India’s Shift Towards Decent Work

India’s Shift Towards Decent Work

Syllabus

GS 3: Employment

Why in the News?

Recently, India’s falling unemployment rate and rising female workforce participation have renewed debate about whether new jobs provide security, fair pay, and dignity.

Introduction

• India’s unemployment rate declined from 1% in 2017–18 to 3.2% in 2023–24. Female workforce participation also increased after decades of decline.
• These developments are encouraging, but they do not reveal whether jobs provide security, fair wages, or dignity.
• India must therefore examine employment quality alongside job creation.

Understanding Decent Work

• Employment alone does not guarantee a secure livelihood, because many workers lack contracts, insurance, paid leave, or stable earnings.
• A garment worker sewing without a formal agreement may be employed, yet remain without reliable protection.
• Similarly, gig workers without insurance and construction workers without paid leave remain exposed to serious financial risks.
• The International Labour Organization (ILO) describes decent work as employment offering fair income, workplace rights, social security, and dignity.
• This principle is reflected in Sustainable Development Goal 8, which calls for decent work for everyone.
• India’s labour market continues to show widespread informality, insecure employment, and growing inequality, despite improvements in employment numbers.

Measuring the Quality of Employment

Decent Work Index

• Researchers examined two rounds of the Periodic Labour Force Survey (PLFS), covering 2017–18 and 2023–24.
• They created a Decent Work Index (DWI) using three areas: employment status, employment opportunities, and social security.
• The analysis covered five major industries: agriculture, manufacturing, construction, wholesale and retail, and transport.
• India’s overall DWI rose from 247 in 2017–18 to 0.302 in 2023–24, showing some improvement.
• However, the overall score remains low, while progress differs across sectors, regions, gender groups, and caste groups.

Differences Across Sectors

• Manufacturing recorded the largest improvement among the sectors studied, with its DWI rising from 324 to 0.411.
• This improvement was linked to gradual formalisation and greater use of digital systems within manufacturing activities.
• Transport also improved, as its DWI increased from 285 to 0.350, partly through urban logistics and app-based work.
• Yet, workers in these sectors often lack written contracts, paid leave, provident fund benefits, and insurance coverage.
• Job opportunities are increasing faster than labour protections, leaving many workers without stable conditions or meaningful security.
• Agriculture remains the lowest-quality employment sector, despite continuing to employ the largest share of India’s workforce.
• Its DWI rose only from 211 to 0.267, while many workers remained self-employed or unpaid family workers.
• Such workers often lack regular earnings, formal contracts, and labour protections, making their livelihoods uncertain.
• Construction and retail show similar weaknesses, as workers depend heavily on casual jobs, subcontracting, and insecure arrangements.
• Welfare schemes may exist, but gaps in delivery continue to leave millions of workers outside effective protection.

Informal Work and Its Expansion

• The India Employment Report 2024, prepared by the ILO and the Institute for Human Development, estimates that nearly 90% of workers remain informal.
• The report also indicates that this share has increased since 2019, despite wider attention to formal employment.
• Informality now extends across supply chains, app-based platform work, logistics, home-based production, and even organised industries.
• Contractual hiring and outsourcing have also spread informal conditions into workplaces that may otherwise appear formally organised.
• Therefore, business registration alone cannot show whether workers enjoy secure employment, fair treatment, and social protection.

Social Inequality in the Labour Market

Education, Skills, Caste, and Gender

• The study finds that decent-work outcomes improve with education, formal enterprise employment, and access to skill training.
• In contrast, increasing informalisation weakens the creation of decent work over time.
• The effects are especially serious for women facing both gender and social disadvantage.
• Women from Scheduled Tribes and Other Backward Classes experienced declining decent-work outcomes between 2017–18 and 2023–24.
• Outcomes for men improved during the same period, widening the gap between groups.
• The disadvantage linked to being both female and socially marginalised became stronger after the COVID-19 pandemic.
• These findings suggest that labour-market inequality is not only economic, but also shaped by caste and gender structures.

Regional Differences in Decent Work

• Decent-work opportunities vary widely across Indian states, showing that national progress does not benefit every region equally.
• Goa, Keralam, Tamil Nadu, and Haryana perform comparatively better in creating decent-work conditions.
• Bihar, Jharkhand, and Uttar Pradesh continue to face greater difficulties in providing quality employment.
• Such regional gaps require policies suited to local labour markets, worker skills, and economic conditions.

Why Job Quality Matters for Development

• The findings raise a major policy concern: India is creating jobs but still struggles to ensure decent working conditions.
• Workers without social security often spend and save less, while remaining vulnerable to illness, job loss, and other shocks.
• Informal employment can also reduce productivity, weaken tax collection, and increase inequality across society.
• Therefore, unemployment rates and income growth alone cannot provide a complete picture of labour-market success.
• India’s goal of becoming Viksit Bharat by 2047 requires secure, fairly paid, and protected work.
• Growth based on insecure employment may leave workers with jobs but without stability, dignity, or reliable protection.
• India must move from a job-counting approach to a job-quality approach, placing working conditions at the centre of development.

Way Forward

Extend Social Protection

• Social protection should cover gig workers, platform workers, self-employed people, farmers, and informal workers, regardless of employment status.
• Benefits should be portable and easy to access when workers change employers, locations, or types of work.
• e-Shram is a useful starting point, but registration alone does not provide workers with actual protection.
• Workers need accessible benefits, reliable support, and clear ways to claim their entitlements.

Link Formalisation With Worker Rights

• Formalisation policies should focus on working conditions rather than treating business registration as the final goal.
• Enterprises receiving tax benefits or subsidies should provide written contracts, paid leave, and social security contributions.
• This approach can make public support serve workers as well as businesses.

Address Caste and Gender Barriers

• Labour policies must recognise that women from marginalised caste groups face specific and overlapping barriers.
• Childcare, safe transport, skill training, and protection against workplace discrimination should become core parts of employment policy.
• These measures should not be treated as optional additions to wider labour reforms.

Put Workers at the Centre

• Labour reforms should be designed around workers’ needs, rather than mainly reducing the cost of doing business.
• The four Labour Codes were introduced in 2025, promising simpler regulation and wider worker protection.
• However, implementation remains partial and inconsistent, according to the supplied passage.
• Critics argue that easier business compliance may have weakened protections while contractual employment continues to expand.
• The real test will be whether these laws improve workers’ daily conditions and access to security.

Conclusion

India’s employment progress will remain incomplete until work provides dignity, security, and fair treatment. Development must be measured not only by jobs created, but by the protection workers receive.

Source: The Hindu

Mains Practice Question

Discuss how caste, gender, and regional inequalities affect access to decent employment in India. Suggest suitable measures.