India’s jobs data: India will mark its centenary of independence in two decades. For a country that aspires to join the ranks of developed nations, removing structural bottlenecks must be the foremost priority. Among these, unemployment remains the most pressing, with serious implications for growth. The challenge is not merely creating jobs, but ensuring they are meaningful and secure.
The latest Periodic Labour Force Survey (PLFS) data from the National Statistics Office shows the unemployment rate fell to 5.1% in August 2025, the lowest in four months. Rural areas drove much of this decline, helped by seasonal agricultural activity and a modest rise in labour force participation. Rural joblessness dropped to 4.3%, its lowest this fiscal year. Urban unemployment also eased, from 7.2% in July to 6.7% in August.
READ | RBI’s rupee defence could hurt Indian economy
Yet, the gains are uneven. Men’s unemployment fell to 5%, but women’s rose slightly to 5.2%. Youth joblessness remains worryingly high at 14.6%, with young women facing 17.8% unemployment compared to 13.5% for men. These figures underscore structural divides in the labour market.
Seasonal and informal work
Much of the apparent progress is tied to agricultural cycles, which provide temporary relief rather than sustained employment. Once sowing or harvesting seasons pass, rural workers often return to underemployment or joblessness. Economists caution that headline numbers disguise the fragility of India’s labour market, where a large share of work remains seasonal, informal, and poorly paid.
In a country where the majority are employed in low-paying, insecure jobs, being “employed” often amounts to survival rather than upward mobility. The persistent gap between statistical improvements and lived reality highlights the weakness of India’s employment structure.
Limits of labour data
India’s official statistics themselves are an imperfect guide. The PLFS relies on the Current Weekly Status method, which counts someone as unemployed only if they did not work even for an hour in the reference week but were seeking work. This narrow definition overlooks underemployment, irregular work, and poor-quality jobs.
The PLFS also introduced a new rotational panel sampling design in January 2025, visiting households four times over consecutive months. While this has improved timeliness, it complicates comparisons with earlier data and struggles to capture intermittent or informal work. Many discouraged workers, no longer seeking jobs, drop out of the labour force entirely and disappear from the statistics.
Jobs data: Structural fault lines
The aggregate national rate hides deep imbalances. Youth, especially young women, face far higher joblessness, reflecting a lack of stable entry points into the workforce. The survey also says little about job quality — whether work provides a living wage, steady hours, or social protection. This omission matters in a country where more than 80% of employment is informal and lacks security.
Thus, while the August PLFS numbers suggest some resilience, they do not show a labour market on firm footing. The risk of misinterpretation is high when temporary agricultural absorption or statistical quirks drive short-term improvement.
Another blind spot in the employment debate is the mismatch between education and employability. India produces millions of graduates each year, including over a million engineers, yet industry surveys consistently flag deficits in digital, analytical, and communication skills. Vocational training remains underdeveloped, with only a small fraction of the workforce formally trained, compared with more than half in advanced economies.
This disconnect feeds into persistently high youth unemployment, as qualifications often fail to translate into market-ready skills. Unless the education system aligns more closely with the demands of industry, India’s much-vaunted demographic dividend will struggle to pay off.
Technology and the future of work
Equally pressing is the challenge posed by technology. Automation, artificial intelligence, and digital platforms are reshaping work across sectors, reducing the demand for routine, low-skill tasks while raising the premium on specialised capabilities. For a workforce dominated by informal and low-paid jobs, the risk of displacement is significant. Yet technology also offers opportunities in new areas — from clean energy and electric mobility to digital services and healthcare.
Realising this potential will require policy measures that combine investment in technology adoption with robust safety nets and large-scale retraining programmes. The test for India lies in ensuring that technological transformation creates inclusive, broad-based employment rather than deepening inequality.
India’s path to becoming a developed economy cannot rest on fragile job gains. Policymakers must look beyond headline unemployment rates and focus on structural reforms: diversifying employment away from agriculture, promoting labour-intensive manufacturing, enabling services expansion, and ensuring women’s greater participation.
Above all, the goal must be to create secure, remunerative, and dignified jobs. Without tackling underemployment, low-quality work, and gender disparities, India’s centenary dreams will remain unfulfilled. The PLFS data may provide comfort, but not clarity. What India needs is not just jobs, but livelihoods that offer stability and hope.