Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Employment in India - statistics & facts
India鈥檚 rapidly growing young population is largely considered a distinct advantage the country has as compared to most developed and less developed nations. The creation of employment opportunities is a mammoth task that ensures economic growth and social stability in addition to boosting consumer spending. The workforce in India is divided into three broad sectors: the agriculture and allied sector, industry, and service sector. Agriculture accounts for most of the workforce but is the lowest contributor to a country鈥檚 GDP.
However, there has been a growing emphasis on the formalization of the workforce through the introduction of the Goods and Services Tax, the digitization of financial services, and other state initiatives. The government of India defines a formal job as providing access to at least one social security benefit as per the Task Force Report on Employment Statistics. Jobs in the organized sector provide better job security and earnings, besides being protected by labor laws. Thereby government jobs are especially coveted due to social security and pension benefits. The Indian Ministry of Defense is one of the largest employer in the world.
While most of the country is aware of the鈥痷nemployment woes, wage disparity and gender gap are the key issues among the employed population. Although female labor force participation grew by over four percent and stood at over 32 percent in 2023, it still lags behind male labor force participation. The disparity is substantial in executive positions, where only 6 percent of women hold top managerial positions, one of the lowest in Asia-Pacific.
India鈥檚 job challenge is stark. The country is already attracting businesses as part of the 鈥淐hina plus One鈥 strategy creating factory jobs for low-skilled workers as part of Make in India initiatives. Creating more jobs is the obvious goal, however, a greater focus on high-skill and high-pay employment opportunities is expected to benefit the country from the rising global trade in higher-value services.
Formalization of workforce
The general expectation about the country鈥檚 workforce distribution is a move from agriculture to industry and services, usually termed structural transformation by economists. Instead, agricultural laborers are moving towards low-paying and informal jobs. The official Period Labor Force Survey estimates most rural workers as self-employed or casual wage laborers. India has millions of migrant workers who move seasonally for prospective labor-intensive jobs that offer better pay than local employment. With no restriction on internal migration within the country, supported by the vast road and rail infrastructure, many workers commute across districts for employment, sometimes even daily. The informal sector is still largely considered the backbone of the Indian economy.However, there has been a growing emphasis on the formalization of the workforce through the introduction of the Goods and Services Tax, the digitization of financial services, and other state initiatives. The government of India defines a formal job as providing access to at least one social security benefit as per the Task Force Report on Employment Statistics. Jobs in the organized sector provide better job security and earnings, besides being protected by labor laws. Thereby government jobs are especially coveted due to social security and pension benefits. The Indian Ministry of Defense is one of the largest employer in the world.
Disparities in the employment game
Despite high economic growth and state initiatives, the country is struggling to create enough jobs, especially for the youth. In addition to unemployment, underemployment in the workforce, meaning employed people unable to get jobs befitting their qualifications, and end up working in low-skill and low-paying jobs, is also problematic. many highly skilled individuals seek jobs abroadWhile most of the country is aware of the鈥痷nemployment woes, wage disparity and gender gap are the key issues among the employed population. Although female labor force participation grew by over four percent and stood at over 32 percent in 2023, it still lags behind male labor force participation. The disparity is substantial in executive positions, where only 6 percent of women hold top managerial positions, one of the lowest in Asia-Pacific.
India鈥檚 job challenge is stark. The country is already attracting businesses as part of the 鈥淐hina plus One鈥 strategy creating factory jobs for low-skilled workers as part of Make in India initiatives. Creating more jobs is the obvious goal, however, a greater focus on high-skill and high-pay employment opportunities is expected to benefit the country from the rising global trade in higher-value services.
