62  Indian Labour Force: Nature, Size, Composition (Rural-Urban, Male-Female, Sectoral, Organised-Unorganised, Self-Employed-Regular-Casual), Demographic Profile, Demographic Dividend, NCEUS Definitions, PLFS Indicators and Recent Trends

62.1 A Workforce of 56 Crores in Motion

India’s labour force — those who work or want to work — is among the world’s largest at over 60 crore people. Its nature is profoundly dual: highly educated software engineers and illiterate brick-kiln workers in the same economy. Its composition is shifting: agriculture’s share declining, services rising; female participation rebounding after a long decline; gig and platform workers emerging as a distinct category. This chapter consolidates the demographic and structural picture of India’s labour force.

62.2 1 · Size of India’s Labour Force (PLFS 2022-23)

TipSize and Headline Indicators
Indicator Value (Approx)
Total population (Census 2011) 121 crore (1.21 bn)
Estimated population 2023 ≈ 142 crore
Working-age (15-59) population ≈ 89 crore (≈ 65 %)
Labour force (15+) ≈ 60-61 crore
Workers (employed) ≈ 58 crore
LFPR (usual status) 57.9 %
WPR 56.0 %
UR (usual status) 3.2 %

62.3 2 · Rural-Urban Composition

TipRural-Urban Distribution (PLFS 2022-23)
Indicator Rural Urban
LFPR 60.8 % 50.4 %
WPR 59.4 % 47.7 %
UR 2.4 % 5.4 %
Female LFPR 41.5 % 25.4 %

Rural areas show higher LFPR but lower regular-wage share; urban shows lower LFPR but higher share of regular-salaried jobs.

62.4 3 · Male-Female (Gender) Composition

TipGender Composition
Indicator Male Female
LFPR 78.5 % 37.0 %
WPR 76.0 % 35.9 %
UR 3.3 % 2.9 %

Female LFPR has risen significantly after the prolonged decline to ~ 23 % around 2017-18.

62.5 4 · Sectoral Composition (PLFS 2022-23)

TipSectoral Composition of Workforce
Sector Share of workforce
Agriculture and allied 45.8 %
Manufacturing 11.4 %
Construction 13.0 %
Trade, hotel, restaurant 12.1 %
Transport, storage 5.6 %
Other services 12.1 %

Note the recent re-agriculturalisation: agriculture share rose during the pandemic years (was ~ 42 % in 2018-19), reflecting reverse migration and lack of urban jobs.

62.6 5 · Status of Employment

TipEmployment Status (PLFS 2022-23)
Status Share
Self-employed 57.3 %
↳ Own-account workers 38.2 %
↳ Employers 1.0 %
↳ Helpers in household enterprise 18.0 %
Regular wage / salaried 20.9 %
Casual labour 21.8 %

The 57 %+ self-employed share — much of which is own-account + unpaid family helpers — indicates the predominantly informal nature of Indian employment.

62.7 6 · Organised vs Unorganised

TipOrganised vs Unorganised (Indicative)
Type Approximate Share Examples
Organised < 10 % of workforce Factories (10+), large service firms
Unorganised > 90 % of workforce Agriculture, construction, retail, household enterprises

62.7.1 NCEUS Definitions (2007)

The National Commission for Enterprises in the Unorganised Sector (NCEUS) — chaired by Arjun Sengupta — gave the workable Indian definitions:

TipNCEUS Definitions
Term Definition
Unorganised sector All unincorporated private enterprises owned by individuals / households engaged in the sale and production of goods and services, operated on a proprietary or partnership basis with less than 10 total workers
Unorganised worker A home-based worker, self-employed worker or wage worker in the unorganised sector and includes workers in the formal sector without any social security
Informal employment Workers without formal contract / social security
NotePYQ trap — NCEUS 2007 / Arjun Sengupta Committee

NCEUS, chaired by Arjun Sengupta, distinguished unorganised sector (the enterprise) from informal employment (the worker condition) — a worker can be informally employed even in the organised sector (e.g., contract worker in a factory).

