Misleading Unemployment Rate Decline Due to Job Seekers Giving Up Job Search

42 Lakh Indians Face Job Uncertainty: Alarming Findings in CMIE Report

India’s Unemployment Crisis

As employment opportunities continue to shrink across the country, a new report by the Centre for Monitoring Indian Economy (CMIE) claims that nearly 42 lakh (4.2 million) Indians are at risk of losing their jobs. The report highlights a significant decline in India’s labor force.

In February 2025, the total number of workers in the labor force stood at 45.77 crore (457.7 million). However, by March 2025, this number had dropped by 42 lakh (4.2 million) to 45.35 crore (453.5 million).

The report also sheds light on unemployment figures. The number of unemployed individuals declined from 3.86 crore (38.6 million) in February to 3.5 crore (35 million) in March. However, this drop does not indicate an increase in job creation. Instead, it reflects the fact that many individuals have stopped actively searching for jobs, leading to their exclusion from unemployment statistics.

Declining Job Opportunities

The CMIE report suggests that employment opportunities in the market are shrinking. With fewer jobs available, many job seekers have given up their search, resulting in a misleading decline in the unemployment rate. Normally, a decrease in unemployment indicates economic improvement. However, in India’s case, it signifies worsening job prospects rather than an increase in employment.

Drop in Hiring Across Key Sectors

The report highlights a decline in hiring across multiple sectors compared to 2024:

Office jobs have seen a 1.4% decline.
Retail sector hiring has dropped by 13%.
Oil & gas sector hiring has fallen by 10%.
Education sector hiring has decreased by 14%.
IT sector recruitment has declined by 3%.

Despite the government’s initiative to provide over 1 million jobs through its e-marketplace platform in 2024-25, unemployment remains a significant concern. Over 33,000 service providers on the platform have been offering jobs with minimum wage guarantees and fixed payment standards. However, these efforts have not been enough to curb rising unemployment.

Unemployment Growing by 10 Lakh Per Month

Historically, India’s unemployed population has grown by approximately 10 lakh (1 million) per month. Between March 2021 and March 2025, an average of 9.9 lakh people were added to the unemployment list every month.

However, the latest statistics indicate a decline in the unemployment rate—not due to job creation but because many people have stopped seeking employment altogether.

The working-age population (15-59 years old) represents a crucial segment of the workforce. Ideally, these individuals should contribute to the country’s labor force if adequate job opportunities exist. However, employment rates among this group have also declined.

In December 2024, more than 38% of the working-age population was employed. By March 2025, this figure dropped to 37.7%, signaling a worsening employment crisis.

The findings of this report highlight a troubling trend in India’s job market, emphasizing the urgent need for stronger policies to generate employment and support job seekers.