India's unemployment rate held at 5% in August as rural unemployment declines

New Delhi: India’s unemployment rate remained steady at 5% in August as a rise in urban unemployment was offset by easing rural unemployment, according to the latest monthly bulletin of the Periodic Labor Force Survey (PLFS) released by the Department of Statistics on Tuesday.

The unemployment rate for people aged 15 and older rose to 6.8% in urban areas in August from 6.7% in July, driven by increases among both males and females, the Ministry of Statistics and Program Implementation (MoSPI) said.

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In rural areas, however, the unemployment rate fell to 4.1% in August from 4.5% in July. Rural male unemployment fell to 4.3% from 4.6%, while female unemployment fell to 3.9% from 4.3%.

Compared to August 2025, the overall and urban unemployment rates remained more or less stable, while the rural rate fell by 0.2 percentage points from 4.3% to 4.1%, MoSPI said.

Participation threshold higher

The overall labor force participation rate (LFPR) for those aged 15 and over rose marginally to 55.6% in August from 55.4% in July and was higher than the 55% recorded a year earlier.

The urban LFPR was unchanged at 50.4%, while the rural LFPR rose to 58.2% from 58% in July.

The LFPR for women also increased to 34.8% in August from 34.4% in July, remaining above the 33.7% recorded in August 2025.

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The total working population ratio (WPR) rose to 52.8% in August from 52.5% in July, driven by increased labor force participation in rural areas. Urban WPR remained unchanged at 47%, while rural WPR rose to 55.8% from 55.4%.

Male WPR increased to 73.5% in August from the previous month and from the same month a year earlier, the survey said.

Overall decline

The overall unemployment rate for men aged 15 and over fell for the third consecutive month, reaching 4.9% in August from 5.4% in May. Rural male unemployment fell to 4.3% in August from 4.6% in July, while urban male unemployment rose to 6.1% from 5.9%.

Among women aged 15 and over, the overall unemployment rate fell for the second straight month to 5.1% in August from 5.9% in June. Rural female unemployment also fell to 3.9% in August from 4.3% in July, while urban female unemployment remained broadly stable at 8.9% month-on-month.

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The primary source of data on labor force participation, employment and unemployment is the PLFS, which is conducted by the National Statistical Office (NSÚ), MoSPI. Its methodology was modified from January 2025 to provide monthly and quarterly estimates of labor market indicators.

The monthly bulletins provide all-India estimates of labor force participation rate, working population share and unemployment rate using the current weekly status (CWS) approach.

The August estimates are based on information collected from 370,160 people, including 211,363 in rural areas and 158,807 in urban areas.