India’s unemployment rate fell to 5.2 per cent in the July-September period from 5.4 per cent in the quarter before, with improvement in rural areas offsetting a marginal increase in urban areas, official data released Monday showed.
The jobless rate in rural areas declined to 4.4 per cent in Q2FY26 from 4.8 per cent in Q1, while urban unemployment rose to 6.9 per cent from 6.8 per cent over the same period. Both male and female unemployment rates fell to 5.2 per cent each in the July-September period from 5.4 per cent in the previous quarter.
Across states, Uttarakhand recorded the highest unemployment rate at 8.9 per cent in the second quarter, followed by Andhra Pradesh (8.2 per cent), and Kerala (8 per cent).
The figures, based on the current weekly status (CWS), cover individuals aged 15 and above who were unemployed but actively seeking work during the seven days prior to the survey.
Youth unemployment (15-29) rose to 14.8 per cent in Q2FY26 from 14.6 per cent in Q1, according to the Periodic Labour Force Survey (PLFS) quarterly bulletin released by the ministry of statistics and programme implementation (MoSPI). The quarterly survey covered 133,901 households and 564,828 people across rural and urban areas.
Rise in labour force participation
The labour force participation rate (LFPR)-the share of population working or seeking work-rose slightly to 55.1 per cent in the July-September period from 55 per cent in the quarter before. While female participation improved to 33.7 per cent from 33.4 per cent, male participation declined to 77.2 per cent from 77.3 per cent. The rise in female LFPR reflects a “continued but modest upward movement in women’s engagement with the labour market”, the ministry said in a statement. The improvement was largely driven by an increase in rural areas to 37.5 per cent from 37 per cent.Majority of the people in the workforce in the second quarter were self-employed, which includes own account worker & employer and contributing family worker, followed by regular wage/salaried employees (25.4 per cent) and casual labour (18.9 per cent). By sector, agriculture employed 42.4 per cent of the workforce, followed by the tertiary sector (33.5 per cent), and secondary sector along with mining and quarrying (24.2 per cent).
“The increase in the share of rural employment in the agriculture sector from 53.5 per cent to 57.7 per cent during July-September 2025 can be attributed to kharif agricultural operations,” the ministry said.
Among youth, the LFPR declined to 41.3 per cent in Q2 from 42 per cent in Q1, with male and female youth participation dropping to 61.1 per cent and 21.4 per cent, respectively. The worker population ratio, or employment rate, increased to 52.2 per cent in Q2 compared with 52 per cent in Q1, with male and female rates at 73.2 per cent and 32 per cent, respectively.
