earlier, it followed the July to June calendar — July of the previous year to June of the next year. It is expected that these changes will facilitate more comprehensive analysis of labour market performance.
The annual sample size now covers 2,72,304 house holds against 1,02,400 earlier, a more than two-fold increase.It also involves collection of data in new metrics — household income from rent, pensions, interest, remittances, land ownership, leasing, years of schooling, attendance rates and vocational and training certifications.
What are the latest findings?
The PLFS figures for June 2025 (CWS) released this month shows that LFPR for persons of age 15 years and above was 54.2%, against 54.8% in May. In April, this was 55.6%. LFPR in rural areas was 56.1% and in urban areas 50.4%. Rural male LFPR was 78.1% in June while rural female LFPR was 35.2%. Urban female LFPR was 25.2% and urban male LFPR 75%.
WPR in CWS for age 15 years and above was 51.2% in June. It was 51.7% in May and 52.8% in April. Rural WPR was 53.3% while urban WPR was 46.8%. A notable trend was that rural female WPR dropped over 1% from May 2025.
The unemployment rate for the entire country remained steady at 5.6% with slight monthly variations by gender/age but stable overall.
Interpreting the data
The June data reflect a stable unemployment scenario, with a slight seasonal dip in labour force participation and employment, particularly in rural and female segments. Urban unemployment did not increase while female labour force involvement continues to lag behind males.
This trend was more pronounced among rural females, where over a 1-percentage point decline in workforce participation was observed compared to May 2025. Data shows that several unpaid helpers in June 2025 reported themselves as engaged in domestic duties, contributing to a decline in the labour force, especially among higher-income rural households.
Also, the share of rural female workers in agriculture dropped from 70.2% in May to 69.8% in June 2025, indicating the reduced need for agricultural engagement among women, perhaps due to a decline in rural inflation, which reduced the need for them to supplement their family incomes.
Self-employment trends
The PLFS data also show there has been an increase in the share of own-account workers, particularly in the rural areas in June 2025 as compared to May 2025. These workers are essentially self-employed workers, who operate their own businesses or trades without employing any paid labour. They, by and large, constitute the informal sector. The rise in own-account work during this period was driven by seasonal activities such as petty trade, repairs or providing services. This suggests a trend away from casual labour or wage employment.
The rise in self-employment has contributed to maintaining the overall unemployment rate as individuals find alternative income sources when formal employment opportunities are limited.
The marginal decline in LFPR and WPR in June 2025 was largely influenced by seasonal agricultural patterns, intense summer heat limiting outdoor physical work, and a shift of some unpaid helpers, particularly from higher-income rural households, towards domestic chores.