India clocked 8.2% real GDP growth in FY24, and the rolling decade average now sits near six per cent—lower than the “nearly eight per cent” pace of the mid-2000s to early-2010s. That slowdown is real, but the more important question is whether each point of growth now converts into jobs. The answer can be yes—if policy targets the employment intensity of growth rather than the size of the number alone.
On the labour side, the annual survey shows an unemployment rate (15+) around 3.2% and a rising labour-force participation rate close to 60% in 2023–24, with youth unemployment still materially higher (about 10% in the 15–29 cohort). A new monthly series introduced in 2025 has printed national unemployment near 5% in recent months, with urban rates higher than rural. Taken together, the message is clear: job creation must broaden beyond a few metros and sectors, and it must do so fast enough to absorb young entrants and women who are re-entering work.
The last few years have added momentum in electronics, autos and renewables. The next leg must deepen localisation (tooling, components, testing) while scaling labour-intensive lines—textiles and apparel, footwear, furniture, toys. Incentives should reward net new formal jobs and value-added per worker, not just capex. Predictable tariffs, time-bound duty drawback, serviced land with reliable utilities, and efficient ports/logistics will matter more than sporadic subsidies. When manufacturing expands along these lines, employment responds.
India’s urban build-out—affordable/rental housing, transit, water and sanitation, climate-resilient infrastructure—can absorb millions while lifting productivity across the economy. Three pivots unlock this engine: (1) denser, transit-oriented development and land release; (2) single-window approvals that actually clear on time; (3) clean, digital public procurement so MSME contractors get paid and scale. Wrap the build-out with portable social security and on-site skilling, and construction becomes a genuine ladder from informality to security.
The services base is diversifying into global capability centres, design, legal support, telemedicine, education tech, and a long-underused jobs flywheel: tourism. What these need most is friction removal—cross-border data rules with privacy safeguards, faster work visas and qualification recognition with key partners, and livable cities so talent clusters without crushing commute and housing costs. Tourism can spread employment geographically if last-mile connectivity and site management keep pace.
Female participation has risen meaningfully from its trough but remains the single largest untapped lever. The policy recipe is well known: affordable childcare and eldercare, visible safety and reliable transport, clear rules for flexible/home/platform work, and transparency (large employers should publish gender-disaggregated hiring and retention). Every percentage-point rise in women’s participation delivers an outsized gain for growth, household welfare and the tax base.
Micro and small firms create most new jobs but are often squeezed by compliance and cash-flow risk. Make formalisation pay: (i) cash-flow lending off authenticated GST/e-invoice/UPI data; (ii) universal access to invoice discounting so bills don’t starve working capital; (iii) fast, low-cost e-dispute resolution; and (iv) a first-hire support that offsets statutory contributions for a firm’s first set of formal employees. Standardised, digital apprenticeships—tied to completion and absorption—should become the default bridge from classroom to workplace.
Treat skills as a stack: recognise prior learning, build modular micro-credentials that stack into qualifications, and align the stack with local industry clusters. Fund training on outcomes (placement, median earnings and 6–12 month retention), not seat-time. A national open job-matching exchange that aggregates state exchanges and private boards—anchored in verifiable digital credentials—will cut search frictions for both firms and workers and lift the employment response to growth.
Raising rural incomes is a jobs strategy twice over. First, diversify toward dairy, fisheries, horticulture and food processing, which are more employment-intensive than cereals. Second, provide smooth exit paths—reformed tenancy, stronger farmer-producer organisations, and nearby non-farm opportunities—so disguised unemployment can move without distress. Cold chains and stable, rules-based trade policies will reduce waste and unlock processing jobs.
If designed deliberately, climate action is a labour-absorbing growth engine: manufacturing of solar modules, batteries and electrolysers; retrofitting buildings for energy efficiency; greening railways and ports; restoring watersheds and mangroves. Public tenders can specify local skilling and certified “green jobs” outcomes without ossifying into box-ticking quotas. Blending carbon markets with concessional finance will crowd in private capital for these projects.
Investors hire when rules are clear and enforced. Priorities: time-bound commercial courts, stable GST with simpler compliance, and clarity/consistency in labour codes. Shift the administrative culture from permission to accountability: compliance that’s simple to follow, swift penalties for wilful violations, and no criminalisation of honest error. Trade and technology policy should give firms a five-to-seven-year runway on tariffs, standards and data rules so they can invest—and expand payrolls—with confidence.
Keep the debate honest with transparent, method-consistent labour statistics. The annual survey (which captures usual activity) should remain the anchor, complemented by the monthly series for early signals. Each release should carry a short “data note” explaining concepts and revisions in plain English. When citizens trust the numbers, they will trust the narrative—and support the reforms that sustain it.
India’s demographic window is not closed, but windows narrow if we drift. The choice is between a respectable growth rate that feels like jobless expansion, and one where each point of GDP pulls in workers because the economy is wired for employment intensity. With pragmatic reforms in manufacturing, urbanisation, MSMEs, women’s work and the green economy, seven-ish per cent growth can deliver ten-ish per cent worth of employment impact. That is the realistic, optimistic path: a decade of growth that shows up in payslips, not just PowerPoint.