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Employment: Worker Classification, Jobless Growth and Casualisation

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Employment is work people do to produce goods or services. It may be paid or unpaid. Employment quality describes how secure, well paid and protected that work is. India’s jobs debate often counts jobs, but it must also measure job quality. Self-employed people count as workers, even when they earn no regular wage.
A railway porter (coolie) in India
A railway porter at work. A photograph alone does not show the worker’s employment status. Photo: Pulkit Lalwani, CC BY-SA 3.0, via Wikimedia Commons.

At a Glance

Four facts to hold on to.

01

WPR 2025

57.4% (usual status, age 15+).

02

Self-employed

56.2% of workers in 2025.

03

Regular salaried

23.6%.

04

Casual labour

20.2%.

WorkerA person in economic activity, including unpaid family work.
Usual statusWork in the last 365 days.
Jobless growthOutput rises much faster than jobs.
CasualisationA shift toward casual wage work.

Chapter 1: Jobs Versus Job Quality

Must Know

Who counts as a worker?

  • A worker is a person engaged in economic activity, including unpaid family work.
  • Business owners, farmers on their own land and small shopkeepers all count.
  • Rehana runs a small tailoring shop and earns from each order.
  • Her neighbour Suresh works on building sites and is paid only for days worked.
  • Both are workers in official statistics, but their income security and legal protection differ greatly.

Counts versus quality

  • Job counts show how many people work. Job quality shows the terms of that work.
  • Quality covers pay, job security, working hours, workplace safety and social protection.
  • Social protection means benefits like old-age pensions, health cover and paid leave.
  • An economy can add many jobs while most remain insecure and poorly paid.
  • That is why quality matters alongside the total number of jobs.
Remember: Count the jobs. Then check their quality.

True or False: The PLFS excludes self-employed workers from employment.

Chapter 2: Measuring Work with the PLFS

Must Know

Worker-population ratio

  • The worker-population ratio is the share of the population that is working.
  • It equals workers divided by total population, times 100.
  • For people aged 15 and above, the 2025 usual-status ratio was 57.4%.
  • So about 57 of every 100 people aged 15 and above were working.

The Periodic Labour Force Survey

  • The PLFS is India’s main official employment survey, run by MOSPI.
  • MOSPI publishes an annual report and monthly bulletins on selected indicators.
  • Usual status counts a person as working if employed during the last 365 days. It combines principal status (the main activity for most of the year) and subsidiary status (shorter spells).
  • Current weekly status counts a person as working if employed in the last seven days.
  • The latest full-year PLFS as of September 2026 is the 2025 annual report, covering January to December. It was released on 27 March 2026.
  • The PLFS changed its sample design from January 2025, so comparisons across that break are less certain.
  • MOSPI released the August 2026 monthly bulletin on 15 September 2026.
  • Read more: PLFS.

True or False: Usual status counts a person as working if employed during the last 365 days.

Chapter 3: The Three Worker Categories

Must Know

Worker status

  • Worker status is the kind of position a person holds in the labour market.
  • Self-employed: own and run a business, farm or enterprise. A shop owner, a tailor with her own machine and a farmer are examples.
  • Regular wage or salaried: paid at fixed intervals by an employer. A bank clerk and a school teacher are examples.
  • Casual labourers: paid for each day or task. A construction helper hired by the day is an example. Work often has no guarantee of future work or monthly pay.

2025 usual-status shares

  • Self-employed: 56.2% of all workers.
  • Regular wage and salaried: 23.6%. The 2024 survey placed it at 22.4%.
  • Casual labourers: 20.2%.

True or False: The 2025 PLFS shows casual labour is India’s largest worker category.

Chapter 4: Formal and Informal Work

Good to Know

A different idea

  • Formal and informal work is a different idea from worker status.
  • Formal work usually has employer records and some legal protections.
  • Informal work often lacks written terms or easy access to legal protections.
  • Sector of work groups activity by industry: agriculture, manufacturing or services.
  • These ideas can overlap. A regular salaried worker can do informal work in a small unregistered firm. A self-employed shop owner can work in the formal sector with registration.

