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

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. 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.

Poor-quality employment generation has consequences for economic growth. Workers without social security spend less, save less and remain vulnerable to economic shocks. Moreover, informality depresses productivity, weakens tax capacity, and increases inequality.

India cannot measure labour market success only through reduction in unemployment rates and income growth. A country aspiring to become Viksit Bharat by 2047 cannot rely indefinitely on insecure, low-paid and unprotected labour.

Economic growth without decent work can create a workforce that may have jobs, but still lives with insecurity, instability and a lack of protection. India has to shift from a ‘job-counting approach’ to a ‘job-quality approach’.

The findings point toward where policy should focus. First, social protection must extend to all workers — gig and platform workers, self-employed, farmers, and informal workers — through systems that are portable and accessible regardless of employment status.

Platforms such as e-Shram are a good start, but registering alone does not guarantee protection; workers need real protection, not just a database entry. Third, labour policies need to be more intersectional. Given that women from marginalised caste groups are the group whose outcomes worsened rather than improved, targeted measures — childcare facilities, safe transportation, skill training and safeguards against workplace discrimination — should not be an afterthought.

Finally, labour reforms should be designed around the needs of workers first, rather than being framed primarily as a means of easing the cost of doing business. The four Labour Codes were introduced in 2025 with the promise of simplifying labour regulation and expanding protections.

However, implementation remains partial and inconsistent. Critics argue that while compliance has been eased for businesses, worker protections may have diminished with rising contractualisation. The real test of development is not whether workers have some kind of work; 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. Anukriti Negi is Research Scholar, Department of Economics, Banaras Hindu University, Varanasi.

Priyabrata Sahoo is Assistant Professor in the Department of Economics, Banaras Hindu University, and visiting Research Fellow to University of Leeds, United Kingdom. Santosh Kumar Dash is Assistant Professor at IRMA, “Tribhuvan” Sahkari University, Anand