Jobs boom, question is quality

When the World Bank announced that India had lifted 17.1 crore people out of extreme poverty, it was the kind of headline that could define a decade. According to the Bank’s India Poverty and Equity Brief, the proportion of Indians living on less than $2.15 a day fell from 16.2 per cent in 2011–12 to just 2.3 per cent in 2022–23. The achievement, by any global standard, is staggering. For the first time, India’s poverty reduction has been both broad and deep, touching states and social groups that had long remained on the margins.

Rural poverty fell sharply from 18.4 per cent to 2.8 per cent, while urban poverty dropped from 10.7 to 1.1 per cent, narrowing the rural–urban gap from 7.7 to just 1.7 percentage points. Using the World Bank’s lower-middle-income threshold of $3.65 per day, poverty fell from 61.8 per cent to 28.1 per cent—meaning that 37.8 crore Indians rose above that line. The five most populous states—Uttar Pradesh, Maharashtra, Bihar, West Bengal, and Madhya Pradesh—were home to nearly two-thirds of India’s extreme poor in 2011–12, and they also accounted for two-thirds of the national reduction by 2022–23. These same states, however, still house over half of the country’s remaining poor, a reminder that economic progress is rarely uniform and that regional inequalities remain deeply entrenched.

India’s consumption-based Gini index, which measures inequality, improved modestly from 28.8 to 25.5 during the same period. Yet this measure may underestimate actual inequality. Data from the World Inequality Database paints a more complex picture: income inequality has risen from a Gini of 52 in 2004 to 62 in 2023, and the median income of the top ten per cent of earners is now 13 times that of the bottom ten per cent. The apparent contradiction—falling poverty alongside rising inequality—suggests that while millions have moved above the poverty line, many remain far from economic security. The threshold for “extreme poverty” is itself very low, and life above it can
still be precarious.

Alongside the poverty story, India’s employment picture appears upbeat. The Ministry of Labour and Employment reports that total employment rose from 47.5 crore in 2017–18 to 64.33 crore in 2023–24, an addition of 16.83 crore jobs in six years. The unemployment rate fell from 6 per cent to 3.2 per cent. At first glance, it looks like a textbook success: job growth outpacing population growth. But beneath the aggregate numbers lies a more complicated labour landscape.

Much of India’s employment expansion has occurred in self-employment and informal work. The share of self-employed workers rose from 52.2 per cent to 58.4 per cent between 2017–18 and 2023–24, while casual labour declined from 24.9 per cent to 19.8 per cent. This shift suggests a growing entrepreneurial spirit—but also, in many cases, a lack of stable wage opportunities. According to the World Bank, only 23 per cent of non-farm paid jobs in India are formal, while most agricultural employment remains informal. That means the majority of India’s workers still lack basic job security, social protection, or benefits such as provident fund and health insurance.

The rise in formalization, visible through EPFO payroll data, is nonetheless significant. Over 7.7 crore new subscribers have joined since 2017, including 1.29 crore in 2024–25 alone. In July 2025, 21 lakh new members were added, most of them under 25—a sign that young workers are entering the formal system. Still, the quality of formal jobs varies widely. Many “formal” contracts offer little more than the label, without the stability or pay traditionally associated with the formal sector. The average daily wage for casual labourers rose from Rs294 in 2017 to Rs433 in 2024, and monthly earnings for regular salaried workers increased from Rs16,538 to Rs 21,103. Wages have improved, but not nearly enough to keep pace with the rising cost of living in urban India.

Women’s participation in the workforce has improved dramatically, nearly doubling from 23.3 per cent in 2017–18 to 41.7 per cent in 2023–24. This resurgence marks one of the most encouraging social shifts of recent years, driven by targeted government initiatives such as Mission Shakti, Lakhpati Didi, and the Namo Drone Didi programme, which provide women with access to skills, credit, and technology. Yet, much of this female employment remains in low-paid, informal, or part-time sectors. Women’s work is increasingly visible, but it is still undervalued and underprotected. The gender gap in earnings remains vast: as the World Bank notes, 234 million more men than women hold paid jobs.

India’s booming startup ecosystem and gig economy have become new engines of work. The country now hosts nearly 1.9 lakh DPIIT-recognised startups and about 118 unicorns, generating an estimated 17 lakh direct jobs. The gig workforce, about one crore strong, is expected to more than double by 2030. Digital platforms have expanded opportunities for flexible work, particularly among young and skilled workers. Yet this flexibility often comes at the expense of security. Gig workers, like the informal labourers before them, remain outside most social safety nets, their incomes dependent on algorithms and demand cycles rather than contracts or collective bargaining.

These dynamics raise a larger question: is India’s current growth model producing good jobs? The short answer, economists warn, is no—not yet. While the number of jobs has grown, the quality of those jobs remains a concern. The mismatch between education and employability persists, with graduates struggling to find suitable work. Youth unemployment, officially at about 10 per cent, is far higher among degree-holders, reaching nearly 30 per cent in some surveys. Manufacturing—the traditional engine for middle-class job creation—has not absorbed labour at the pace required. Without stronger growth in high-productivity, labour-intensive sectors, the country risks settling into a low-wage equilibrium.

The government’s efforts to boost skilling and employment—through the Skill India Mission, Rozgar Melas, and new initiatives such as the Employment Linked Incentive Scheme and the Pradhan Mantri Viksit Bharat Rojgar Yojana—are important steps. Yet the real challenge is execution. Training millions of young Indians is not enough unless those skills match real market demand. India needs deeper coordination between education, industry, and labour policy. It also needs better data. While the Periodic Labour Force Survey offers a broad picture, it still misses nuances such as underemployment, multiple jobholding, and informal benefits.

The broader question, then, is whether the recent gains can endure. Poverty reduction, in itself, is not the end of the story—it is the beginning of a new one. The real test will be whether India can convert its demographic dividend into sustained, inclusive prosperity.