India faces a serious jobs crisis. Recent National Crime Records Bureau (NCRB) data, including its 2024 report, shows that (i) unemployed persons form a large category among suicide victims; (ii) student suicides have risen; and (iii) a substantial share of suicide victims were Class 10, Class 12 and higher-education students. The most striking NCRB trend is not suicides among farmers but casual-labour workers.
India’s poly-crisis: The country faces a structural economic crisis. A complacent belief appears to prevail in the government about India’s GDP growth and hence employment-generating potential.
This ignores that India must grow 8% per annum consistently for over two decades to realize its demographic dividend and reach ‘high income’ status. Yet, from 2014 to 2024, the economy grew at only at 6.2% annually (base 2012), compared to 7.8% per annum over 2004–2014.
No international agency projects that India will grow at a rate above 6.7% from 2020 to 2030. India needs nothing short of 12 million new non-farm jobs annually, but generates half that number. The growth slowdown had multiple consequences.
First, non-farm job growth fell. Our working-age population share is still increasing. However, among 900 million people of working age, only 330 million were non-farm workers in India’s 610 million workforce (2024). The rest were in agriculture and allied activities.
Shockingly, 40% of all youth (15-29 years) in the workforce are unpaid family labour . This share fell from 1993-94 to 2017-18, but shot up thereafter. In 2024, about 28 million unemployed educated youth were looking for jobs; and about 100 million educated youth (mostly women) have stopped looking. Another 150 million youth are currently in education or training who will look for work.
The Union government had inherited a youth unemployment rate (UR) of 2.2% (2012 data). By 2017-18, this tripled to 6.1%, the highest in 45 years. The youth UR also tripled to 18% over that period.
Second, a structural change was underway over 2004–2014 that involved an unprecedented fall in the absolute number of farm workers with a rising share of the construction and manufacturing sectors’ contribution to employment and gross value added (GVA). This reversed between 2015 and 2024.
Manufacturing’s share of GVA was broadly stable since 1960 or so till 2015; but despite ‘Make in India,’ the sector’s contribution to GVA fell from 17% in 2014 to 13% in the next 5 years. This had not recovered to its 2014 level in late 2025.
Similarly, the manufacturing sector’s share of employment, after rising from 10.5% to 12.8% between 2004 and 2012, fell to 11.5% in 2024. Also, an absolute fall in this sector’s employment followed till 2021, for the first time in India’s post-Independence history.
Third, as non-farm job growth fell, real wages stagnated for all workers: casual, regular wage or self-employed, both rural and urban. Our research shows that casual-worker real wages have stagnated since 2012 (just as for regular wage and self-employed workers), while their indebtedness has grown.
In May, the NCRB reported that 63% of all suicide victims came from economically insecure households with annual incomes below ₹1 lakh, with daily wage earners as the largest group.
The share of daily-wager suicide cases rose from 12% in 2014 to 23% in 2019 and then to 31% in 2024. This is outpacing the growth of daily-wage earners in India’s workforce. Agricultural labourers constituted the majority.
Fourth, another dimension of India’s aborted structural change, which had gathered momentum after 2004, is that the share of agriculture in total employment, after falling consistently for the last half century, actually rose from 42% in 2018-19 to 46.1% in 2023-24 .
The ‘Lewisian transition,’ which gathered momentum after 2004, was reversed again. Workers in agriculture rose from 200 million in 2019 to 280 million in mid-2024.
Fifth, to realize India’s demographic dividend, millions more must be employed in non-farm sectors. Yet, the country’s employment rate, or the share of the working-age and youth population finding work, is falling—the opposite of what is needed to realize the dividend.
The International Labour Organization (ILO) says that over half the global population aged above 15 is employed (56%), much higher than for India. In India, the ILO estimates the overall employment rate fell from 42% in 2004-05 to 35% in 2017-18, before rising again; but it still remains 41% and the rise is mainly due to increased unpaid family labour.
Slower GDP growth and the accompanying jobs crisis are monumental challenges for the world’s largest population. However, these twin challenges are compounding an education crisis.
Both school and higher education had rapidly increased enrolment by 2015, but this has left the economy with millions of unemployable school-leavers and tertiary graduates. Thus, unsatisfactory outcomes on education, economic growth and employment form the core of the country’s poly-crisis.
Finally, another challenge is that India’s workforce is rapidly ageing. By 2022-23, it was more or less equally divided between two age groups: below 45 and above. By 2040, India will be ageing, since the half over 45 will near retirement. Most of them, however, will have no pension support.
The authors are, respectively, former professor of economics, Jawaharlal Nehru University, and professor of economics, University of Hyderabad. They are co-authors of ‘India Out of Work’