India's unemployment rate drastically dropped to 6.43% in September due to an increase in labour participation in the rural and urban areas, according to data from the Centre for Monitoring Indian Economy (CMIE).
During August, India's unemployment rate surged to a one-year high of 8.3% as employment sequentially fell by 2 million to 394.6 million.
"In September, the unemployment rate has fallen significantly with an increase in labour participation in both urban and rural areas," CMIE managing director Mahesh Vyas told PTI over the phone on Saturday.
The unemployment rate in the rural areas fell to 5.84% in September from 7.68% in August, while in the urban areas it dropped to 7.7% against 9.57% in the previous month, according to the data.
The almost-8 million increase in labour participation is a sign that the economy of the country is doing well, Mr. Vyas added.
According to the CMIE data, the unemployment rate was the highest in Rajasthan at 23.8% in September, followed by Jammu and Kashmir at 23.2%, Haryana at 22.9%, Tripura at 17%, Jharkhand at 12.2% and Bihar at 11.4%.
Unemployment was the lowest in Chhattisgarh at 0.1% in September, followed by Assam at 0.4%the data showed.
In August, the unemployment rate had surged to a one-year high as erratic rainfall, which impacted sowing activities, affected employment in rural India. In that month, urban unemployment rate had shot up to 9.6% while rural unemployment also increased to 7.7%, CMIE data showed.