Market Trends Unveiled
The Economic Survey 2025-26 presented a promising outlook for India's labour market, signaling noticeable improvements in employment conditions throughout
the fiscal year 2026. This positive trend was largely attributed to a combination of factors. The structural reforms implemented played a significant role, fostering a more organized economy and boosting overall economic performance. The data from the Monthly Periodic Labour Force Survey (PLFS) for April–December FY26 further underscored these positive developments. The unemployment rate saw a decline, dropping from 5.4% in the first quarter to 4.9% by the third quarter. Concurrently, the labour force participation rate increased, rising from 54.9% to 55.8% during the same period. The annual PLFS report for 2023-24 further confirmed the trend, showing a sharp decrease in unemployment to 2.5%, a substantial improvement from the 3.3% recorded in 2020-21.
Women's Labour Force
A significant highlight of the Economic Survey was the improvement in labour force participation among women. The data shows that 54% of e‑Shram registrants were women. This increased participation is attributed to several factors. Structural reforms have lowered barriers to entry, enabling more women to join the workforce. The expansion of digital public infrastructure has provided easier access to work opportunities, further facilitating female participation. Moreover, the formalization of the economy has created more structured and secure employment options. These shifts reflect broader changes in education, skill development, and work arrangements, indicating a positive trajectory towards greater gender equality in the labour market. While gender gaps persist, the direction of change is encouraging.
Skill Development Surge
Simultaneously, there has been a notable surge in skill development across the nation. The share of individuals aged 15–59 years old receiving vocational or technical training has risen to 34.7%. This increase is partly due to initiatives like the revamped Skill India Digital Hub. The implementation of the National Skills Qualification Framework also contributed significantly to the surge, establishing standardized skill assessments and certifications. Furthermore, outcome-based financing models have been instrumental in encouraging and funding skills training programs. These combined efforts are equipping the workforce with the skills needed to meet the demands of a changing job market, thereby improving the overall quality and efficiency of the labour force. These steps are preparing the workforce for future challenges.
New Labour Codes' Impact
The upcoming implementation of the four new Labour Codes, slated for late 2025, is expected to bring substantial changes. These codes consolidate 29 existing laws, aiming to increase flexibility for businesses and simplifying compliance. They also promise to provide portable social security benefits for employees, gig workers, and platform workers. The Economic Survey estimates that these codes could create up to 77 lakh new jobs. Additionally, the new codes are projected to potentially lower the unemployment rate to between 1.9% and 2.9%. These reforms aim to improve the work environment, make it easier for businesses to operate, and provide better social security for workers, contributing to a more robust and equitable labour market.
