Our new employment compact promises dignity with prosperity

The imperative of labour reforms is to ensure that its benefits reach those whose aspirations will shape our economic progress

- V. ANANTHA NAGESWARAN

India's economic achievement in recent years is significant—but its real test lies ahead.

A rapidly growing workforce is stepping into the labour market with stronger aspirations than any generation before it: better pay, better prospects, better dignity at work. Over the next two decades, millions of young Indians will join the workforce each year, and whether India’s demographic edge becomes a national dividend or a missed opportunity will depend on whether work becomes more attractive, secure and enabling.

The Indian economy today is more diversified and dynamic than ever. Manufacturing is expanding, buoyed by infrastructure investments and targeted industrial programmes. Yet, the nature of work is evolving. Many enterprises, particularly in labour-intensive sectors, hesitate to hire directly or at scale because the current compliance environment is complex, unpredictable and costly. This leads to a greater reliance on indirect or short-term hiring, which limits young workers’ ability to build stable careers and develop long-term capabilities.

Meanwhile, youth preferences have also changed. Many are drawn to flexible gig-based services that provide immediate income, or they wait for opportunities that align with their expectations of pay, dignity and living conditions. These social realities mean that India must work harder than before to make formal employment attractive, predictable and viable.