Even as unemployment falls, lack of ‘decent work’ in India

India’sunemployment rate fell from 6.1% in 2017-18 to 3.2% in 2023-24. At the same time, female workforce participation increased for the first time in decades as has been widely reported in government documents. In light of these positive developments, it is the right time to ask what kind of jobs have been generated in India recently, and what working conditions accompany them.

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This is important because employment alone does not inherently ensure dignity, security, or a stable livelihood. A worker engaged in garment sewing without a formal contract, a gig worker without insurance coverage, or a construction labourer without paid leave may technically be considered employed, but they remain outside the promise of decent work. The International Labour Organization (ILO) defines ‘decent work’ as employment that offers equitable income, workplace rights, social security and dignity. This principle is integrated into Sustainable Development Goal 8 (SDG-8), which advocates “decent work for all”. Measured this way, India’s labour market persistently exhibits high levels of informality, insecure employment, and increasing inequalities.

Measuring decent work

Using two rounds of the Periodic Labour Force Survey (PLFS), 2017-18 and 2023-24, the quality of employment in India has been analysed. By constructing a multidimensional Decent Work Index (DWI) based on three subdimensions — employment status, employment opportunity, and social security — across five major industries (agriculture, manufacturing, construction, wholesale and retail, and transport), it was observed that India has made progress in improving work conditions over time. The overall DWI increased from 0.247 in 2017-18 to 0.302 in 2023-24. While this indicates some improvement in job quality, the overall level remains alarmingly low. More importantly, progress has been uneven across sectors, regions, gender and caste groups.

Manufacturing in the secondary sector and transport in the tertiary sector showed the highest improvement in decent work conditions during this period. The manufacturing sector’s DWI increased from 0.324 to 0.411 due to a gradual rise in formalisation and digitalisation. The transport sector also experienced significant progress (from 0.285 to 0.35), largely due to the expansion of urban logistics and app-based platform work.

The social security gap

However, these improvements also reveal an important concern. Even in sectors where employment conditions have improved, access to social security remains limited. A large number of workers still do not have written contracts, paid leave, provident fund benefits or insurance coverage. Though employment opportunities are increasing, labour protections and job security are not improving at the same pace. Agriculture, which continues to employ the largest share of India’s workforce, remains the lowest-quality employment generating sector. The agricultural sector’s DWI marginally increased from 0.211 to 0.267 during the study period; most agricultural workers continue to be self-employed or unpaid family workers without stable income or labour protections. The issue is not merely low productivity; rather it is the rise of informal jobs. Construction and retail sectors tell a similar story. Workers remain dependent on casual employment, subcontracting chains and insecure labour arrangements. Welfare schemes exist on paper but implementation gaps continue to exclude millions of workers.

Nearly 90% of India’s workforce remains informally employed, a share that has risen since 2019, according to the India Employment Report 2024 (ILO–IHD). It has expanded into supply chains, app-based work in the gig and platform economy, logistics, home-based production, and in even organised industries through contractualisation and outsourcing.

Who gets left out

The challenge becomes even more serious when viewed in the context of social inequality. The analysis by the authors shows that decent work outcomes improve significantly with education, formal enterprise employment and skill training. However, informalisation of jobs reduces decent work creation in India over time. Especially concerning is the growing intersection of caste and gender disadvantage: women from Scheduled Tribes and Other Backward Classes experienced a decline in decent-work outcomes between 2017-18 and 2023-24, even as outcomes for men improved. The labour market penalty for being both female and socially marginalised has intensified after the COVID-19 pandemic. This shows that inequality in India’s labour market is not just economic, it is also structurally rooted in caste and gender hierarchies. 

Regional disparities further expose the uneven nature of labour market progress. States such as Goa, Keralam, Tamil Nadu, and Haryana perform substantially better in terms of decent-work creation; in contrast, Bihar, Jharkhand, and Uttar Pradesh continue to lag behind.

The findings point to a serious policy concern: while India has been able to create more jobs, it is still struggling to ensure that these jobs provide decent working conditions and security.

Poor-quality employment generation has consequences for economic growth. Workers without social security spend less, save less and remain vulnerable to economic shocks. Moreover, informality depresses productivity, weakens tax capacity, and increases inequality. India cannot measure labour market success only through reduction in unemployment rates and income growth. A country aspiring to become Viksit Bharat by 2047 cannot rely indefinitely on insecure, low-paid and unprotected labour. Economic growth without decent work can create a workforce that may have jobs, but still lives with insecurity, instability and a lack of protection. India has to shift from a ‘job-counting approach’ to a ‘job-quality approach’. 

The way forward

The findings point toward where policy should focus. First, social protection must extend to all workers — gig and platform workers, self-employed, farmers, and informal workers — through systems that are portable and accessible regardless of employment status. Platforms such as e-Shram are a good start, but registering alone does not guarantee protection; workers need real protection, not just a database entry.

Second, formalisation policies should focus on labour conditions, not just business registration. Enterprises receiving tax incentives or subsidies should be linked to mandatory worker protections such as written contracts, paid leave, and social security contributions.

Third, labour policies need to be more intersectional. Given that women from marginalised caste groups are the group whose outcomes worsened rather than improved, targeted measures — childcare facilities, safe transportation, skill training and safeguards against workplace discrimination — should not be an afterthought. Finally, labour reforms should be designed around the needs of workers first, rather than being framed primarily as a means of easing the cost of doing business.

The four Labour Codes were introduced in 2025 with the promise of simplifying labour regulation and expanding protections. However, implementation remains partial and inconsistent. Critics argue that while compliance has been eased for businesses, worker protections may have diminished with rising contractualisation.

The real test of development is not whether workers have some kind of work; it is whether that work provides dignity and security. Until then, India’s employment success story will remain incomplete — no nation can call itself developed while its workforce remains insecure. 

Anukriti Negi is Research Scholar, Department of Economics, Banaras Hindu University, Varanasi. Priyabrata Sahoo is Assistant Professor in the Department of Economics, Banaras Hindu University, and visiting Research Fellow to University of Leeds, United Kingdom. Santosh Kumar Dash is Assistant Professor at IRMA, “Tribhuvan” Sahkari University, Anand