Hyderabad: Telangana is among the top three major states in India with an unemployment rate of 5% for individuals aged 15 and above, according to a state-wise analysis based on the Periodic Labour Force Survey (PLFS) 2025. The Ecowrap report highlights that the state also performs strongly in terms of employment quality and labour force participation.
Regional Disparities in Unemployment
The analysis reveals significant regional disparities across the country. States such as Goa (8.3%), Punjab (5.3%), and Telangana (5%) reported unemployment rates well above the national average of 3.1%. In contrast, Gujarat (0.9%), Madhya Pradesh (1.5%), Karnataka (2.3%), and Chhattisgarh (2.3%) recorded relatively lower unemployment rates, indicating stronger employment generation and better labour market absorption.
Skills Mismatch in Telangana
Experts point out that Telangana’s higher unemployment rate may not necessarily reflect a shortage of jobs, but rather a growing skills mismatch. Krishan Reddy Chittedi, associate professor at the School of Economics, University of Hyderabad, said, “Over time, there has been a significant lull in the education and skill development sectors in the state. This could result in a substantial skills gap in the tech-driven employment ecosystem primarily centred around Hyderabad.”
Youth Unemployment Trends
Globally, the youth unemployment rate for the 15–24 age group is estimated at around 12.6% in 2025, according to the International Labour Organisation (ILO). This remains significantly higher than the overall global unemployment rate, underlining persistent challenges for young people. In India, the youth unemployment rate declined from 10.9% in PLFS 2022 to 10.3% in PLFS 2024, and further to 9.9% in PLFS 2025. Telangana’s numbers have remained broadly in line with the national trend.
Employment Quality and Labour Force Participation
To assess whether higher labour force participation translates into better employment quality, the analysis examined the Labour Force Participation Rate (LFPR) for individuals aged 15–59 and developed a Work Quality Index (WQI). The index was based on three employment protection indicators from the PLFS: written job contracts, paid leave, and access to social security benefits. A higher WQI reflects better employment quality.
According to the Ecowrap report, Telangana, Karnataka, Tamil Nadu, and Odisha rank high in both employment quality and labour force participation. In contrast, Uttar Pradesh, Bihar, and Punjab lag on both indicators, with lower participation rates and weaker employment quality. The report further noted that while Rajasthan and Chhattisgarh record relatively high labour force participation, the quality of employment remains poor, highlighting the urgent need to strengthen worker social security benefits in these states.
