India’s Unemployment Rate Declines for Second Straight Month in August

India’s unemployment rate fell to 5.1% in August 2025, its second consecutive monthly decline, driven by improvements in rural and male employment. Rural unemployment dropped to 4.3%, while male unemployment hit a five-month low at 5%. Women’s Worker Population Ratio (WPR) and Labour Force Participation Rate (LFPR) also rose, reflecting increased workforce involvement. The Periodic Labour Force Survey (PLFS) highlights a positive recovery in India’s labour market across rural and urban areas.

India's unemployment rate for individuals aged 15 years and above dropped to 5.1% in August 2025, marking a steady improvement for the second consecutive month. The latest Periodic Labour Force Survey (PLFS), released by the Ministry of Statistics and Programme Implementation (MoSPI) earlier this week, highlights this positive trend. The August figure matches the level seen in April this year, as noted in the inaugural PLFS monthly bulletin published in May.

The unemployment rate had previously stood at 5.2% in July and 5.6% in both May and June. According to the official report, the improvement was broad-based, with notable progress recorded in rural areas and among men.

Decline in Male and Rural Unemployment

Male unemployment experienced a significant drop, reaching 5% in August — its lowest level in five months — compared to 5.3% in July. This improvement was largely driven by urban male unemployment, which decreased from 6.6% in July to 5.9% in August. In rural areas, the male unemployment rate also fell, coming down to 4.5%.

Rural unemployment, in general, has been on a downward trajectory over the past three months. From 5.1% in May, it steadily declined to 4.3% in August, indicating a sustained recovery in employment opportunities in rural regions.

Rising Worker Population Ratio Among Women

The Worker Population Ratio (WPR), which measures the proportion of employed individuals in the working-age population, also showed encouraging signs, particularly for women. Women's WPR climbed to 32% in August, up from 30.2% in June. Rural female WPR saw a notable rise from 33.6% in June to 35.9% in August, while urban female WPR improved modestly from 22.9% to 23.8% during the same period.

Labour Force Participation Rate Shows Steady Growth

The Labour Force Participation Rate (LFPR), which represents the percentage of people actively participating in the workforce, also strengthened in August. Women's LFPR increased from 32% in June to 33.7% in August, with rural areas registering a rise from 35.2% to 37.4%. Urban centres also saw an improvement, with the rate climbing from 25.2% to 26.1%.

Overall, the LFPR for all individuals aged 15 and above inched up from 54.2% in June to 55% in August, signaling a gradual expansion of the active workforce across the nation.

A Comprehensive Survey With High-Frequency Data

The findings of the August PLFS bulletin are based on data collected from 3,76,839 individuals across rural and urban households. The survey uses the Current Weekly Status (CWS) approach, which evaluates employment status based on the activities undertaken in the preceding seven days.

Since its revamp in January 2025, the PLFS has been designed to provide high-frequency labour force indicators, offering timely insights into the employment scenario across the country.

With unemployment on a downward trend and increased participation in the workforce, especially among women, the latest PLFS findings paint an optimistic picture of India's labour market recovery. As rural and urban areas continue to exhibit improvements, these numbers reflect the resilience of the country’s workforce and the gradual stabilization of employment opportunities.