India’s economy has been on a trajectory of growth, but unemployment remains a persistent challenge, particularly among the youth. According to the latest Annual Report of the Periodic Labour Force Survey (PLFS) for 2023-24, the national unemployment rate in usual status for persons aged 15 years and above stands at 3.2%, a decline from 6% in 2017-18.
This figure reflects a broad improvement, driven by increased employment in sectors like manufacturing and services. However, this overall low rate masks significant regional disparities and higher rates among young people, who often face barriers to entry-level jobs due to skill mismatches and limited opportunities.
The PLFS, conducted by the Ministry of Statistics and Programme Implementation (MoSPI), is the primary government source for employment data. It provides estimates in usual status (principal and subsidiary) for annual reports and current weekly status (CWS) for quarterly bulletins. The annual data for July 2023 to June 2024 offers a comprehensive view across rural and urban areas, while the latest quarterly data for April-June 2025 focuses on urban areas and highlights ongoing trends.
In the 2023-24 PLFS annual report, youth unemployment (for ages 15-29) is particularly alarming in several states. Haryana tops the list with a youth unemployment rate of 37.4%, followed by Rajasthan at 28.5%, Bihar at 19.1%, Jharkhand at 18%, and Jammu and Kashmir at 14.8%. These figures are for the youth category, where unemployment is significantly higher than the overall average, as many young people are in education or transitioning to the workforce.
Other states like Kerala (29.9%), Lakshadweep (36.2%), and Andaman & Nicobar Islands (33.6%) also show elevated youth rates, often exceeding 30%. In contrast, states like Madhya Pradesh (3.2%) and Gujarat exhibit much lower youth unemployment, benefiting from industrial growth and better job creation. Haryana’s high rate can be attributed to its reliance on agriculture, which employs a large portion of the population but offers seasonal work.
The state has seen rapid urbanization, but job growth in non-farm sectors hasn’t kept pace with the educated youth entering the market. Rajasthan faces similar issues, with drought-prone areas limiting agricultural productivity and pushing migrants to urban centers where competition is fierce. Bihar and Jharkhand, both in eastern India, struggle with underdevelopment, poor infrastructure, and limited industrial base, leading to high out-migration for jobs.
Jammu and Kashmir’s figures are influenced by political instability and tourism fluctuations, though recent improvements in security have spurred some recovery. Moving to the most recent data from the PLFS Quarterly Bulletin for April-June 2025—the first to cover both rural and urban areas nationally—the overall unemployment rate in CWS for persons aged 15 and above is 5.4%, with rural at 4.8% and urban at 6.8%.
This represents a slight uptick from previous quarters, possibly due to post-harvest slowdowns in agriculture. Youth unemployment in this period stands at 14.6% nationally, with Himachal Pradesh recording the highest at 29.6%, Punjab at 20.2%, and Haryana at 15.6%. Himachal’s rate is double the national youth average, with rural youth unemployment at 29.1% and urban at 31.3%.
This northern state, known for its hilly terrain and tourism, faces seasonal employment challenges and a high labour force participation rate of 70.3% for ages 15+, which amplifies the unemployment figure when jobs are scarce. Punjab and Haryana, agricultural powerhouses, show persistent youth joblessness due to mechanization reducing farm labor needs and a preference for government jobs among educated youth.
Urban females in Himachal face an even starker 41.2% rate, underscoring gender disparities. These states highlight a regional pattern in northern India, where economic growth hasn’t translated into proportional job creation for the young demographic. The reasons for high unemployment in these states are multifaceted. Structural factors like over-dependence on agriculture, inadequate skill development, and slow industrialization play key roles.
In Bihar and Jharkhand, low investment in education and health exacerbates the issue, leading to a workforce unprepared for modern jobs. Government initiatives like Skill India and Make in India aim to address this, but implementation varies by state. For instance, Gujarat’s success in lowering rates stems from vibrant manufacturing hubs like those in the automobile and chemical sectors.
Comparing the 2023-24 annual and 2025 quarterly data, there’s continuity in problem areas—northern and eastern states dominate the high-unemployment list. However, the quarterly data suggests some moderation in Haryana (from 37.4% in 2023-24 youth to 15.6% in 2025), possibly due to seasonal factors or policy interventions. National trends show improvement, with employment rising to 64.33 crore in 2023-24 from 59.67 crore the previous year.
Yet, for high-unemployment states, targeted measures are needed, such as promoting tourism in Himachal and Jammu & Kashmir, agro-processing in Punjab and Haryana, and infrastructure development in Bihar and Jharkhand. In conclusion, while India’s overall unemployment rate is low, states like Haryana, Rajasthan, Himachal Pradesh, Punjab, Bihar, and Jharkhand rank high, especially for youth.
The latest government data from PLFS underscores the need for state-specific strategies to harness demographic dividends. With focused reforms, these regions can turn challenges into opportunities, contributing to a more equitable economic landscape.