Top 10 Indian states with the highest and lowest unemployment rate

Today, as the fifth largest economy in the world, India’s economy, with a GDP exceeding $3.94 trillion in 2024, is on a fast track.

Going by IMF predictions, India is probably to overtake Japan to become the fourth-largest economy in the world by the end of 2025, and two years later, it will overtake Germany to evolve into the world’s third-largest economy.

As the world’s most populous country, India’s economic growth story has benefitted from its large and educated human capital.

However, conversely, India’s educated young face greater unemployment rates, indicating a mismatch between the Indian economy and its labour market.

The Periodic Labour Force Survey (PLFS) for the period July 2023 to June 2024, issued by the Labour Bureau on Monday (September 23, 2024), showed no significant change in India’s unemployment rate, which remained at 3.2% in 2023-24 after five years of reduction.

The total youth unemployment rate stands at 10.2%, with females at 11% and males at 9.8%, with an increase in the joblessness rate for women, up to 3.2% from 2.9% in the previous year.

Top 10 Indian states and UTs with the highest youth unemployment rate

Notably, UT Lakshadweep has the highest unemployment rate among those aged 15 to 29, standing at 36.2%, followed by Andaman and Nicobar Island, with an unemployment rate of 33.6%.

Kerala, the state with the highest literacy rate, has a 29.9% unemployment rate, with 47.1% of females and 19.3% of males, according to the survey.

Furthermore, Kerala trails behind other northern and northeastern states in terms of worker-population ratio (WPR), that is, the percentage of employed people in the population.

The findings of the research highlighted that 24 Indian states and union territories (UTs) had double-digit unemployment rates between July 2023 and June 2024.

Here are the top 10 Indian states/UTs with the highest unemployment rate:

Source: National Sample Survey Office (NSSO) | Ministry of Statistics and Program Implementation | Government Of India.
Reference: Periodic Labour Force Survey (PLFS) has released the data, calculated between July 2023 and June 2024.
Note: This data captures youth unemployment (age: 15-29 years) percentages in both rural and urban areas.

Top 10 Indian states and UTs with the lowest youth unemployment rate

Rank	Indian State/Union Territory	Male unemployed (%)	Female unemployed (%)	Total unemployed (%)
1	Madhya Pradesh	2.8	2.1	2.6
2	Gujarat	3.3	2.7	3.1
3	Jharkhand	4.8	1.5	3.6
4	Delhi	4.6	4.8	4.6
5	Chhattisgarh	6.6	5.8	6.3
6	Dadra & Nagar Haveli	7.8	3.7	6.6
7	Tripura	6.8	6.7	6.8
8	Sikkim	8.3	6.8	7.7
9	West Bengal	8.5	10	9
10	Uttar Pradesh	9.3	12.3	9.8

Source: National Sample Survey Office (NSSO) | Ministry of Statistics and Program Implementation | Government Of India.
Reference: Periodic Labour Force Survey (PLFS) for the period between July 2023 and June 2024
Note: This data captures youth unemployment (age: 15-29 years) percentages in both rural and urban areas.

Story continues below this ad

The survey reveals that India’s labour force participation rate (LFPR) has increased to 60.1% in 2023-24 from 57.9% in 022–23, with female LFPR rising from 37.0% to 41.7% and male LFPR increasing from 78.5% to 78.8%.

Top 10 | Richest Indian cities in 2024

However, the Indian economy is facing challenges in job creation, struggling to generate sufficient employment opportunities for its rapidly growing workforce.

Status of unemployment of youths and adults in India. (Source: India Employment Report 2024, Institute for Human Development and International Labour Organisation)

Citigroup Inc. has indicated that India will need to create approximately 12 million jobs each year over the next decade to accommodate the influx of new labour market entrants.

This situation points to a slowdown in improvements within the labour market, as the current rate of job generation falls short of meeting future demands.