India’s Unemployment Rate Climbs to 5.6% in May 2025

India’s labour market showed signs of strain as the unemployment rate increased in May 2025, reflecting economic and seasonal challenges. According to the government’s latest data, the Periodic Labour Force Survey (PLFS) has recorded a notable month-on-month rise in unemployment rates across the country.

Rise in India’s Unemployment Rate

India’s unemployment rate stood at 5.6% in May 2025, compared to 5.1% in April 2025, marking a 0.5 percentage point increase. This data has been released by the Ministry of Statistics and Programme Implementation (MoSPI) under the Periodic Labour Force Survey (PLFS), which provides critical insights into the dynamic labour market landscape in the country.

Contributing Factors to the Surge

A combination of seasonal, structural, and demand-related issues appears to be at play. The agricultural sector, which absorbs a large portion of India’s labour force, undergoes periodic shifts due to sowing and harvesting patterns. In early summer months like May, employment often dips due to reduced rural workforce demand.

Urban sectors have also witnessed a deceleration in job creation across manufacturing and services amid global uncertainties, weak exports, and cautious capital expenditure by firms.

Demographic Insights

Unemployment witnessed an uptick across both rural and urban India, with youth being the most affected. Among individuals aged 15 to 29 in rural areas, the unemployment rate rose to 13.7% in May, up from 12.3% in April. A similar trend was seen in urban areas, where the rate increased to 17.9% from 17.2% over the same period.

In May, the unemployment rate among women stood at 5.8%, slightly exceeding that of men.

The Labour Force Participation Rate (LFPR), which reflects the share of the population actively working or seeking employment under the Current Weekly Status (CWS), declined to 54.8% in May 2025, down from 55.6% in April. The rural LFPR remained higher at 56.9%, compared to 50.4% in urban regions.

For males aged 15 and above, the LFPR in May 2025 was 78.3% in rural areas and 75.1% in urban areas. This represents a slight drop from April’s figures, which were 79.0% and 75.3%, respectively.

Comparison with Previous Data

Despite the month-on-month rise, it is essential to review unemployment trends in a broader context. In May 2024, the unemployment rate was 6.1%, suggesting a year-on-year improvement but a month-on-month decline in momentum.

Government Initiatives and Policy Focus

The central government continues to push multiple employment-linked programs, such as PM Gati Shakti, Skill India Mission and PLI schemes across manufacturing sectors. These efforts aim to expand employment opportunities, particularly in underpenetrated districts and Tier II and III cities.

Read More: 8th Pay Commission: Salary Hike for Level 2 Govt Employees!

EPF Withdrawal Rules for the Unemployed

1. After 1 month of unemployment
   You can withdraw up to 75 % of your EPF corpus
2. After 2 consecutive months of unemployment
   You become eligible to withdraw the remaining 25 %, i.e., the full corpus.
3. Immediate full withdrawal
   For those permanently relocating abroad or classified as unemployed after 2 months, the entire amount can be withdrawn.

Conclusion

India’s unemployment rate rose to 5.6% in May 2025 from 5.1% in April, highlighting underlying economic stress and structural labour market challenges. While the annual trend hints at improvement, the monthly increase underlines the need for focused policy interventions amidst slow employment generation.

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