62.8 7 · Demographic Profile

TipIndia’s Demographic Profile
Indicator Value
Median age (2023) ≈ 28 years
Population growth rate (2023) ≈ 0.8 %
Total Fertility Rate (NFHS-5) 2.0 (replacement level)
Sex ratio at birth (NFHS-5) 929
Working-age share (15-59) ≈ 65 %
Old-age share (60+) ≈ 10-11 % (rising)
Dependency ratio ≈ 47
Urbanisation (2023) ≈ 36 %

62.9 8 · Demographic Dividend

A demographic dividend arises when a country’s working-age population grows faster than its dependent population (children + elderly), creating potential for higher growth. India entered this phase around 2005-06; it will continue till around 2055, but peaks around 2030-40.

62.9.1 Pre-conditions for Reaping the Dividend

  • Quality education for the youth bulge.
  • Skill development matching market demand.
  • Health and nutrition.
  • Labour-absorbing growth — particularly manufacturing and services.
  • Female labour-force participation.
  • Migration management.

62.11 10 · Caste and Religion in Indian Labour Force

TipSocial Group Composition (PLFS 2022-23, Approximate)
Group Workforce Share LFPR
SC ≈ 18 % Higher than average
ST ≈ 11 % Highest
OBC ≈ 44 % Average
Others ≈ 28 % Lower

ST workforce participates more because of higher rural-agricultural dependence.

62.12 11 · State-Wise Variation

  • Highest LFPR: Sikkim, Himachal Pradesh, Telangana.
  • Lowest LFPR: Bihar, UP (especially female).
  • Highest urban UR: Kerala, Punjab.
  • Lowest UR: Gujarat, Madhya Pradesh, Chhattisgarh.

62.13 12 · Indian Labour Force vs World Averages

TipIndia vs World
Indicator India World
Female LFPR 37 % 49 %
Total LFPR 58 % 60 %
UR 3.2 % 5.5 %
Self-employed share 57 % ~ 47 %
Median age 28 30

62.14 Practice Questions

Q 01SizeMedium

India's labour force size (PLFS 2022-23) is approximately:

  • A30 crore
  • B60 crore
  • C100 crore
  • D142 crore
View solution
Correct Option: B
≈ 60-61 crore.
Q 02Agri shareMedium

Agriculture's share in Indian employment (PLFS 2022-23) is approximately:

  • A10 %
  • B25 %
  • C45 %
  • D65 %
View solution
Correct Option: C
≈ 45.8 %.
Q 03NCEUSMedium

NCEUS was chaired by:

  • AM.S. Swaminathan
  • BArjun Sengupta
  • CC. Rangarajan
  • DBibek Debroy
View solution
Correct Option: B
Arjun Sengupta (2004-2009).
Q 04UnorganisedMedium

Per NCEUS, the unorganised sector consists of enterprises with:

  • ALess than 10 total workers
  • BMore than 50 workers
  • COnly one worker
  • DOnly family enterprises
View solution
Correct Option: A
< 10 workers.
Q 05Female LFPRMedium

Female LFPR (PLFS 2022-23):

  • A15 %
  • B23 %
  • C37 %
  • D52 %
View solution
Correct Option: C
≈ 37 %.
Q 06Working-ageMedium

India's working-age (15-59) population is approximately:

  • A20 % of population
  • B35 %
  • C65 %
  • D85 %
View solution
Correct Option: C
≈ 65 %.
Q 07Self-employedMedium

The largest employment-status category in India is:

  • ARegular wage
  • BCasual labour
  • CSelf-employed
  • DApprentices
View solution
Correct Option: C
≈ 57 %.
Q 08MatchHard

Match indicator with approximate value (PLFS 2022-23):

(i) LFPR (a) 3.2 %
(ii) WPR (b) 37 %
(iii) UR (c) 56 %
(iv) Female LFPR (d) 58 %
  • A(i)-(d), (ii)-(c), (iii)-(a), (iv)-(b)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(b), (ii)-(a), (iii)-(d), (iv)-(c)
  • D(i)-(c), (ii)-(d), (iii)-(b), (iv)-(a)
View solution
Correct Option: A
LFPR 58 %; WPR 56 %; UR 3.2 %; Female 37 %.
Q 09Reverse migrationHard

