Despite falling unemployment, India lacks decent work and social security

According to the marquee report, India’s unemployment rate fell from 6.1% in 2017-18 to 3.2% in 2023-24. As widely reported in government documents, female labour force participation also rose over the same period, for the first time in decades. In light of this positive development, it is an appropriate time to ask what kind of jobs have recently been created in India and what working conditions are associated with them.

This matters because employment does not automatically guarantee dignity, security, or a stable livelihood. A garment worker engaged in stitching without a formal contract, a gig worker without insurance coverage, or a construction labourer without paid leave may technically be counted as employed, but they remain excluded from the promise of decent work. The International Labour Organization (ILO) defines decent work as employment that provides fair income, workplace rights, social security, and dignity. This principle is embodied in Sustainable Development Goal 8 (SDG-8), which advocates for "decent work for all". Measured this way, India’s labour market continues to exhibit high levels of informality, insecure employment, and growing inequality.

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) across five key industries (agriculture, manufacturing, construction, wholesale and retail trade, and transport) based on three sub-dimensions — employment status, employment opportunity, and social security — it is observed that India has made progress in improving working conditions over time. The overall DWI increased from 0.247 in 2017-18 to 0.302 in 2023-24. This indicates a slight improvement in job quality, although the overall level remains concerningly low. More importantly, progress has been uneven across sectors, regions, genders, and caste groups.

Manufacturing in the secondary sector and transport in the tertiary sector showed the greatest improvement in decent work conditions over this period. Driven by incremental increases in formality and digitalisation, manufacturing’s DWI rose from 0.324 to 0.411. Transport also experienced notable progress (0.285 to 0.35) due to the expansion of urban logistics and app-based platform work.

However, these improvements also point to a critical concern. Even in sectors where employment conditions have improved, access to social security remains limited. A large number of workers still lack written contracts, paid leave, provident fund benefits, or insurance coverage. While employment opportunities are growing, labour security and job security are not improving at the same pace. Agriculture, which continues to employ the largest share of India’s workforce, is the lowest-quality job-generating sector. The DWI for the agricultural sector increased marginally from 0.211 to 0.267 during the study period; the vast majority of agricultural workers remain self-employed or unpaid family workers without a stable income or labour security. The issue is not merely one of low productivity; rather, it is the proliferation 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 flaws continue to exclude millions of workers.

According to the India Employment Report 2024 (ILO-IHD), nearly 90% of India’s workforce is informally employed, an increase since 2019. It has expanded across supply chains, app-based work in the gig and platform economy, logistics, home-based production, and even into formal enterprises through contracting and outsourcing.

This challenge becomes more severe when viewed through the lens of social inequality. Analysis conducted by the authors reveals that education, formal enterprise employment, and skill training significantly improve decent work outcomes. However, the informalisation of jobs dampens decent work creation in India over time. Particularly concerning is the deepening intersection of caste and gender disadvantage: women belonging to 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 post-COVID-19 pandemic. This shows that inequality in India’s labour market is not merely economic; it is structurally embedded in caste and gender hierarchies.

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

These findings point to a serious policy conundrum: while India has been able to generate more jobs, it has struggled to ensure that these jobs provide decent working conditions and security.

The creation of poor-quality employment has consequences for economic growth. Workers without social security spend less, save less, and remain vulnerable to economic shocks. Furthermore, informality depresses productivity, undermines tax capacity, and exacerbates inequality. India cannot measure labour market success solely by a falling unemployment rate and income growth. A country aspiring to become a developed nation ('Viksit Bharat') by 2047 cannot indefinitely rely on precarious, low-paying, and insecure labour. Economic growth without decent work can produce a workforce that may have jobs, but still lives with insecurity, volatility, and a lack of safety. India must switch from a 'jobs-count approach' to a 'job-quality approach'.

Findings point to where policy must focus. First, social security must be extended to all workers — gig and platform workers, the self-employed, farmers, and informal workers — through systems that are portable and accessible regardless of employment status. Platforms like e-shram are a good start, but registration alone does not guarantee security; workers need real security, not just database entries.

Second, formalisation policies must focus on labour conditions, not just enterprise registration. Enterprises receiving tax incentives or subsidies should be tied 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 demographic whose outcomes worsened rather than improved, targeted measures — childcare facilities, safe transport, skills training, and protection against workplace discrimination — must not be an afterthought.

Finally, labour reforms must be designed around the needs of workers first, rather than crafted primarily as a tool to ease the cost of doing business.

The Four Labour Codes were introduced in 2025 with the promise of streamlining labour regulation and expanding security. However, implementation remains partial and inconsistent. Critics argue that while compliance has been eased for businesses, worker security may have declined with rising contract work.

The real test of development is not whether workers have some work or another; 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.

This article has been written by Anukriti Negi, a research scholar in the Department of Economics at Banaras Hindu University, Varanasi; Priyabrata Sahu, an assistant professor in the Department of Economics at Banaras Hindu University and a visiting research fellow at the University of Leeds, United Kingdom; and Santosh Kumar Dash, an assistant professor at IRMA, Anand (“Tribhuvandas” Cooperative University).