Urban unemployment holds at 6.7% in April-June as jobs shift beyond farm sector

New Delhi: India’s urban labour market remained broadly stable in the April-June quarter, with the unemployment rate holding near 6.7% even as regular wage and salaried employment increased, and the share of workers in the secondary sector rose, according to the latest Periodic Labour Force Survey (PLFS) data released on Monday.

The urban unemployment rate (UR) for people aged 15 years and above stood at 6.7%, marginally higher than 6.6% in January-March, according to the National Statistical Office’s PLFS quarterly bulletin. Female urban unemployment eased to 8.7% from 9.1%, while male unemployment rose to 6.1% from 5.8%.

The relative stability in urban unemployment contrasted with a rise in rural unemployment. The rural UR increased to 4.8% in April-June from 4.3% in the previous quarter, although it was unchanged from a year earlier. Rural male unemployment fell to 4.8% from 5% a year earlier.

Participation weakens

The urban labour force participation rate (LFPR) for people aged 15 years and above remained unchanged at 50.2%, while male LFPR edged up to 75.3% from 75% in the previous quarter. The urban worker population ratio (WPR), which measures the proportion of the working-age population that is employed, was also largely unchanged at 46.8%, compared with 46.9% in January-March.

Male urban WPR edged up to 70.7% from 70.6%, while female WPR declined to 22.8% from 23.1%.

At the all-India level, however, labour-force participation weakened. LFPR for people aged 15 years and above fell to 54.6% from 55.5% in the preceding quarter, while rural LFPR declined to 56.9% from 58.2%. Overall female LFPR fell to 33.2% from 34.7%.

Shift beyond farm

One of the more significant shifts in the latest data was the increase in regular wage and salaried employment in both rural and urban India. In rural areas, the share of workers in regular wage or salaried jobs rose to 16.1% from 15.5% in the previous quarter. In urban areas, it increased to 49.3% from 48.9%.

The rise is particularly notable in rural areas, where employment remains heavily concentrated in agriculture and informal work. The share of regular wage and salaried employment in rural India was also higher than the 15.4% recorded in the same quarter last year.

The employment mix points to a shift towards non-farm work, particularly in rural areas, although agriculture continues to account for more than half of rural jobs. The share of workers engaged in agriculture fell sharply to 52.9% in April-June from 55.8% in January-March.

At the same time, the share employed in the secondary sector—including manufacturing, construction, electricity and mining—rose to 24.4% from 22.6%. The tertiary sector’s share also increased to 22.7% from 21.7%.

In urban areas, the secondary sector’s employment share rose to 31.9%, while agriculture’s share declined to 6.1%. The tertiary sector continued to dominate urban employment, accounting for 62% of workers, up from 61.7% a year earlier.

The employment trends point to a gradual strengthening of non-farm employment, particularly in rural areas, although agriculture continues to account for more than half of rural jobs.

The NSO estimated that an average 56.6 crore people aged 15 years and above were employed during April-June, including 40.2 crore men and 16.4 crore women.

The latest bulletin is the fifth quarterly PLFS release under the revamped survey methodology introduced in January 2025. The redesigned survey provides monthly and quarterly labour-market indicators for both rural and urban India under the current weekly status framework, expanding the coverage of earlier quarterly bulletins that focused only on urban areas.