In Part 1 of the “Evolving India’s Employment Landscape” series, we offered a critical analysis of the Periodic Labour Force Survey (PLFS) report, April 2025, focusing on key indicators such as the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and the Unemployment Rate, which collectively influence employment growth in India. The discussion also highlighted significant insights that contributed to employment growth, along with persistent gaps requiring attention.
Part 2 of this series focuses on some strategic recommendations for the government and policymakers to enhance India’s employment potential and promote sustainable economic development.
Recommendations for India’s Employment Growth
Enhancing Rural Growth
While rural areas have demonstrated notable progress in employment and employability, targeted interventions remain essential to address persistent challenges such as youth unemployment and seasonal unemployment arising from agricultural work.
To mitigate youth unemployment, government-led skill development initiatives should integrate emerging technologies, including artificial intelligence and automation, into their training curricula. This approach will ensure that rural youth are equipped with in-demand, future-ready skills, which will help to enhance their employability and boost access to good job opportunities.
To address seasonal unemployment in agriculture, the government should consider encouraging the development of rural household-based small-scale industries such as handicrafts, handlooms, and pottery. This can be achieved through the provision of training, access to credit, and rigid marketing support. Additionally, allied agricultural activities—including sericulture, apiculture, fisheries, and poultry—should be promoted through targeted incentives and infrastructure subsidies. Organising training programs in mushroom cultivation, an emerging agro-based enterprise, can further diversify rural livelihoods.
Collectively, these government interventions can significantly reduce youth unemployment & seasonal unemployment, foster rural entrepreneurship, and contribute to the holistic growth and development of rural India.
Promoting Women’s Participation in the Labour Force
Exclusive and actionable measures are critical to increasing women’s participation in the labour force. It is imperative to implement and enforce stringent legal frameworks that declutter societal restrictions hindering women’s participation in employment.
Organisations should be encouraged to adopt gender-inclusive hiring practices at all levels, particularly in management and leadership roles. Additionally, implementing women-centric leadership development programs can strengthen their decision-making capabilities and pave the way for more inclusive workplaces. To improve retention rates, companies may offer flexible work arrangements such as work-from-home or hybrid models, particularly benefiting married women and mothers. The establishment of workplace crèches can further support working mothers in balancing professional and family responsibilities.
In rural areas, the formation of women-exclusive Self Help Groups (SHGs) under the National Rural Livelihood Mission (NRLM) and women-led cooperatives can serve as effective platforms to safeguard their rights and interests. Furthermore, fostering women’s entrepreneurship through access to financial assistance under schemes such as Stand-Up India, Mudra Yojana, and Startup India can empower their independent growth.
Enhancing Urban Employment
The April 2025 PLFS report highlights an unusual and concerning trend: unemployment rates in urban areas have surpassed those in rural regions, necessitating proactive and targeted policy responses. The government can consider the following measures to revitalise employment in urban areas:
Urban Micro, Small, and Medium Enterprises (MSMEs) possess substantial potential to generate employment across diverse skills. Their operational efficiency can be significantly improved by easing financial access through credit guarantee schemes and MUDRA loans. Additionally, simplifying and reducing compliance burdens will encourage urban entrepreneurship across various sectors. Introducing targeted incentives for MSMEs that employ youth and women can further stimulate inclusive employment growth.
A significant contributor to urban unemployment is the mismatch between education and industry needs, resulting in a surplus of educated individuals lacking market- demanding skills. This gap can be bridged through vocational training programs under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), focusing on industry-relevant skills for graduates and freshers. Partnerships with startups and multinational corporations (MNCs) can facilitate on-the-job training, internships, and apprenticeships, equipping young professionals with sector-specific competencies. Establishing common city-level skill hubs can further support emerging talent in acquiring the necessary expertise for the current job market trends.
The gig economy is reshaping urban employment dynamics, with freelancers and delivery personnel comprising a growing segment of the workforce. However, these workers often face employment insecurities due to systemic inefficiencies. To address this, it is essential to extend social security benefits—such as health insurance and provident fund coverage—establish minimum wage standards, create a dedicated grievance redressal mechanism, and offer skill enhancement programs to support career advancement for gig workers.
India’s employment growth is at a critical juncture, requiring strategic government interventions to address existing inefficiencies. Youth and seasonal unemployment in rural areas can be effectively mitigated through tailored skill development initiatives and the promotion of rural entrepreneurship. Enhancing women’s participation in the labour force requires the implementation of gender-inclusive hiring practices and the protection of their rights and interests.
In urban areas, tackling unemployment necessitates revitalising the MSME sector, expanding access to internships and apprenticeships, and promoting the gig economy with adequate social protections. The sustainability of India’s future workforce hinges on achieving an equilibrium in the distribution of employment opportunities across genders and between rural and urban sectors.