A caveat

  • A simple textbook model puts public establishments and larger private firms in the formal sector.
  • This is a teaching device, not one universal legal threshold.
  • Different labour laws set different size and registration tests. A firm covered by one law may fall outside another.

The numbers

  • India had about 59 million formal-sector workers in 2019-20, out of about 535 million workers. That is a formal share of about 11%.
  • This is a historical teaching estimate, not a current legal count.
  • Formal workers often get a provident fund and a pension. A provident fund is a retirement savings scheme paid by worker and employer.
  • Informal workers may lack these protections and can earn less.
  • Read more: Organised and Unorganised Sectors of the Indian Economy.

True or False: Formal-sector status guarantees every worker every benefit automatically.

Chapter 5: Jobless Growth and Casualisation

Great to Know

Jobless growth

  • Jobless growth means output rises much faster than total employment.
  • It does not mean GDP is falling or that no jobs are created.
  • A series from 1951 to 2023 shows employment growth below output growth for much of that period.
  • Possible causes: more machines per worker and weak demand for labour.
  • The India Employment Report 2024 links weak job creation to slow structural change.
  • Structural change means workers moving from farming to industry and services.
  • Jobless growth and poor job quality can occur together.
  • Read more: Development and Structural Change Since Independence and Unemployment Types and the Employment Challenge.

Casualisation

  • Casualisation is a shift toward casual wage work, which often has less security.
  • Casual workers are paid by the day or task.
  • It can lower average job quality even when total employment rises.
  • They often lack income security, paid leave and social protection, and face greater risks of accidents and sudden income loss.
  • Worker-status data from 1972 to 2024 show self-employment stayed the largest category.
  • Casual wage work grew for decades before easing somewhat recently.

Case study: Ahmedabad textile mills

  • The mills once employed about 150,000 workers in relatively secure, well-paid jobs.
  • They closed over about a decade from the early 1980s.
  • About 80,000 permanent workers lost their jobs. Over 50,000 non-permanent workers also lost theirs.
  • Many displaced workers moved into informal work, and many fell into poverty.
  • The city saw recession and widespread distress.
  • It shows that sudden industrial job loss can damage a whole city’s economy.
  • Read more: Population Composition and Occupational Structure.
Think it through: Think it through: how can an economy add jobs yet job quality fall?

New jobs may be casual or informal. Count rises while pay, security and benefits stay low. Casualisation shows exactly this: more work, less protection.

True or False: Jobless growth means GDP is falling.

Chapter 6: Policy Timeline, 2025-26

Current Affairs

Labour Codes and gig workers

  • The four Labour Codes took effect across India on 21 November 2025.
  • The Code on Social Security, 2020 is one of them.
  • It includes protection for gig and platform workers.
  • A gig worker earns from short tasks arranged through a company. A platform worker finds work through an app or website.
  • Benefits depend on schemes the government notifies, and on eligibility rules.
  • The Code does not give every gig worker benefits automatically.

Rural work

  • The Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G) replaced the earlier rural work law, the MGNREGA of 2005.
  • It was enacted on 20 December 2025.
  • It raised the annual guarantee from 100 days to 125 days.
  • This is a policy change, not a measured PLFS outcome.
  • The 2026-27 Union Budget lists funding for states that have notified VB-G RAM G, and continues an MGNREGA component for rural wage employment.

Sources

True or False: The VB-G RAM G Act, 2025 raised the annual rural work guarantee from 100 to 125 days.

Quick Q&A

WPR 2025?

57.4%.

Largest category?

Self-employed, 56.2%.

Labour Codes in force?

21 Nov 2025.

Rural guarantee now?

125 days.

Ahmedabad mills closed from?

Early 1980s.

0 / 6 correct

🎲 Practice: Employment

5 verified questions from this topic.

Question 1 of 1

What is the worker-population ratio?

Question 1 of 1

Under India’s official worker classification, which category is considered the most vulnerable of the three?

Question 1 of 1

Under NCERT’s formal-informal sector rule, a private establishment counts as part of the formal sector only if it employs at least how many hired workers?

Question 1 of 1

What does the term ‘jobless growth’ describe in the Indian economy?

Question 1 of 1

NCERT’s Ahmedabad textile mills case study is used to illustrate which concept?
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