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

Poor-quality employment generation has consequences for economic growth; workers without social security spend less, save less and remain vulnerable to economic shocks

Updated - November 02, 2026 12:57 am IST

‘Even in sectors where employment conditions have improved, access to social security remains limited.’ | Photo Credit: Getty Images/iStockphoto

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.

Also read | Understanding inequality in India’s growth story

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.

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.

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.

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.