Quality of Employment in India: Challenges, Inequalities and the Way Forward

Context

The PLFS (April–June 2026) reported labour force participation (15+) at 54.6%, rural unemployment at 4.8% and urban unemployment at 6.7%. The share of regular wage and salaried workers in rural areas increased to 16.1% from 15.5%.

Key Concepts

1. Labour Force Parameters:

• Labour Force: People who are employed or actively looking for work.
• LFPR (Labour Force Participation Rate): Percentage of the total population in the Labour Force.
• Unemployment Rate: Percentage of the Labour Force (not total population) that is unemployed.

1. PLFS (Periodic Labour Force Survey): Official employment survey conducted by the NSO (National Statistical Office) under MoSPI (Ministry of Statistics and Programme Implementation).
2. Decent Work: Concept by the ILO (International Labour Organization) emphasizing productive work, fair income, safe working conditions, social security, and labour rights.
3. Three Tests of Employment Quality:

• Employment: Availability of adequate and gainful work.
• Productivity: Effective use of workers’ skills and capabilities.
• Social Protection: Fair wages and security against health risks, accidents, and old age.

Major Challenges in Employment Generation

1. Slow Structural Transformation: Over 40% of the workforce remains in low-yielding agriculture, while manufacturing struggles to absorb them. This premature deindustrialisation restricts large-scale job creation for unskilled workers.
2. Neglected Labour-Intensive Sectors: High-employment industries like textiles, leather, footwear, food processing, and electronics assembly lack sufficient growth backing.
3. High Informalisation: About 85–90% of workers are in the informal economy without formal contracts or social security. Likewise, gig and platform workers lack access to health insurance and safety nets.
4. Skill Mismatch: A significant gap exists between what industries demand and the skills workers possess, compounded by limited formal vocational training.
5. Technology Disruption: Rapid advances in AI (Artificial Intelligence) and automation are altering traditional job roles, making constant upskilling and reskilling essential.

Inequalities in Employment

1. Gender Inequality: Despite rising Female LFPR (Labour Force Participation Rate), much work remains unpaid domestic care or informal farming. Heavy unpaid work, gender wage gaps, and occupational segregation (push into low-paying pink-collar jobs) restrict quality employment.
2. Intersectionality: Women from marginalised castes and poor rural backgrounds face combined social and economic barriers to formal jobs.
3. Regional Disparity: Industrial and service-sector growth is concentrated in a few states (e.g., Gujarat, Maharashtra, Tamil Nadu, Karnataka), driving uneven job distribution across India.
4. Distress Migration: Lack of local job opportunities forces workers from less-developed regions (e.g., Bihar and eastern India) to move. The concern is not spatial mobility, but movement driven by economic distress.

Government Initiatives for Employment Generation

1. Four Labour Codes: Consolidated 29 central labour laws into 4 simplified codes (Wages, Industrial Relations, Social Security, and Occupational Safety). The Code on Social Security formally includes gig and platform workers.
2. e-Shram Portal: National database for unorganised workers (over 31 crore registered, 54% women) to streamline targeted welfare scheme delivery.
3. UAN (Universal Account Number): Provides seamless portability of provident fund accounts under the EPFO (Employees’ Provident Fund Organisation) when switching jobs.
4. PM Viksit Bharat Rozgar Yojana: Delivers Employment-Linked Incentives (ELI) to lower corporate hiring costs and spur formal employment for first-time workers.
5. PLI (Production-Linked Incentive) Scheme: Offers financial incentives to expand domestic manufacturing and create large-scale industrial jobs.
6. PM Vishwakarma Scheme: Supports traditional artisans and craftspeople through skill training, low-interest credit, and direct market access.
7. Skill India & MSME Support: Advances vocational skill development and strengthens MSMEs (Micro, Small and Medium Enterprises) as major drivers of job creation.

Way Forward

1. Labour-Intensive Manufacturing: Boost high-employment sectors like textiles, footwear, leather, food processing, and electronics to create large-scale jobs for unskilled workers.
2. Social Protection: Extend health insurance, paid leave, and pension benefits to informal and gig workers through dedicated welfare models.
3. Women’s Employment: Expand childcare services, care infrastructure, and safe workplaces to reduce unpaid domestic work and boost Female LFPR (Labour Force Participation Rate).
4. Regional Balance: Incentivise industrial and service-sector growth in lagging states (e.g., Bihar and eastern India) to curb distress migration.
5. Skill Development: Align training programs with industry demands, scale up vocational training, and encourage continuous upskilling.
6. MSME Support: Simplify compliance, ease access to credit, and offer growth incentives to help MSMEs (Micro, Small and Medium Enterprises) expand and formalise.

FAQs

Q1. What is decent work?
Ans. ILO concept of productive employment with fair wages, job security, social protection and labour rights.

Q2. What is premature deindustrialisation?
Ans.  A decline in manufacturing employment before achieving high industrial development, limiting the shift to productive jobs.

Q3. Why is informal employment a problem even when unemployment is low?
Ans. Because informal workers often lack written contracts, paid leave, insurance, social security and stable income.

Q4. Why is rising female LFPR not necessarily good news?
 Ans. Because much of the increase may come from unpaid or informal work, while women continue to bear most care responsibilities.

Q5. What is distress migration?
 Ans. Migration driven by a lack of local employment opportunities and economic hardship rather than choice.