Veiled underemployment

To be workforce-ready by 2047, India needs a coordinated policy approach that tackles skill mismatch and persistent issues with female labour force participation rates

- SAUMITRA BHADURI SHUBHAM ANAND

INDIA’S LABOUR MARKET is a paradox. While India recorded GDP growth of 7.8% in the first quarter of FY26, a closer look reveals that two fundamental challenges persist: a pervasive skills mismatch, anda troubling disconnect between growthand job creation. This narrative is less about a quiet revolution and more about the risk of an unfulfilled demographic dividend, demanding attention.

Perhaps the most debated aspect of India’s labour market is the trajectory of women’s participation. India’s female labour force participation rate (FLFPR) has shown a classic “U-shaped” curve, falling from 34.1% in 1999-2000 to a low of 23.3% in FY18. While a recent rebound has brought the figure up, the FLFPR in July stood at 36.9% for persons aged 15 years and above, significantly below the G20 average of around 50%.

Asignificant portion of the rebound is driven byan increase in rural areas and in own-account and unpaid workin agricul-tureand unorganised sectors.The share of women workers in regular salaried jobs, the organised sector,and industry and services has fallen over the last fewyears.Over half of the regular salaried women workers in 2023 didn’t have written job contracts or social security benefits, saida study in July by Shamim Ara and Puneet Kumar Shrivastav in Economic & Political Weekly