India’s rapidly growing young population is largely considered a distinct advantage the country has as compared to most developed and less developed nations. The creation of employment opportunities is a mammoth task that ensures economic growth and social stability in addition to boosting consumer spending. The workforce in India is divided into three broad sectors: the agriculture and allied sector, industry, and service sector. Agriculture accounts for most of the workforce but is the lowest contributor to a country’s GDP.
Formalization of workforce
The general expectation about the country’s workforce distribution is a move from agriculture to industry and services, usually termed structural transformation by economists. Instead, agricultural laborers are moving towards low-paying and informal jobs. The official Period Labor Force Survey estimates most rural workers as self-employed or casual wage laborers. India has millions of migrant workers who move seasonally for prospective labor-intensive jobs that offer better pay than local employment. With no restriction on internal migration within the country, supported by the vast road and rail infrastructure, many workers commute across districts for employment, sometimes even daily. The informal sector is still largely considered the backbone of the Indian economy.
However, there has been a growing emphasis on the formalization of the workforce through the introduction of the Goods and Services Tax, the digitization of financial services, and other state initiatives. The government of India defines a formal job as providing access to at least one social security benefit as per the Task Force Report on Employment Statistics. Jobs in the organized sector provide better job security and earnings, besides being protected by labor laws. Government jobs are especially coveted due to social security and pension benefits. The Indian Ministry of Defense is the largest employer in the world.
Disparities in the employment game
Despite high economic growth and state initiatives, the country is struggling to create enough jobs, especially for the youth. In addition to unemployment, underemployment in the workforce, meaning employed people who are unable to get jobs befitting their qualifications, and end up working in low-skill and low-paying jobs, is also problematic.
While most of the country is aware of the unemployment woes, wage disparity is seldom noticed among workers in general, followed by a gender gap. The labor force participation among females grew by one percent and stood at around 24 percent in 2022. The disparity was massive in executive positions, and to address gender diversity, “The Companies Act of 2013” mandated a certain class of companies to have at least one woman- director on board. The essence of this mandate was lost when many companies circumvented this rule by appointing family members of the owners as women directors. Addressing these disparities will be crucial for India if it wants to meet its sustainable development goals (SDG) for 2030.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.