India’s Unemployment Rate Rises to 5.6% in May 2025, Women Face Higher Joblessness

New Delhi, June 16, 2025 – India’s unemployment rate climbed to 5.6 per cent in May 2025, up from 5.1 per cent in April, driven largely by seasonal factors such as a slowdown in agricultural activities following the Rabi harvest season, according to the second-ever monthly Periodic Labour Force Survey (PLFS) report released by the Ministry of Statistics and Programme Implementation. The data revealed a slightly higher unemployment rate among females at 5.8 per cent compared to 5.6 per cent for males, highlighting persistent gender disparities in the labor market.

Key Highlights

• Overall Unemployment: The unemployment rate for persons aged 15 years and above rose to 5.6 per cent in May from 5.1 per cent in April, reflecting seasonal and climatic influences, including extreme heat in parts of the country.

• Gender Disparity: Female unemployment increased by 80 basis points to 5.8 per cent, while male unemployment rose from 5.2 per cent to 5.6 per cent. The unemployment rate among women aged 15-29 surged to 16.3 per cent in May from 14.4 per cent in April, significantly higher than the overall youth unemployment rate of 15.0 per cent.

• Rural vs. Urban Trends: Rural unemployment increased to 13.7 per cent from 12.3 per cent, while urban areas saw a rise to 17.9 per cent from 17.2 per cent. In rural areas, employment shifted from agriculture (43.5 per cent in May, down from 45.9 per cent in April) to secondary and services sectors due to reduced farm activities. Urban areas reported marginal declines in own-account workers and casual laborers.

• Labor Force Participation Rate (LFPR): The LFPR for individuals aged 15 and above dropped to 54.8 per cent in May from 55.6 per cent in April. For males, it declined to 77.2 per cent from 77.7 per cent, and for females, it fell sharply to 33.2 per cent from 34.2 per cent. Rural LFPR decreased to 56.9 per cent from 58 per cent, and urban LFPR dipped to 50.4 per cent from 50.7 per cent.

• Worker Population Ratio (WPR): The WPR, representing the proportion of employed individuals, fell to 51.7 per cent in May from 52.8 per cent in April. For males, it declined to 72.9 per cent from 73.7 per cent, and for females, it dropped to 31.3 per cent from 32.5 per cent.

Factors Contributing to the Rise:

• The government attributed the increase in unemployment to a combination of seasonal, academic, and labor market-related factors. In rural areas, the end of the Rabi harvest season led to a reduction in agricultural activities, prompting a shift in employment toward secondary and services sectors. Extreme heat in certain regions also impacted labor market dynamics. In urban areas, slight declines in casual labor and self-employment contributed to the uptick in joblessness.
• The report noted a significant decline in female labor force participation, particularly among casual laborers and unpaid helpers, exacerbating gender gaps in employment.

Youth Unemployment:

• Youth aged 15-29 faced a sharper rise in unemployment, with the rate increasing to 15.0 per cent in May from 13.8 per cent in April. For young males, unemployment rose marginally from 13 per cent to 14 per cent in rural areas and from 15 per cent to 15.8 per cent in urban areas. Young females, however, saw a more pronounced increase, underscoring challenges in accessing employment opportunities.

Economic Context:

Despite the rise in unemployment, India’s economy grew by 7.4 per cent year-on-year in the January-March quarter of 2025, with projections estimating 6.5 per cent growth for the fiscal year starting April 2025. The CareEdge report highlighted robust performance in services and construction sectors, though household savings declined to 18.1 per cent of GDP, and financial liabilities rose to 6.2 per cent. Retail inflation eased to 3.2 per cent in April 2025, the lowest since August 2019.

Data Collection and Methodology

• The PLFS, conducted by the National Statistics Office (NSO), adopted a revamped sampling methodology from January 2025 to provide monthly employment and unemployment indicators for rural and urban areas using the Current Weekly Status (CWS) method. The ministry cautioned that comparisons with pre-January 2025 PLFS data should account for these methodological changes.

Public and Policy Implications

• The rise in unemployment, particularly among women and youth, has sparked discussions on social media platforms like X, with users highlighting the need for targeted job creation policies. The government’s move to release monthly unemployment data, starting May 15, 2025, aims to provide real-time insights to policymakers. However, discrepancies with private estimates, such as the Centre for Monitoring Indian Economy’s 8.65 per cent unemployment rate for December 2024, underscore ongoing debates about data reliability.
• As India navigates these labor market challenges, analysts emphasize the need for structural reforms to address skill gaps, rural-urban disparities, and gender inequalities to sustain economic growth and ensure inclusive employment opportunities.