The Indian government’s official unemployment data is underestimating the true scale of joblessness and underemployment in the country. In a Reuters poll of economists, several respondents suggested the actual jobless rate may be double the official figure of 5.6 percent recorded in June this year.
India, the world’s fastest-growing major economy, clocked an annual growth rate of 7.4 percent in the January–March quarter. However, this pace of expansion has not translated into sufficient job creation, particularly for the millions of young people entering the workforce each year.
“We have a massive employment problem and that is not reflected in the data,” Reuters quoted Pranab Bardhan, professor emeritus of economics at the University of California, Berkeley, as saying.
A majority of experts surveyed said the employment statistics mask the scale of economic stress, especially among youth. Seventeen of the economists polled offered alternative estimates of the unemployment rate, with a median of 10 percent. The range extended from 7 percent to as high as 35 percent.
For years, India reported jobless rates of around 4 percent—partly because unpaid family labour and subsistence activities were included as employment. Experts argue such methods diverge from international standards and render India’s unemployment figures incomparable with those of other nations.
Former Reserve Bank of India governor Duvvuri Subbarao said the nature of job creation was just as important as the headline figures. “Unemployment is one of our big challenges and I don't believe the government data reflects the true ground situation,” he said, adding that high-growth sectors like IT and finance are not labour-intensive enough. He called for greater policy focus on manufacturing to support large-scale job creation.
The Ministry of Statistics and Programme Implementation defended the credibility of its data, stating that the PLFS employs Computer-Assisted Personal Interviews to enhance accuracy. It also noted that international institutions regularly cite PLFS data. (PLFS stands for Periodic Labour Force Survey, which is a survey conducted by the National Statistical Office under the ministry).
Still, concerns persist. Economist Jayati Ghosh from the University of Massachusetts Amherst said wage stagnation is another sign of the crisis. “Real wages are not growing. Half of the workers are earning less than they did even a decade ago,” she said. “We are home to some of the world’s dollar billionaires, yet the majority are struggling. These are not signs of a healthy economy.”
Several experts argued that India needs to shift its focus from merely boosting headline growth to ensuring inclusive development. Recommendations included improving education and vocational training, attracting private investment, and reducing regulatory red tape.
Santosh Mehrotra, professor at the University of Bath, criticised the government’s Production Linked Incentive (PLI) scheme for trying to “pick winners” instead of pursuing a broader manufacturing strategy. “Stop selling the narrative that farm jobs growth equals jobs growth. Adopt an industrial policy that is horizontal in nature, not one based on selective subsidies,” he said.
Despite criticism, a minority—about a quarter of the experts polled—expressed confidence in the official data. “No one in the world has perfect employment data,” said Surjit Bhalla, former executive director for India at the International Monetary Fund. “Our PLFS is very robust now. People just don't want to believe it.”
Nonetheless, for a country of over 1.4 billion people, the challenge remains immense. Without more accurate data and a shift in policy priorities, India risks a widening gap between economic growth and employment outcomes.
