The PLFS July 2025 shows India’s unemployment rate falling to 5.2% from 5.6% in June, signaling modest recovery. Yet, deep-rooted challenges persist which requires urgent reforms to harness the demographic dividend.

Structural Challenges Highlighted by PLFS 2025

1. Gender Disparities: Female LFPR remains 5% compared to men’s 57.4%. Urban women face both low participation (25.8%) and high unemployment (8.7%), reflecting barriers such as safety concerns, limited flexible work, and care responsibilities.
2. Rural-Urban Divide: LFPR is higher in rural areas (9%) than urban (50.7%), showing agriculture and informal activities continue to absorb labour while urban job creation lags.
3. Low Worker Population Ratio for Women: WPR for urban women is just 9%, pointing to underutilisation of half the workforce.
4. Dependence on Informal Sector: Both rural and urban workers face insecure, low-paying, unprotected jobs.
5. Youth Unemployment and Skill Gaps: Educated youth remain unemployed due to mismatch between skills and industry demand, and apprenticeships remain limited.

Policy Measures

1. Gender-Specific Interventions
   1. Adoption of gender-responsive budgeting and targeted women-centric skilling programmes.
   2. Strengthen MUDRA Yojana and Stand-Up India to promote women-led enterprises.
   3. Incentivise firms to employ women in the formal sector through tax and compliance benefits.
2. Rural Development Initiatives
   1. Expand MGNREGA with a focus on skilling and sustainable livelihood creation.
   2. Promote rural industrialisation via SFURTI to revive traditional industries.
   3. Enhance digital infrastructure in rural areas to enable remote work and digital livelihoods.
3. Skill Enhancement and Education
   1. Integrate vocational education with formal schooling through the Skill India Mission.
   2. Strengthen the National Skill Development Corporation (NSDC) to promote industry-relevant training.
   3. Implement women-focused skill development schemes in rural areas.
4. Youth Employment and Start-ups
   1. Expand the National Apprenticeship Promotion Scheme.
   2. Create supportive ecosystems for start-ups and innovation hubs, especially for women and youth.
   3. Align curricula with emerging job markets like green jobs, digital economy, and healthcare.
5. Social Security and Formalisation
   1. Expand coverage of ESIC, EPFO, and e-Shram portal to informal and gig workers.
   2. Promote formalisation of small enterprises with simplified labour compliance.

Examples and Success Stories

1. Kudumbashree (Kerala) shows how women-centric collectives can enhance economic participation.
2. Bangladesh’s garment sector demonstrates targeted policy success in women’s employment.
3. Schemes like Deen Dayal Upadhyaya Grameen Kaushalya Yojana highlight the potential of skill-based interventions for rural youth.

The PLFS July 2025 findings underline that while unemployment is declining, structural inequities remain entrenched. This requires a multi-pronged approach, with gender- sensitive budgeting, rural industrialisation, skill enhancement, and social security at its core. By placing women and youth at the centre of labour policies, India can bridge divides and realise its demographic dividend in a sustainable and inclusive manner.