Employment rate targeting must be at the heart of Indian policymaking

The labour participation rate in September at 40.7% was 199 basis points lower than the average labour participation rate of 42.7% in 2019-20

Labour market statistics improved somewhat in September 2020. The unemployment rate fell sharply from 8.4 per cent in August to 6.7 per cent. This is the lowest unemployment rate in 18 months. More importantly, the employment rate scaled up to almost 38 per cent from 37.5 per cent in August. This is its highest level since the lockdown. It has more than recovered from its small fall last month. These are big and welcome gains.

But, there is the odd case of the labour participation rate that declined in September. This fell from 41 per cent in August to 40.7