India’s unemployment rate dropped to 5.2% in the July–September quarter of 2025–26 from 5.4% in the previous quarter, as per the latest Periodic Labour Force Survey (PLFS) data released by the Ministry of Statistics and Programme Implementation (MoSPI). The report also highlighted a steady rise in the proportion of salaried jobs in urban areas, reflecting improved stability in formal employment.
Although the overall share of salaried jobs in total employment saw a marginal decline to 25.4% from 25.5% in April–June, both men and women in cities experienced notable gains in stable, wage-based occupations. MoSPI’s data underscores a positive shift toward structured employment across India’s growing urban Economy.
Rise in Urban Salaried Employment
Between July and September, salaried employment among urban men increased by 50 basis points to reach 48%, while among women it climbed by 40 basis points to 55.5%. Overall, salaried positions accounted for 49.8% of total urban employment during the quarter, compared to 49.4% in April–June.
In contrast, rural areas saw a small dip in salaried job share — from 15.4% in April–June to 15% in July–September — reaffirming the dominance of self-employment and casual labor in India’s villages.
Salaried jobs are considered more secure and desirable as they offer steady income, social security benefits, and employment stability, unlike casual or self-employed occupations that are often unpredictable and seasonal.
| Category | April–June 2025 | July–September 2025 | Change (in Basis Points) |
|---|---|---|---|
| Urban Male Salaried Jobs | 47.5% | 48.0% | +50 bps |
| Urban Female Salaried Jobs | 55.1% | 55.5% | +40 bps |
| Overall Urban Salaried Share | 49.4% | 49.8% | +40 bps |
| Rural Salaried Share | 15.4% | 15.0% | -40 bps |
| Overall Unemployment Rate | 5.4% | 5.2% | -20 bps |
Agriculture Continues to Dominate Rural Employment
The PLFS data reveals that agriculture remains the largest source of rural employment in India. The share of farm-related jobs in rural employment surged from 53.5% to 57.7% during the July–September quarter, driven largely by Kharif season activities.
According to the ministry, “The increase in the share of rural employment in the agriculture sector can be attributed to Kharif agricultural operations during July–September 2025.”
For men, the proportion of agricultural work increased by nearly 5 percentage points to 49.2%, while for women, the share rose from 71% in April–June to 74.2% in July–September, underscoring the sector’s critical role in rural female employment.
Labour Force Participation and Youth Employment Trends
The overall unemployment rate for both men and women in India stood at 5.2% between July and September 2025. However, urban unemployment edged up by 10 basis points to 6.9%. For men, the rate increased slightly from 6.1% to 6.2%, while for women, it rose from 8.9% to 9.0%.
Simultaneously, the Labour Force Participation Rate (LFPR) — which measures the share of the working-age population either employed or actively seeking employment — also saw improvement. The urban LFPR for individuals aged 15 and above increased by 10 basis points to 50.7%.
Within this, the female LFPR rose to 25.8% (up by 20 bps), which is roughly one-third of the male LFPR at 75.3%. This suggests a gradual, though modest, improvement in women’s participation in urban labor Markets.
Youth Unemployment: A Persistent Challenge
While the overall unemployment rate has declined, the youth unemployment rate — covering those aged between 15 and 29 years — inched up to 14.8% in July–September from 14.6% in April–June. The increase was more pronounced in urban areas, where youth unemployment climbed by 40 basis points to 16.2% for young men and by 60 basis points to 25.3% for young women.
Despite this uptick, the youth Labour Force Participation Rate remained steady at 41.4%. However, overall urban youth unemployment increased slightly to 18.4% from 17.9%, signaling continued stress in job creation for younger demographics.
| Unemployment Indicators (July–September 2025) | Men | Women | Total |
|---|---|---|---|
| Overall Unemployment Rate | 6.2% | 9.0% | 5.2% |
| Urban Unemployment Rate | 6.2% | 9.0% | 6.9% |
| Youth Unemployment (15–29 yrs) | 16.2% | 25.3% | 14.8% |
| Labour Force Participation Rate (LFPR) | 75.3% | 25.8% | 50.7% |
Methodology Behind the Data
The PLFS survey is based on the Current Weekly Status (CWS) approach, which evaluates an individual’s employment status during the seven days preceding the survey date. The July–September 2025 edition marks the second PLFS report using an updated methodology that covers both rural and urban regions, providing a more comprehensive view of India’s labor dynamics.
Outlook: Signs of Stability Amid Structural Challenges
India’s gradual decline in the unemployment rate, combined with the rise in formal, salaried jobs in urban centers, suggests a slow but steady strengthening of the labor market. However, the persistent rise in youth unemployment and urban female joblessness highlights the ongoing need for targeted employment policies and skill development programs.
Experts suggest that sustaining this positive momentum will depend on industrial growth, rural diversification, and policy reforms that encourage private-sector hiring and entrepreneurship.
With economic expansion expected to accelerate in the next two quarters, India’s Job Market is likely to remain in focus as a key indicator of post-pandemic recovery and structural transformation.
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