Even as unemployment falls, lack of ‘decent work’ in India

Decent work means employment that offers equitable income, workplace rights, social security and dignity. The idea comes from the International Labour Organization and is part of Sustainable Development Goal 8, which calls for decent work for all. It matters because employment alone does not guarantee a secure or dignified livelihood.

For example, a garment worker without a formal contract, a gig worker without insurance, or a construction labourer without paid leave is technically employed. Yet each may face unstable income, weak protection and limited rights. Their employment status does not ensure decent working conditions.

India’s Decent Work Index measures these conditions through employment status, employment opportunity and social security. The index rose from 0.247 in 2017-18 to 0.302 in 2023-24, but remained low. This shows that job creation and job quality can move at different speeds.

India’s unemployment rate declined from 6.1% in 2017-18 to 3.2% in 2023-24. That is a fall of 2.9 percentage points. Female workforce participation also increased for the first time in decades, according to government documents cited in the article.

Job quality improved more modestly. India’s overall Decent Work Index rose from 0.247 to 0.302, an increase of 0.055. The index combines employment status, employment opportunity and social security across agriculture, manufacturing, construction, wholesale and retail, and transport.

The two trends show why employment figures need careful reading. Fewer people were unemployed, but the overall level of decent work remained alarmingly low. Progress also differed by sector, region, gender and caste. More people may have found work without receiving equal improvements in security, rights or income stability.

Manufacturing and transport showed the largest improvements in decent-work conditions between 2017-18 and 2023-24. Manufacturing’s Decent Work Index rose from 0.324 to 0.411. Transport also improved, from 0.285 to 0.35. These sectors benefited from greater formalisation, digitalisation, urban logistics and app-based platform work.

Agriculture remained the lowest-quality employment sector, despite a rise in its index from 0.211 to 0.267. Most agricultural workers were still self-employed or unpaid family workers. They often lacked stable incomes and labour protections. Construction and retail showed similar weaknesses.

Their workers remained dependent on casual employment, subcontracting chains and insecure labour arrangements. Welfare schemes existed, but implementation gaps excluded millions. The pattern suggests that sectoral growth alone does not guarantee decent work. Stronger contracts, social security and enforcement are needed for improvements to reach workers consistently.

Unemployment measures whether people have work, not whether that work provides security or rights. A person can be counted as employed while working without a written contract, paid leave, provident fund benefits or insurance. This is why falling unemployment can coexist with poor job quality.

A construction worker hired through a subcontractor illustrates the gap. The worker may receive employment for a project but lack continuity, paid leave and protection against income loss. Similar conditions affect agricultural workers, retail workers and gig workers. Work exists, but protections do not keep pace.

The article finds that employment opportunities are increasing while labour protections and job security improve more slowly. Nearly 90% of India’s workforce remains informal. Welfare schemes exist, yet implementation gaps exclude millions. The key challenge is therefore not only creating jobs, but formalising them and extending effective social security.

Informal employment remains extremely widespread in India: nearly 90% of the workforce is informally employed, according to the India Employment Report 2024. The article also states that this share has risen since 2019. Informality means workers often lack stable contracts, social security and enforceable workplace protections.

It is no longer limited to traditional casual labour. It has expanded through supply chains, app-based gig and platform work, logistics, home-based production, and organised industries using contractualisation and outsourcing. A worker may therefore be connected to a modern company or digital platform while still lacking formal protections.

This broad reach makes informality a central labour-market issue. Manufacturing and transport improved their decent-work scores, but social security remained limited even in improving sectors. The challenge is to ensure that formalisation, insurance, contracts and other protections follow work into newer industries and employment models.

The article identifies a growing intersection of caste and gender disadvantage in India’s labour market. Women from Scheduled Tribes and Other Backward Classes experienced declines in decent-work outcomes between 2017-18 and 2023-24. This happened even as outcomes for men improved overall.

The pattern means that being both female and socially marginalised creates a stronger labour-market penalty. Informal work, limited protections and unequal access to opportunities can reinforce one another. The article also finds that decent-work outcomes improve with education, formal enterprise employment and skill training, while informalisation reduces decent-work creation.

These findings show that broad employment improvement does not reach every group equally. The post-COVID-19 period intensified the labour-market penalty for these women. Future progress therefore needs to address structural caste and gender hierarchies, alongside expanding education, skills, formal employment and effective social security.

Formal employment and social security strengthen a worker’s ability to manage economic shocks. Written contracts can clarify employment terms, while paid leave, insurance and provident fund benefits provide protection when work or income is disrupted. These supports also make it easier to plan household spending and longer-term savings.

The article highlights the opposite situation across agriculture, construction, retail and gig work. Workers often lack contracts, paid leave, insurance and stable income. Agricultural workers may be self-employed or unpaid family workers, while construction workers can depend on casual jobs and subcontracting chains. These conditions leave fewer reliable protections.

The article does not quantify effects on saving, spending or productivity, but it shows that social security is lagging behind employment growth. Improving formalisation and implementation could make work more resilient. It could also help workers and households plan with greater confidence, while supporting more stable participation in the economy.