In April 2023, India’s unemployment rate rose to 8.11%, the highest in four months, as reported by the Centre for Monitoring India’s Economy. While urban unemployment increased to 9.81% from 8.51%, rural unemployment marginally decreased to 7.34% from 7.47%. Despite the rise in unemployment, labour force participation surged by 25.5 million, reaching 467.6 million in April, with an overall participation rate of 41.98%.
Creating jobs for India’s increasing population remains a significant challenge for Prime Minister Narendra Modi’s government as he eyes a third term in the upcoming national elections. However, graduate unemployment has shown a declining trend, according to the Minister of State for Labour and Employment, Rameswar Teli. The annual Periodic Labour Force Survey Reports showed that the unemployment rate for graduate degree holders reduced from 17.2% in 2019-20 to 14.9% in 2021-22.
Investments in infrastructure and productive capacity have a large multiplier impact on growth and employment, said Teli. To enhance growth potential and job creation, the government proposed a steep increase in the capital investment outlay of 33% to Rs 10 lakh crore in the budget for 2023-24. This increase is central to the government’s efforts to create job opportunities, and its ability to do so will play a significant role in the upcoming national elections as Modi seeks to secure a third term in office.