India's jobs debate is usually dominated by one number: the unemployment rate. But a new SBI Research analysis of PLFS 2025 data argues that the more important story lies elsewhere — in job quality, wage protection, informality and the kind of work Indians are actually doing. The report, which uses PLFS unit-level data for the first time, paints a picture of an economy where employment has expanded, but stable and protected jobs remain far harder to come by.
At first glance, the headline numbers appear encouraging. India's labour force participation rate stood at 59.3% in 2025, largely stable compared with last year. Youth unemployment also eased to 9.9%, down from 10.9% in 2022.
But SBI Research argues that headline unemployment data may actually overstate labour market stress, particularly among younger Indians. The report says measuring unemployment among the 15–29 age group can distort reality because a large section is still in formal education. When the bank recalculated unemployment for the 30-plus population, the numbers dropped sharply. Urban male unemployment, for instance, fell from the PLFS-reported 11.8% to just 2.26% for the 30+ population.
Yet the bigger concern may not be unemployment at all. India's workforce remains overwhelmingly informal. According to the report, nearly 80-90% of workers are still engaged in informal employment without adequate labour protections or social security benefits.
Agriculture still employs 43% of the workforce despite decades of economic liberalisation and a sustained push toward manufacturing and services. At the same time, only 13.7% of workers are employed in enterprises with more than 20 workers, highlighting how small-scale and fragmented India's labour market remains.
Regional, And Wage Disparities
Punjab records the highest share of informal workers at 82%, followed by Uttar Pradesh and Bihar at 81% each. States such as Haryana, Tamil Nadu, Telangana and Karnataka fare relatively better because of stronger industrial and services ecosystems.
SBI's analysis found that nearly one in four casual workers earns below the statutory minimum wage. The situation is particularly severe in Chhattisgarh, Odisha and Jharkhand, where roughly two-thirds of workers receive wages below mandated minimum levels.
Female labour force participation has improved, especially in rural India, but urban women continue to lag sharply. Urban female LFPR stood at just 27.7% in 2025, compared with 45.9% for rural women. The report also found that women are more likely to be trapped in informal employment. Female workers are roughly 4.8% more likely than men to hold informal jobs.
Education, however, appears to meaningfully improve employment quality for women. SBI's analysis suggests education first helps women move away from casual labour before eventually improving access to regular salaried work. Among women with higher secondary education and above, the probability of regular wage employment rises sharply while casual labour participation drops significantly.
Another unexpected finding: women-led households tend to see better employment outcomes. Women who head households are associated with a 4.4% higher probability of being in regular wage work and a lower likelihood of casual labour.
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