India faces significant employment imbalances across sectors, with agriculture still employing about 40% of the workforce despite its contribution dropping from 36% of GDP in 1980-81 to 16% in 2023-24, while services expand their GDP share but create fewer jobs.

The sectoral employment distribution remains uneven, with agriculture, services, manufacturing, and construction employing 40%, 32%, 13%, and 14% of the workforce respectively, highlighting sluggish non-agricultural job creation relative to GDP growth.

Despite economic growth, real wages have stagnated or declined, with a nearly 3% fall between 2021-22 and 2022-23, especially in the formal sector, while casual workers have seen wage increases, pointing to issues with productivity and job quality.

Although India's economy has grown steadily over the past two decades, with per capita income rising around 5% annually, employment growth has lagged at just 1.6% per year, underscoring the need to create approximately 8 million non-farm jobs annually until 2030.

Labour productivity remains among the lowest globally at US$10.7 per hour, with most non-agricultural workers employed in small, less productive firms, emphasizing the importance of policies that promote formal sector growth, investment, and infrastructure.

High unemployment persists among educated youth, with two-fifths of 15-24-year-olds with graduate degrees unemployed due to skills mismatch, inadequate skilling programs, and poor foundational education.

Female labour force participation remains low at around 34%, significantly below other lower middle-income countries, driven by social norms, domestic responsibilities, safety concerns, and discrimination, with rural women participating more but often in low-productivity, unpaid work.

A large portion of the workforce lacks social protection, with only about 37% of urban non-agricultural workers having formal contracts, health benefits, or social security, making many vulnerable, especially amid the rise of the gig economy.

Regional disparities are stark, with states like Goa and Kerala having up to 94% of their workforce in non-agricultural sectors, while others like Bihar and Uttar Pradesh lag at around 50%, necessitating policies to promote migration, regional development, and balanced growth.

Addressing India's employment challenges requires a comprehensive approach focusing on increasing participation, improving productivity, extending social protection, and debating policies on sector priorities, reforms, skilling, gender inclusion, regional development, and migration.