Why in the News
India’s unemployment rate fell from 6.1% in 2017-18 to 3.2% in 2023-24, and female workforce participation rose for the first time in decades. A Decent Work Index built from official survey data shows that job quality improved far more slowly, so India must shift from a “job-counting approach” to a “job-quality approach”.
What is decent work, and how was it measured?
- Decent work: The International Labour Organization (ILO) defines it as employment offering equitable income, workplace rights, social security and dignity. Sustainable Development Goal 8 (SDG-8) commits countries to “decent work for all”.
- Employed but unprotected: A garment worker without a contract, a gig worker without insurance or a construction labourer without paid leave counts as employed, without decent work.
- Decent Work Index (DWI): The authors scored jobs in five industries on employment status, employment opportunity and social security, using two rounds of the official Periodic Labour Force Survey (PLFS).
- Overall score: The index rose from 0.247 to 0.302 between the two rounds, an improvement from an alarmingly low level.
- The takeaway: A falling unemployment rate shows that more people work, not that their work protects them.
Which sectors and regions have improved?
- Manufacturing: Its index rose from 0.324 to 0.411, the largest gain, because work in the sector is gradually becoming more formal and digital.
- Transport: Its index rose from 0.285 to 0.35, mainly from the growth of urban logistics and app-based platform work.
- Agriculture: It employs the most workers but remains the lowest-quality sector, rising only from 0.211 to 0.267. Most farm workers are self-employed or unpaid family workers.
- Construction and retail: Workers depend on casual jobs and subcontracting chains, and implementation gaps keep welfare schemes from reaching millions.
- Regional gap: Goa, Keralam, Tamil Nadu and Haryana create decent work substantially better than Bihar, Jharkhand and Uttar Pradesh.
Why does informality matter so much?
- Informal majority: Nearly 90% of the workforce is informally employed, a share rising since 2019, according to the India Employment Report 2024 of the ILO and the Institute for Human Development (IHD).
- Where it has spread: Informality runs through supply chains, platform work, logistics and home-based production, and into organised industries via contract hiring.
- Missing protections: Many workers lack written contracts, paid leave, provident fund benefits or insurance, so protection lags job growth.
- Economic cost: Informality hurts the wider economy:
- workers without social security spend less and save less;
- productivity falls and the state’s tax capacity weakens;
- inequality rises, a weak base for Viksit Bharat, the goal of a developed India by 2047.
Who is left furthest behind?
- Caste and gender: Women from Scheduled Tribes and Other Backward Classes saw decent work outcomes decline between the two survey rounds, even as outcomes for men improved.
- Post-pandemic penalty: The penalty for being both female and socially marginalised has grown since the COVID-19 pandemic.
- What helps: Decent work outcomes improve significantly with education, formal enterprise employment and skill training.
- Structural roots: Caste and gender hierarchies, not only incomes, shape who gets decent work.
Challenges
- Registration without protection: e-Shram, the national database of unorganised workers, records workers but does not by itself deliver benefits to them.
- Partial Labour Codes: The four Labour Codes, introduced in 2025 to simplify rules and widen protection, are being implemented partially and inconsistently.
- Rising contract work: Critics say the reforms eased compliance for business. Worker protections weakened as firms hired more workers on contract.
Way Forward
- Portable social protection: Extend benefits that move with the worker to gig and platform workers, the self-employed, farmers and informal workers.
- Conditional incentives: Link tax incentives and subsidies to written contracts, paid leave and social security, so formalisation improves job conditions.
- Intersectional support: Provide childcare, safe transport, skilling and anti-discrimination safeguards for women from marginalised castes.
- Worker-first reform: Design labour reforms around workers’ needs, not mainly to ease business costs.
Conclusion
India has added jobs faster than it has made them secure. What remains open is whether protection follows the worker and whether job quality becomes an official yardstick.
Government Initiatives for Formalising Work
- Pradhan Mantri Shram Yogi Maan-dhan: It pays unorganised workers a pension of ₹3,000 a month after age 60.
- Appointment letters: The Occupational Safety, Health and Working Conditions Code, 2020 makes a formal appointment letter a legal requirement for every employee.
- Pradhan Mantri Viksit Bharat Rozgar Yojana: This Employment Linked Incentive scheme has a ₹99,446 crore outlay and targets 3.5 crore jobs over two years.
Matching Previous Year Question
“No direct PYQ traced in the provided files. Thematic PYQ: [2023, GS3, 15 marks] Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.”
