Current Affairs · · GS3 · Economy

Unemployment has fallen, but decent work remains scarce in India

India's unemployment rate fell from 6.1% in 2017-18 to 3.2% in 2023-24, according to PLFS data. A Hindu opinion piece argues that job quality has not kept pace: most work remains informal, without contracts, social security or fair conditions. A Decent Work Index cited by the writer shows slow improvement, with agriculture lagging.

Event date:

REq1
  1. Note1 / 5

    WHY IN NEWS?

    • PLFS data show India's unemployment rate fell from 6.1% in 2017-18 to 3.2% in 2023-24.
    • A Hindu opinion piece argues that this has not translated into decent work.
    • It cites an analysis of PLFS data using a Decent Work Index that rose only modestly, from about 0.25 to 0.30 on a 0–1 scale.
    • Agriculture scored lowest; manufacturing improved more.
    • Women, marginalised castes and informal workers face the biggest gaps.
  2. Note2 / 5

    WHAT IS DECENT WORK?

    The ILO defines decent work as productive work in conditions of freedom, equity, security and dignity. It rests on four pillars:

    PillarMeaning
    EmploymentEnough productive jobs with fair income
    Rights at workContracts, fair wages, safe workplaces, freedom to organise
    Social protectionHealth, pension, accident and maternity cover
    Social dialogueA voice for workers in decisions

    Low unemployment can coexist with jobs that fail these tests.

  3. Note3 / 5

    KEY CONCEPTS

    1. What is the PLFS?

    The Periodic Labour Force Survey, run by the National Statistics Office, tracks employment, unemployment and labour force participation.

    1. Why can unemployment be low in a poor economy?

    Many people cannot afford to stay jobless. They take any work, often informal, low-paid or unpaid family work, so they are counted as employed.

    1. What is informal employment?

    Work without a written contract, paid leave or social security. Most Indian workers are informally employed.

    1. What did the labour codes change?

    From 21 November 2025, four codes replaced 29 central labour laws, aiming to simplify rules and widen social security.

  4. Note4 / 5

    WHY DECENT WORK IS SCARCE

    These points are the writer's argument.

    • Slow structural change: A large share of workers remain in low-productivity agriculture.
    • Skill gaps: Few working-age people have formal vocational training.
    • Small firms: MSMEs lacking credit and technology hire informally.
    • Gender barriers: Childcare and unsafe transport keep women out of paid work.
    • Youth: Young people form most of the unemployed, pointing to a skills–jobs mismatch.
    • Weak enforcement: Subcontracting and violations undermine protections.
  5. Note5 / 5

    WAY FORWARD

    These are the writer's suggestions, not adopted policy.

    • Extend social protection to informal, migrant and gig workers, with real benefits, not just registration.
    • Grow labour-intensive industries such as textiles, footwear and food processing.
    • Link incentives to job quality — contracts, timely wages and social security.
    • Support women's work through childcare, safe transport and equal pay.
    • Protect gig workers with fair pay and transparent algorithms, as Rajasthan's 2023 law attempts.
    • Invest in skills for apprenticeships and digital work.

Sources

Syllabus

PaperSubjectSub-topic
GS3EconomyEmployment, inclusive growth, labour reforms
GS2Social JusticeWelfare of vulnerable sections
PrelimsEconomyPLFS, ILO decent work agenda, labour codes, PM-SYM, PM-VBRY

Topics

Human Development and Sustainable DevelopmentImportant Economic ConceptsImportant Indexes and ReportsIndustry

Related previous-year questions

Asked in earlier UPSC Prelims papers on this topic. Answer, then check.

  1. UPSC Prelims 2013 · Indian Economy · Economic Growth

    Disguised unemployment generally means:

    1. Large number of people remain unemployed
    2. Alternative employment is not available
    3. Marginal productivity of labour is zero
    4. Productivity of workers is low
    Show answer

    Answer: C. Correct Answer: Marginal productivity of labour is zero According to the official UPSC Answer Key for Prelims 2013, the correct option is marginal productivity of labour is zero. Disguised unemployment occurs when more people are engaged in work than actually required. Even if some workers are removed, total output does not fall. Explanation 1. Marginal productivity of labour is zero — Correct Marginal productivity means the extra output produced by one additional worker. In disguised unemployment, extra workers do not add to total production. So, their marginal productivity is zero. 2. Workers appear employed but do not add output — Correct It is called disguised because people seem to be working, but their contribution to production is negligible or zero. This is common in small family farms where more family members work than required. 3. Mainly found in agriculture — Correct Disguised unemployment is most common in the agricultural sector of developing countries like India. It occurs due to population pressure on land and lack of alternative jobs in industry and services. Extra UPSC Info * Disguised unemployment is also called hidden unemployment. * It is common in rural India and family-based farming. * Surplus labour can be shifted from agriculture to industry without reducing farm output. * It reflects underemployment, not open unemployment. * Structural unemployment is due to skill-job mismatch. * Frictional unemployment occurs when a person is temporarily searching for a new job. Final Takeaway Disguised unemployment means surplus workers are employed, but their marginal productivity is zero because total output remains unchanged even if they are removed.

    Difficulty: medium · direct

    Open this question on its own page, with the full explanation →

Practice questions

  1. The ILO's decent work agenda rests on four pillars. Which of the following is NOT one of them?

    1. Employment creation
    2. Rights at work
    3. Social protection
    4. Trade liberalisation
    Show answer

    Answer: D. The fourth pillar is social dialogue.

    Difficulty: easy · statement

  2. India's four labour codes came into force on:

    1. 1 April 2023
    2. 21 November 2025
    3. 1 July 2024
    4. 26 January 2026
    Show answer

    Answer: B. They replaced 29 central labour laws.

    Difficulty: medium · statement

  3. Under PM Shram Yogi Maan-dhan, eligible unorganised workers receive an assured monthly pension of:

    1. ₹1,000
    2. ₹2,000
    3. ₹3,000
    4. ₹5,000
    Show answer

    Answer: C. It starts at age 60.

    Difficulty: medium · statement

Mains practice

Answer-writing practice on this article. Attempt it first, then open the hints.

  1. GS3 · 250 words

    "India's challenge is not jobs, but good jobs." Discuss with reference to employment quality and the decent work agenda.

    Show hints
    1. Falling unemployment, informality
    2. social protection, structural change
    3. skills, gender
    4. gig work, labour codes