Is Govt Hiding the Truth Behind Unemployment Data? If Not, Where Are the Jobs?

Official data is silent on the nature, form & quality of jobs. We must ask what is rising— paid jobs or unpaid work?

In this story, The Quint deconstructs the official employment data and asks economists whether the data truly reflects the Naukri Crisis unfolding on the ground.

(Image: The Quint/@Aroop Mishra)

What is a job? What counts as employment? 

Recently, the Indian government made a few tweaks in the way it collects employment data. To provide a more realistic snapshot, it was decided to gather this data monthly, from quarterly before.  

The parameter—if an individual performs any economic activity for at least an hour a week, he/she is employed.  

But does this subsistence work really translate to a meaningful job? One which comes with a decent pay and some form of social security benefits, such as health insurance, paid leaves, retiral funds, etc.

Or, to put it another way, can an individual who works, say three hours in a week truly be considered as employed? If so, how accurately does the official unemployment data capture the real picture on ground? 

Over 70 percent of independent economists, recently polled by news agency Reuters, said that the official unemployment rate of 5.6 percent in June is inaccurate. Although the government rebutted the Reuters report, saying it “relies on unverifiable perceptions rather than data-driven evidence,” the reality is there aren’t enough jobs.  

From eminent educational institutions including Indian Institutes of Technology (IITs) reporting a drop in placements to layoffs in the Big Tech—the job market is shrinking. As per the government’s own data, the unemployment rate among India’s youth (15-29 years) is three times the overall, with educated women in urban areas being the worst sufferers.  

In this story, The Quint deconstructs the official employment data and asks economists whether the data truly reflects the Naukri Crisis unfolding on the ground: 

'No Secure Jobs for Women in Urban Areas'

Labour Force Participation Rate (LFPR) is one of the key indicators of the labour market. It is defined as the percentage of the Labour Force (employed + unemployed) in the total population. 

As per Periodic Labour Force Survey (PLFS) data for the month of June, LFPR stood at 54.2 percent—56.1% and was 50.4% in urban areas. This means, more than half of India’s population constitutes its labour force. A closer look, however, reveals a deeper problem. 

While LFPR among urban men is 75 percent, it is 25 percent for urban women or a third as much. Although the labour force participation in rural areas is slightly better than in urban areas, the gender divide is quite significant here too. 

(Screenshot: PLFS Monthly Bulletin)

“There are not enough jobs for women in secure spaces. While existing jobs for women are not restrictive by design, but mobility continues to be a concern," Deepanshu Mohan, Professor of Economics and Dean, OP Jindal Global University, told The Quint. 

He added that the the low participation of urban women in the labour force has been consistent and attributed it to two factors – aspiration gap and a mismatch in the supply and demand of jobs.

Economist Dipa Sinha explained, “Urban women are now more educated but there aren’t enough jobs that match that level of education. On the other hand, many companies attribute it to skill mismatch, which again is a systemic issue. Also, women’s willingness to work depends on access to transport as well as duration of work.”    

According to official data, only 3 percent of educated women with an advanced degree were employed. The data also shows that for every 100 men working in top positions like managers, senior officials, or legislators, only about 13 women are working in similar roles. 

Employment indicators for women

(Screenshot: PLFS report)

'Joblessness Highest Among Graduates'

Another key indicator that captures the labour market is unemployment rate, which is defined as the percentage of unemployed individuals in the labour force.  

As per official data, unemployment rate for June 2025 stood at 5.6 percent, whereas it was 15.3 percent among the country’s youth (15-29 years). Mohan attributed this to the aspiration gap, where more youth are now educated but there aren’t enough jobs that match level of education, and the youth are not settling for less.            

In fact, the International Labour Organisation (ILO) in its report published last year had stated that the unemployment rate among graduates is nine times that among illiterates.

What is Increasing—Paid Jobs or Unpaid Work? 

Official data from annual PLFS reports shows that the unemployment rate has reduced to nearly half in the last six years—from 6 percent in 2017-18 to 3.2 percent in 2023-24.

“I am not questioning the data, but I am questioning its interpretation. It is important to understand the definition and how unemployment is defined in official statistics – if a person doesn’t have a job but is looking for work, he/she is considered unemployed. And those who neither have a job nor are looking for work are considered out of the labour force. This definition alone cannot be a metric for a country like ours,” Sinha clarified.  

Similarly, official data shows that LFPR has increased over the same period—from 49.8 percent in 2017-18 to 60.1 percent in 2023-24.

“The data is silent on the nature, form and structure of the jobs being added, forget about quality. It focuses on statistical arithmetic. So, when the government says LFPR is increasing, we must ask what is increasing – paid work or unpaid work,” Mohan said. 

He attributed the rise in LFPR to a higher presence of self-employed in the labour force. 

“An entrepreneur is self-employed as is a farmer working on a land, which he might not own. But their vulnerabilities, in terms of employment and exploitation, are entirely different. The official data does not give this distinction,” Mohan explained. 

More Jobs in Villages as Compared to Cities? 

As per the official monthly data from June, the labour force participation in rural areas is more than in urban areas. In fact, the proportion of rural women in the labour force is 10 percentage points more than the proportion of urban women in the labour force. 

Labour Force Participation Rate (LFPR) for June 2025

Unemployment Rate (UR) for June 2025

Again, the unemployment rate is lower in rural areas as compared to urban areas. Does this mean there are more jobs in villages than in cities? If so, how? 

The government deduces this as a thriving agriculture sector but that doesn’t match with agricultural productivity, wages or income from farming, Sinha asserted.

She explained, “One cannot sustain on open unemployment—when one is looking for work but cannot find it—for too long. So, he/she resorts to any work available. In times of distress, it has been seen women re-enter the labour force, although often it is as unpaid helpers.”    

Unpaid work is being categorised as work under self-employed, as per PLFS annual report. The maximum number of rural women fall under the ‘unpaid family work’ category.  

Meanwhile, Mohan also attributed a low LFPR in cities to inadequate capturing of informal workers as well as youth returning to peri-urban and rural areas due to the combined effect of high cost of living in cities and stagnating salaries of the middle class.  

Serious Gaps in Data Collection?

“The debate over data collection on unemployment and poverty is not too separate. There are serious methodological and normative gaps in both,” Mohan asserted. 

The government considers an individual to be employed based on their activity status in the last seven days (aka Current Weekly Status or CWS) as well as the last 365 days (aka Usual Status or US).  

For instance, if Mr X performed any activity for an hour in the last seven days (CWS), or for at least 30 days in the last 365 days (US), he will be considered employed. These employment estimates were published in quarterly and annual PLFS bulletins.

This year, however, it was decided to gather employment data from rural as well as urban areas and publish it every month instead of every quarter, relying only on CWS.   

“Usual Status is a better parameter for assessing the the nature and form of employment as compared to CWS. Usual Status includes – a principal activity, which is performed for a significant time over the last 365 days; and subsidiary activity, performed for at least 30 days in a year in addition to the principal activity,” Deepanshu Mohan, Professor of Economics and Dean, OP Jindal Global University, told The Quint.  

He illustrated it with an example: Mr X from Sonipat (a peri-urban area in Haryana) worked on farms for a significant part of the year, and in the off-season, he took up additional work as a delivery person. In addition to categorising Mr X as ‘self-employed,’ we get an idea of the landscape and the terrain of the job.  

“However, data collected using CWS doesn’t capture that at all,” Mohan asserted. He recommended that the unemployment data be shared as a range akin to pre-poll and post-poll surveys, which provide a range for seat share and vote share.