Agriculture's share of employment rose in 2020-21 because of:

  • APandemic-induced reverse migration
  • BLand reform
  • CTax reform
  • DNo reason
View solution
Correct Option: A
Pandemic reverse migration.
Q 10Dividend peakMedium

India's demographic dividend peaks around:

  • A2010
  • B2020
  • C2030-40
  • D2060
View solution
Correct Option: C
2030-2040.
Q 11RuralMedium

Rural LFPR (PLFS 2022-23) is:

  • AHigher than urban
  • BLower than urban
  • CSame as urban
  • DNegligible
View solution
Correct Option: A
Rural 60.8 % > Urban 50.4 %.
Q 12Median ageMedium

India's median age is approximately:

  • A18
  • B28
  • C38
  • D45
View solution
Correct Option: B
~ 28 years (young population).
Q 13InformalHard

"Informal employment" per NCEUS:

  • AOnly in the unorganised sector
  • BCan exist even in the organised sector if no contract / SS
  • COnly government
  • DOnly manufacturing
View solution
Correct Option: B
Contract worker in a factory = informal employment in organised sector.
Q 14YearHard

India entered the demographic dividend phase around:

  • A1990
  • B2005-06
  • C2015
  • D2020
View solution
Correct Option: B
≈ 2005-06.
Q 15UR pandemicMedium

India's unemployment rate (PLFS 2022-23) has:

  • ARisen above 8 %
  • BDeclined to ~ 3.2 %
  • CStayed at ~ 12 %
  • DReached 0 %
View solution
Correct Option: B
3.2 % per PLFS — though concerns over quality persist.
Q 16DependencyHard

India's dependency ratio is approximately:

  • A25
  • B47
  • C75
  • D100
View solution
Correct Option: B
~ 47 dependents per 100 workers.
Q 17UrbanisationMedium

India's urbanisation rate is approximately:

  • A16 %
  • B26 %
  • C36 %
  • D60 %
View solution
Correct Option: C
≈ 36 %.
Q 18STHard

Among social groups, the highest LFPR is generally observed in:

  • ASC
  • BST
  • COBC
  • DOthers
View solution
Correct Option: B
ST highest, due to higher rural-agricultural participation.
Q 19High UR stateHard

Among Indian states, the highest urban unemployment rates are typically in:

  • AKerala, Punjab
  • BGujarat, MP
  • CSikkim, HP
  • DAll have same UR
View solution
Correct Option: A
Kerala, Punjab — educated unemployment.
Q 20Regular shareMedium

Regular wage/salaried share of Indian workforce is approximately:

  • A21 %
  • B40 %
  • C57 %
  • D75 %
View solution
Correct Option: A
≈ 21 %.

62.15 Quick Recall

ImportantQuick recall
  • Labour force ≈ 60-61 crore; working-age 89 crore; LFPR 57.9 %, WPR 56 %, UR 3.2 % (PLFS 2022-23).
  • Rural LFPR 60.8 % > Urban 50.4 %; rural UR lower than urban.
  • Female LFPR rose from 23 % (2017-18) → 37 % (2022-23).
  • Sectoral: Agriculture 45.8 %, Construction 13 %, Trade 12.1 %, Manufacturing 11.4 %.
  • Status: Self-employed 57 %, Regular salaried 21 %, Casual 22 %.
  • Organised < 10 %; Unorganised > 90 % (NCEUS).
  • NCEUS 2007 (Arjun Sengupta Committee): unorganised sector = enterprises with < 10 workers; informal employment = workers without contract / SS even in organised sector.
  • Demographic dividend entered ≈ 2005-06; peaks ≈ 2030-40.
  • Indicators: Median age ≈ 28; TFR 2.0; Working-age share 65 %; Dependency ratio ≈ 47; Urbanisation ≈ 36 %.
  • Social groups: ST highest LFPR; SC/OBC near average.
  • State variation: Kerala/Punjab high UR; Gujarat/MP low UR.