Executive Summary

India Employment Report 2024

Key findings and policy pointers at a glance.

Labour Market Youth Employment Policy

Source: ILO–IHD, India Employment Report 2024 (Executive Summary) · License: CC BY 4.0

Key Findings

India has exhibited resilience in economic growth, but the employment challenge remains formidable. The employment situation has not changed much despite sustained high economic growth, and the country still faces a major employment challenge.

The India Employment Report 2024, a joint publication by the International Labour Organization (ILO) and the Institute for Human Development (IHD), examines India's labour market over the past two decades with a focus on youth employment, education and skills. The report identifies several critical trends:

Slow structural transformation: The share of agriculture in employment fell from 60% in 2000 to 42% in 2019, but manufacturing's share remained stagnant at 12–14%. Most labour shifted to construction and services, not manufacturing.
Rising unemployment: Open unemployment increased from 2% in 2000 to 5.8% in 2019, before declining to 4.1% in 2022. Youth unemployment (ages 15–29) rose from 5.7% in 2000 to 17.5% in 2019.
Persistent informality: Informal employment accounted for 90.3% of all workers in 2022, with only 9.7% in formal employment. Even among those in regular salaried work, 53% had no written job contract.
Gender disparities: The female labour force participation rate (LFPR) was 32.8% in 2022, among the lowest globally. The gender gap in workforce participation remained substantial.
Quality of employment: Real wages stagnated for regular and self-employed workers, with female workers experiencing higher negative growth. Minimum wage compliance remained low, with 62% of workers not receiving minimum wages.
COVID-19 impact: The pandemic caused a sharp reversal in labour market trends. While employment indicators recovered by 2022, the quality of employment deteriorated, with most new jobs in self-employment, particularly unpaid family work.
Education mismatch: Despite rising educational attainment, unemployment was higher among the more educated. The share of educated youth (secondary and above) among the unemployed increased from 35.2% in 2000 to 65.7% in 2022.
Regional disparities: Wide variation in employment conditions across states, with the Employment Condition Index showing Delhi at the top and Jharkhand at the bottom among 20 major states.

Policy Pointers

The report identifies five key policy areas to address India's employment challenges:

1. Accelerate structural transformation

Promote manufacturing-led growth to absorb labour moving out of agriculture. Address the stagnant manufacturing share through targeted industrial policy and investment in labour-intensive sectors.

2. Improve employment quality

Strengthen labour market institutions, enforce minimum wage compliance, and promote formalization of employment. Address the high share of informal and vulnerable employment.

3. Reduce labour market inequalities

Close gender gaps in workforce participation, address regional disparities through targeted interventions, and improve employment conditions for marginalized groups.

4. Align education and skills with market needs

Reform education and training systems to reduce the skills mismatch. Improve the quality and relevance of vocational training and apprenticeship programs.

5. Address youth employment challenges

Targeted policies for youth unemployment, including active labour market policies, job search assistance, and entrepreneurship support. Address the rising unemployment among educated youth.

Employment Condition Index

The report introduces an Employment Condition Index (ECI) that ranks 20 major states based on multiple indicators including employment status, wages, and labour market outcomes. The index reveals significant regional disparities:

Top performers: Delhi (0.695), Punjab (0.620), Himachal Pradesh (0.615)
Bottom performers: Jharkhand (0.344), Bihar (0.356), Uttar Pradesh (0.367)
Key insight: Southern and western states generally perform better than eastern and northern states, reflecting the uneven development of India's labour market.