India’s labour market is no longer just clawing its way back. The Economic Survey 2025–26 suggests it is moving into a phase of sustained growth, with rising participation, falling unemployment and stronger job creation across sectors.
The Survey, tabled in Parliament on Thursday, paints a picture of improving employment quality alongside scale. Labour force participation has risen steadily, hiring conditions appear more predictable, and formalisation is deepening through social security coverage. Together, these signals point to a workforce that is expanding—and stabilising.
Women at work: a structural shift
One of the clearest signals of change is the sharp rise in women’s labour force participation—from 23.3% in 2017–18 to 41.7% in 2023–24.
Puneet Gupta, Partner, People Advisory Services – Tax, EY India, called this a structural turning point.
“The Economic Survey shows a remarkable rise in women’s labour force participation—from 23.3% in 2017-18 to 41.7% in 2023-24—indicating a structural shift in India’s labour market.”
For employers, he said, the shift unlocks a wider and more diverse talent pool at a time when new skills and perspectives are in demand. For women, it expands access to income, entrepreneurship and formal work—supported by falling unemployment and the growing share of female-headed enterprises. The implication is clear: gender inclusion is now an economic imperative, not just a social goal.
From recovery to expansion
Beyond participation, the Survey highlights improving employment fundamentals. Unemployment has eased, labour participation has strengthened and job creation has picked up across sectors.
Gupta said the data reflects a labour market moving into a steadier phase. For employers, it means a more reliable supply of prepared workers. For employees—especially women and youth—it signals stronger job attachment, better wage prospects and longer-term stability.
In short, India’s employment story is shifting from recovery mode to expansion.
Apprenticeships step into the spotlight
If there is one policy lever the Survey leans on heavily, it is apprenticeships. Over 43.47 lakh apprentices have been engaged under NAPS, with another 5.23 lakh under NATS, positioning work-based learning as a core employment strategy.
“The Survey is clear: apprenticeships are no longer supplementary—they are central to building a future-ready workforce,” Gupta said.
That view is shared by Dr. Nipun Sharma, CEO, TeamLease Degree Apprenticeship, who placed the labour data within a broader macroeconomic context.
“India’s Economic Survey 2025-26 reinforces a strong and reassuring macro picture,” Sharma said, noting India’s position as the fastest-growing major economy alongside improving fiscal discipline.
As AI adoption accelerates, Sharma argued that employability will hinge less on narrow technical skills and more on adaptability, judgement and hands-on capability. He pointed to talent shortages in healthcare, advanced manufacturing, public health and environmental services—sectors where technology alone cannot fill the gap.
Structured, work-based learning, he said, is essential to manage the structural risks of the AI transition.
Formalisation gathers pace—but gaps remain
The Survey also underscores rapid formalisation, reflected in rising EPFO additions, digital compliance systems and broader social security coverage. For employers, formalisation brings productivity gains and smoother compliance. For workers, it delivers predictable wages, portability and long-term financial security.
Ashok Varma, Partner and Inclusion Ecosystem Leader, Grant Thornton Bharat, described the Survey’s tone as one of “cautious pragmatism.”
“We can expect India to be the fastest growing major economy next year as well. This augurs well for the employment scenario,” he said.
Manufacturing and services are expected to drive growth, while agriculture provides stability. Varma also pointed to a quiet shift underway in rural employment—from dependence on employment guarantee schemes to private-sector-led opportunities.
Still, he flagged structural gaps. Only 1% of youth aged 14–18 have exposure to formal vocational training, a statistic that underscores the need to expand industry-driven skilling at school level.
Gig work, security—and the fine print
The Survey’s formal recognition of gig and platform workers within the social security framework marks a notable policy shift. Yet the numbers reveal vulnerability beneath the growth: around 40% of gig workers earn less than ₹15,000 a month, with income volatility limiting access to credit and stability.
Experts see recognition as a necessary first step—but not the end of the story. The challenge now is ensuring flexibility does not come at the cost of basic security.
Growth, but with guardrails
The Survey also widens the lens beyond jobs. Vishwas Chitale, Fellow, CEEW, said it reinforces the need to integrate climate adaptation into development planning.
“Nearly 60% of districts in India, which host two-thirds of India’s population, face risks due to extreme heat,” he said, underscoring the urgency of adaptation measures to protect livelihoods.
Taken together, the Economic Survey suggests India’s labour market has entered a more confident phase—beyond recovery, edging toward sustained growth. Rising participation, deeper formalisation and a renewed focus on apprenticeships point to momentum.
But experts are clear-eyed. Sustaining this shift will depend on how effectively growth is converted into capability—through skills, social security, climate resilience and the timely implementation of labour reforms.
The direction is promising. The execution will decide the outcome.