JOHN DAYAL
India’s official data shows un employment at only about 3 to 3.5 per cent, suggesting that the country has largely over come its employment problem. The reality experienced by millions of Indians is different — marked by underemployment, low salaries, unpaid family la bour, temporary contracts, ir regular work, insecure self-em ployment and jobs that do not provide enough income to sup port a household. This gap between official em ployment figures and the quality of work available is contributing to frustration and unrest, par ticularly among educated young people who have spent years preparing for employment but remain unable to find secure and adequately paid work. The Periodic Labour Force Survey, conducted by the Nation al Statistical Office, is the govern ment’s principal measure of em ployment and unemployment. According to the PLFS annual report, the unemployment rate for people aged 15 and above was 3.1 per cent in 2025 under the usual status measure, the Labour Force Participation Rate stood at 59.3 per cent, while the Worker Population Ratio was 57.4 per cent.
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These figures were broadly stable compared with 2024 and followed a longer decline in un employment from 6 per cent in 2017–18. The PLFS is a large survey, follows established statistical procedures and uses definitions broadly aligned with Interna tional Labour Organisation standards, but more important question is whether the headline unemployment rate answers what citizens are actually asking when they speak of an employ ment crisis. Most people are asking whether Indians can find regu lar, adequately paid and reason ably secure work, while a labour survey may classify a person as employed even when that per son works briefly, receives no direct wage or remains engaged in an activity that produces little income. Under the Current Weekly Status measure, a person who works for at least one hour during the reference week may be treated as employed and a woman assisting without wages in a family shop, a young man helping intermittently on a fam ily farm or a person selling a few items on the roadside because no other work is available may all be counted as employed.
It creates a serious problem when the resulting rate is pre sented as proof that the employ ment crisis has eased. Statistical employment is not the same as economic security because a person may be em ployed according to the survey and still work too few hours, earn below the minimum wage, lack a written contract or remain dependent on relatives for basic expenses. In India, people cannot afford to remain entirely without work, and they accept whatever activ ity is available – driving rented vehicles, delivering food, under taking occasional construction work, and selling goods on pave ments. This helps explain the per sistent difference between the PLFS and the Centre for Moni toring Indian Economy. While the official annual rate was close to 3 per cent, CMIE recorded un employment at 7.7 per cent in April 2025, and its assessment of May 2026 said employment and the labour force had con tracted while the number of un employed people had increased.
These surveys use different sampling methods, reference pe riods and tests of labour market activity. CMIE generally applies a stricter test of whether a person is employed and actively par ticipating in the labour market, while PLFS captures a broader range of activity, especially un der its annual usual status meas ure. Together, they indicate that low open unemployment may coexist with widespread irregu lar, marginal and low-productiv ity employment. International evidence also supports a more cautious read ing. The ILO’s India Employment Report 2024 found that major labour market indicators dete riorated over the long period between 2000 and 2019 before improving thereafter. Yet it described the recent improvement as paradoxical because it coincided partly with periods of economic distress.
The International Labour Or ganisation report also drew at tention to the concentration of unemployment among educated young people and the continuing problems of employment quali ty, education and skills. The national average there fore conceals important differ ences — unemployment is con siderably higher among young people, graduates and urban women than among the popula tion as a whole, and in July 2025, official monthly data placed ur ban unemployment for people aged 15 to 29 at 19 per cent, compared with 5.2 per cent for the overall population. The employment crisis is con centrated among those entering the labour market with educa tion, expectations and a need for regular salaried work.
The quality of employment is equally important as large num bers of Indians are classified as self-employed, a term which may describe a successful busi ness owner, but it may also de scribe a street vendor, an unpaid family helper or a worker per forming irregular tasks because no salaried position is available. The same caution applies to temporary and platform-based work, called gig employment, which may provide useful in come, but commonly lack pre dictable wages, paid leave, social insurance and protection from sudden termination. This is why wages matter as much as job counts, because employment that does not pro vide sufficient income cannot be treated as evidence of a healthy labour market. Workers may be classified as employed while receiving less than the legally prescribed mini mum, working fewer hours than they need or holding several small jobs to meet basic expens es. The extraordinary demand for government employment provides one of the clearest in dications of labour market inse curity. Millions of applicants compete for limited positions in the rail ways, police, schools, public ad ministration and security forces, because these posts offer regu lar salaries, defined recruitment procedures, social protection and relative permanence, all of which are scarce in much of the private and informal economy. Recruitment delays, examina tion leaks and cancelled selec tion processes therefore gener ate intense anger, because for many applicants, a public exami nation represents years of study and considerable family expend iture and when a recruitment process fails, the consequences close one of the few available routes to secure employment. Similarly, strikes and protests do not prove that every partic ipant is unemployed, but they protesting their low wages, con tractual insecurity, weak labour protections and deteriorating working conditions. Their mobi lisation shows precisely why the headline unemployment rate is inadequate. A Reuters poll of 50 independ ent economists in July 2025 found that 37 regarded the offi cial unemployment measure as inaccurate or inadequate, their criticism centred not only on joblessness but also on under employment, stagnant wages and definitions that count mini mal activity as employment.
Economist Pranab Bardhan observed that people who must “scrounge around and do some thing” to survive are classified as employed, even when the eco nomic meaning of that work is doubtful. The PLFS remains indispen sable for analysing labour force participation, worker categories and changes over time, but its 3.1 per cent figure should not be used as a summary judgement on the health of India’s labour market. India must report the qual ity as well as the quantity of employment, and the headline rate should be read alongside youth and graduate unemploy ment, real wage growth, hours worked, minimum-wage com pliance, contractual security, social protection, public-sector vacancies and the number of workers seeking additional or better work. The official data does not cap ture the full reality of the labour market, which includes low sal aries, underemployment, unpaid work, insecure self-employment, temporary jobs and limited ac cess to stable salaried positions.
India’s employment challenge will not be resolved merely when most people can be shown to have performed some work, but when economic growth produces enough work that is productive, adequately paid and secure. (John Dayal is an author, Editor, occasional documenta ry film maker and activist)
