For long, policymaking in India has suffered from lack of reliable and frequent data on employment trends in the economy. Data releases from private agencies such as CMIE have been criticised for their high monthly variations and lack of representative sampling. The launch of a monthly edition of the Periodic Labour Force Survey (PLFS) by National Statistics Office (NSO) is therefore very welcome. Apart from gauging short-term labour market trends on a monthly instead of quarterly basis, the new PLFS incorporates methodological changes as well, that bolster its reliability.

One, the survey has been rendered more representative through a significant increase in sample size. With a much wider coverage of districts across India, the monthly PLFS will cover 2.72 lakh households compared to 1.02 lakh households in the earlier version, with data being collected from 22,692 locations instead of 12,800 before. Two, a rotational panel sampling system has been introduced, where districts and households are revisited more often to ensure continuity and comparability of the data across consecutive periods. Three, both the monthly and quarterly versions of PLFS will now cover rural areas along with urban ones. Until this shift, the rural leg of survey was undertaken only on an annual basis. Given that over two-thirds of India’s workforce is situated in the hinterland, this acted as a constraint to timely policy intervention.

That said, data from the first monthly PLFS does not lead to very different conclusions on the state of India’s labour market from what was indicated by the quarterly or annual surveys. Based on Current Weekly Status (employment status for the seven days immediately preceding the survey) for the 15-plus population, the new monthly PLFS pegs the all-India unemployment rate at 5.1 per cent, a tad higher than 4.9 per cent in the January-December 2024 PLFS. The monthly data reinforces the wide divide in labour force participation between men and women at 77.7 per cent and 34.2 per cent respectively. The 2024 PLFS pegged these at 78.1 per cent and 34.7 per cent respectively. The monthly survey shows that a higher proportion of rural women seek jobs (labour force participation rate of 38.2 per cent in rural India versus 25.7 per cent in urban India) and also succeed in finding work (rural worker population ratio of 36.8 per cent against urban 23.5 per cent). The monthly data also underlines that the primary problem confronting India is the dearth of employment opportunities for the young. The unemployment rate was 12.3 per cent for rural youth in the 15-29 years age group and 17.2 per cent for urban youth.

The availability of monthly data will help the government formulate proactive policy responses to brewing labour crises, like the reverse migration witnessed during Covid. A monthly gauge of weakness or strength in the job market can also lead to more informed decisions by MPC (Monetary Policy Committee) on the growth inflation trade-off while setting rates.

Published on May 19, 2025