India’s jobs problem: India has three distinct employment problems. There are too few desirable formal private-sector jobs. Government jobs attract an extraordinary number of applicants even though public employment accounts for only a small share of total employment. And a large number of people who are counted as employed are in work that provides limited income, security or prospects for advancement.
The latest National Career Service data illustrates why the unemployment rate cannot tell the whole story. Vacancies listed on the government’s NCS portal fell 62% month-on-month to 196,773 in June 2026, the lowest level in 30 months, according to an analysis of the portal data. The June figure was 72% below the level a year earlier.
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The number should be treated with caution. NCS is a job-matching platform, not a census of vacancies across the Indian economy. Its numbers depend on which employers use the portal, how vacancies are added and removed, and how listings from other employment systems are incorporated. The Labour Ministry said in August that more than 17.68 lakh active vacancies were available on the portal as of July 15. The difference between the June current-vacancy figure and the broader stock reported by the ministry underlines the need to understand exactly what each NCS measure captures.
The June data nevertheless raises a useful question about the labour market. The number of active employers registered on NCS more than doubled to 1.54 million from 702,000 in May even as listed vacancies fell sharply. Registration does not mean that an employer is hiring, and a vacancy listed on the portal does not necessarily result in a placement. A parliamentary standing committee has asked the Labour Ministry to track actual placements through NCS, including by sector and state.
That is important because India’s employment position cannot be assessed simply by counting registrations, vacancies or applications. The quality and durability of the jobs being created matter as much as the number.
Low unemployment does not mean secure employment
The official labour-force data provides a more useful starting point. The Periodic Labour Force Survey for 2025 put the unemployment rate for people aged 15 years and above at 3.1%. Youth unemployment among those aged 15-29 was 9.9%, while unemployment among people with secondary education or above was 6.5%. At the same time, the proportion of workers in regular wage or salaried employment increased from 22.4% in 2024 to 23.6% in 2025.
The last figure deserves more attention. If only 23.6% of workers are in regular wage or salaried employment, a low unemployment rate cannot be taken to mean that most Indians have access to stable salaried work.
In 2025, 56.2% of workers were classified as self-employed and 20.2% as casual labour. The self-employed category covers very different economic circumstances. It includes business owners and farmers as well as people working in household enterprises or running small roadside businesses. There is nothing inherently inferior about self-employment. A successful entrepreneur or shopkeeper can earn considerably more than a salaried worker.
The concern arises when self-employment reflects a lack of alternatives rather than a choice based on opportunity. Someone who cannot find a suitable salaried job may sell vegetables from a cart, help in a family business or take up irregular work because those are the options available. The PLFS numbers do not distinguish between these circumstances.
India’s labour market also remains overwhelmingly informal. The International Labour Organisation estimated in its India Employment Report 2024 that about 90% of workers were in informal employment. Informality is associated with lower earnings and limited access to social protection and employment security, although the report also documented improvements in several employment indicators.
This is where the distinction between employment and a good job becomes important. A person may have worked for enough time to be classified as employed while still searching for a more secure position. A graduate may hold a temporary job while preparing for a government examination. A young person may run a small business while waiting for a salaried position. Someone moving from one short-term contract to another may remain employed without developing a stable career.
The unemployment rate is not designed to capture these differences. Its purpose is to measure whether people are working or actively seeking work according to defined statistical criteria. It does not tell us whether their earnings are sufficient, whether they have social protection or whether the job gives them a reasonable prospect of higher income.
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Why government jobs command such competition
The attraction of government employment is easier to understand against this backdrop.
Indian Railways said in July that recruitment was under way for 161,889 non-gazetted positions under its annual recruitment calendars for 2024, 2025 and 2026. About 4.5 crore candidates appeared in computer-based railway recruitment examinations during the 2024 and 2025 examination cycles. The Railways reported 5.56 lakh recruitments between 2014-15 and June 2026.
These figures do not establish that government jobs are more desirable than private jobs for every worker. They do show the scale of competition for a limited number of positions.
Security is a major part of the attraction. A regular income, formal employment status and access to employment-linked benefits provide a degree of predictability that many workers do not find in informal or insecure employment. For a young person from a household with limited financial reserves, that predictability can have substantial economic value.
This also explains why comparing government vacancies with private-sector vacancies is the wrong test. Government employment can never absorb the millions entering the labour market. The private sector has to provide most of the additional employment as India’s working-age population expands.
The issue is therefore not that the government should create enough jobs to satisfy the demand for public employment. It is that private employment needs to offer a sufficiently attractive combination of wages, security and career prospects for workers to regard it as a viable long-term option.
Education has raised aspirations faster than employment opportunities
The problem is particularly visible among educated young people.
The State of Working India 2026 report by Azim Premji University estimates that graduate unemployment among 15-25-year-olds is nearly 40%, compared with 20% among those aged 25-29. It also finds that the number of graduates has grown much faster than graduate employment. Between 2004-05 and 2023, roughly five million graduates were added each year, while about 2.8 million found employment, with a smaller number entering salaried work.
This is not evidence that higher education has ceased to pay. Graduate salaries remain substantially higher than those of non-graduates when they enter employment, and the earnings gap widens over time. The difficulty is getting from a degree to a job that uses the acquired skills and provides a reasonable career path.
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That gap has consequences beyond unemployment. A graduate who accepts work well below the level of his or her qualifications may be employed but still dissatisfied with the labour market. Another may spend several years preparing for competitive examinations. A third may leave the formal labour market altogether and enter a family enterprise.
The resulting mismatch is not simply a problem of skills. Employers need to create jobs that make productive use of those skills, while the education system needs to respond to changing demand. Training programmes can help workers adapt, but training cannot compensate for a shortage of productive enterprises willing and able to employ them.
There has been progress in the composition of employment. The PLFS shows that the share of regular wage and salaried workers rose to 23.6% in 2025 from 22.4% a year earlier. The share of self-employment declined from 57.5% to 56.2%, while casual labour remained broadly unchanged at about one-fifth of employment. Agriculture’s share of employment also fell from 44.8% to 43%, while manufacturing rose from 11.6% to 12.1%.
These shifts are consistent with gradual structural change. They do not, however, resolve the central question of whether enough productive, secure jobs are being created for workers moving into the labour market.
India’s jobs problem: The measure of success has to change
India’s jobs debate has been dominated by one question: how many jobs are being created? That is necessary, but insufficient.
The more consequential questions are what workers earn, how predictable that income is, whether they have social protection and whether they can acquire skills that increase their productivity and wages. For women, the question also includes whether employment can be sustained through marriage, childbirth and other interruptions that contribute to India’s low female labour-force participation.
The answer cannot be to expand government employment indefinitely. Nor can it be to treat any form of self-employment as evidence that the labour market is functioning well. The policy objective has to be a larger pool of productive private employment, with enough security and income growth to make those jobs credible alternatives to government positions.
That would change the significance of the government’s vacancy numbers. A young Indian would still be free to compete for a railway or civil-service job, but would have other employment options worth choosing. A graduate would not have to spend years waiting for a secure public-sector position because the private labour market offered little else. A person counted as self-employed would have a better chance of being there because of opportunity rather than necessity.
India’s unemployment rate may remain low while this adjustment is under way. That is why the headline rate should not be the sole measure of progress. The harder test is whether economic growth is converting a growing workforce into jobs that provide the income, security and productivity gains needed for sustained upward mobility.