Recent Reserve Bank of India surveys reveal stagnation in income growth with the net response on current income falling to 0.9 from 3.0 while overall spending sentiment moderated to 74.5 from 78.4. At a time when unemployment and even underemployment has emerged as a crucial problem, affecting even the highly educated, it’s worrying to see sharp decline under MGNREGA in 2025-26, the year the Centre repealed and replaced it with Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAMG) Act. Apart from market conditions not being quite conducive, both the Central and state governments are not filling up huge vacancies in various sectors, including education.
As per official figures, unemployment is just 3.1% but it shouldn’t be less than 4%. In 2025, 56.2% of workers were casual labourers and only 23.6% held a regular wage or salaried job. The regular wage share rose from 21.7% in 2023-24 to 23.6% in 2025 and it has gained only a few points over the past two decades. In comparison with neighbouring countries like Vietnam, where out of every 100 workers, 46 hold wages while in China the figure is 55 and in South Korea it’s 77, in India it’s just around 26.
Meanwhile, the State of the Global Workplace Report 2026, which surveyed the well-being of 141,444 employees across 160 countries, found their engagement declined for the second consecutive year. South Asia recorded the steepest drop with India contributing significantly. A comparison of data from past 15 years illustrated the sharp drop. Although the percentage of active disengaged employees in India declined, the ‘not engaged’ category, classified as ‘quick quitters’ stands at 59.02% among the sample size of 3,095 respondents. The phenomenon of ‘quiet quitting’ implies that employees are resigning but doing the bare minimum required while disengaging emotionally from the work roles. Further, there has been an alarming dip in engagement levels among workplace managers from 30% in 2022-24 to 20% in 2023-25.
This means that Indian workplaces are lacking in effective leadership that can keep the team morale high. Long work hours and job insecurity also drains motivation. South Asia has the lowest number of thriving employees, whereas in India, there has been a 6% increase in anger among employees and a 15% increase in sadness in the past 15 years. This leads to reduced productivity, lower innovation and fragile organisational structures. India’s unemployment rate has been around 5%, yet disengagement is rising among the employed. Clearly, more employment opportunities need to be created while governments must fill up all vacancies. Meaningful work, fair wages and opportunities for growth are necessities.
The economy, at a crucial phase with rising oil prices rising and scarcity of fertilizers, it’s certain that in the current fiscal, it would be difficult to presume any growth in job creation. Moreover, with around 80 lakh graduates entering the workforce each year and limited incremental demand, real wages – adjusted for inflation – have been declining by about 5% annually over the past decade, In spite of government efforts, lack of capital stock and larger State investment as well as private capital, job creation is a snag.
In fact, India’s employment elasticity collapsed from 0.41% during the 1990s to 0.01% in 2026, indicating that economic growth is generating almost no meaningful expansion in formal employment. The coming months or even the current fiscal looks quite gloomy, both regarding formal and unorganised job creation.
In view of the present geopolitical situation, there is a need to concentrate on examining the feasibility of manufacturing items that are imported, not just for saving foreign exchange but also for job creation. Defence manufacturing, fertilizer production, gasification of coal, manufacture of machine tools, electronics and attracting more tourists should be on the priority list. These could generate employment and absorb skilled manpower and in fact help curb growing social unrest and youth protests.
©INFA