Employment: Worker Classification, Jobless Growth and Casualisation

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.

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.

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%.

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.

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.

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

• NCERT, Indian Economic Development: Employment
• MOSPI press note: PLFS 2025
• MOSPI: PLFS Annual Report 2025
• MOSPI release calendar
• ILO: India Employment Report 2024
• PIB: implementation of the four Labour Codes
• India Code: Code on Social Security, 2020
• Ministry of Labour: January 2026 commencement guidance
• Economic Survey 2025-26: rural employment chapter
• Union Budget 2026-27: Demands for Grants