Urban youth unemployment rises as jobless rate falls: India’s unemployment rate fell to 5.1% in the July–September quarter of 2026, even as unemployment among urban workers and jobseekers aged 15 to 29 rose to 18.9%. For young women in the urban labour force, the rate was 26.1%, against 16.5% for young men. The Periodic Labour Force Survey (PLFS), released on November 10, also showed that a larger share of Indians aged 15 and above were in work. The improvement was real. The figures leave open a harder question for economic policy: whether the work available makes use of the skills young people bring to the labour market.
Farm work lifts rural employment
Rural youth unemployment fell from 14.7% in the June quarter to 13.6% in the September quarter. That brought the national youth unemployment rate down from 15.9% to 15.3%, even as the rate rose in cities. For people aged 15 and above, labour force participation increased from 54.6% to 55.5%, while the share of the population in work rose from 51.7% to 52.7%. Taken together, those figures show that more people were working and more were taking part in the labour market.
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Where they found work deserves closer attention. Agriculture accounted for 56.7% of rural employment, up from 52.9% in the June quarter. The share was 57.7% in the same quarter last year, a reminder that the farm calendar matters when reading quarterly data. The rise from June says little on its own about a lasting shift towards agriculture. It does show how much rural employment can depend on the season. A person who finds farm work during a busy spell is counted as employed. The unemployment rate alone gives no indication of how much that person earned or how many hours of work were available.
Agriculture will remain a major source of livelihood. The test for manufacturing and services is whether they can offer rural workers more reliable earnings across the year. Where such opportunities are scarce, families can end up sharing a limited amount of farm work, and underemployment can persist even as the unemployment rate falls.
Urban youth unemployment: A first job remains hard to find
In cities, regular wage and salaried employment edged up from 49.3% to 49.6% of all workers, while the share in casual labour fell to 10.7%. The increase in regular employment is welcome. These figures cover people already in work and give little indication of how many salaried jobs opened up for first-time applicants. A modest improvement in the mix of urban jobs can therefore coexist with a tougher search for young people entering the labour market.
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The India Employment Report 2024, published by the International Labour Organisation and the Institute for Human Development, found that unemployment was more common among young people with higher levels of education. One plausible explanation is that the supply of educated workers has grown faster than the number of jobs that use their qualifications. How long people can afford to look for work also affects the comparison. A graduate who can wait for a suitable opening and a school-leaver who has to take the first job available may both be struggling to find work that offers a decent living. Only one shows up as unemployed.
The figures for young urban women show a further difficulty. The 26.1% unemployment rate applies to those in the labour force. It leaves out women who are neither working nor seeking or available for work. The ILO report points to family responsibilities and social attitudes as barriers to participation. Policies aimed at helping women find a first job also have to make it possible for them to take one.
Skills programmes need employers at the table
The Pradhan Mantri Kaushal Vikas Yojana was intended to help close the gap between what young people learn and what employers need. A Comptroller and Auditor General audit of its first three phases found weaknesses in how training was aligned with sectoral skill requirements. Of roughly 56 lakh candidates certified under the short-term training and special projects components, about 23 lakh, or 41%, were reported placed. The figure covers those two components of the audited phases.
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Training can help employers fill vacancies when suitable candidates are hard to find. Its value is harder to establish when courses are commissioned with little evidence of local demand. Employers should help decide what courses are offered and where. The government should follow up with trainees to see whether placements lead to steady work and higher earnings.
For a young person leaving education, the first job is where qualifications begin to acquire value in the labour market. The government can count certificates at the end of a course and placements soon afterwards. It should also find out how many of those young people are still working six months later, what they earn and whether they use the skills they were taught.