With the release of the Periodic Labour Force Survey (PLFS) monthly bulletin, India’s labour statistics are now at par with those of advanced economies in terms of speed and coverage. We have moved from quinquennial Employment–Unemployment Surveys (EUS) to annual Periodic Labour Force Surveys (PLFS) with quarterly estimates for urban areas and, beginning in 2025, to monthly labour market estimates for both rural and urban areas. The estimates cover headline indicators, such as Labour Force Participation Rates (LFPR), Work Participation Rates (WPR), and Unemployment Rates (UR) for men and women both in rural and urban India. Are the headline indicators sufficient enough to offer a nuanced picture of the labour market? Do they convey anything on the miserable conditions of poverty? Illustration: Pariplab Chakraborty.Let us see what do the headline indicators project and what they do not. From the period between 2017-18 and 2025, unemployment has halved from 6% to 3%. Female labour force participation has surged from 23% to 40%. What’s more, as per the government estimates employment grew by 16.8 crore between 2017–18 and 2023–24 and lost 2.7 crore jobs in 2025, with a net addition of 14 crore: a pace of job creation over seven years that is equivalent to the job creation that took China more than two decades during its rapid industrialisation and double-digit growth between 1990 and 2012. Going by these numbers, India’s labour market has never had it so good. Yet, the reality is far more complex.Headline indicators are well suited to advanced economies, where most workers are employed predominantly in the formal sector and in wage employment. In India, where 80% of workers are in the informal sector and most are self-employed, the same indicators can mean the opposite of what they appear to show. The first COVID-19 lockdown exposed the limitations of headline labour market indicators. Despite a historic economic contraction, work participation increased and unemployment remained stable, even declining slightly. These aggregate figures failed to reflect the widespread employment and income losses experienced by workers, thereby masking the true extent of the labour market crisis.Similar distortion runs the other way for the celebrated 16.8-crore job-creation figure. Taken at the face value, it implies that India added jobs faster than almost any economy in history. But over the same period, wage employment actually fell from 48 to 44% of the workforce while self-employment rose. That is to say, the reverse of what should happen as an economy develops. We have too many of the self-employed workers. Workers are supposed to move from own-account and unpaid family work toward wage employment, not away from it. When “job creation” mostly means more people working for themselves out of necessity, celebrating the number as growth eerily misses the point almost entirely.To understand the labour markets better in developing countries, we need to distinguish between different sources of labour demand that headline statistics do not reveal. Some demand is derived from output growth, with jobs created as the economy expands: the kind of employment that dominates advanced economies. Other forms of work are largely distress-driven, such as own account self-employed or informal wage employment, which people take up because they have no alternative, not primarily because they prefer or choose.A worker walks through a lush green paddy field as monsoon clouds gather, on the outskirts of Amritsar, Punjab on August 6, 2026. Photo: PTI.Earnings data helps tell the two apart, and the picture it offers is rather stark. Using India’s floor-level minimum wage Rs 178 a day (Rs 4,628 a month) as a cutoff, roughly half of all self-employed workers earn less than that as do 30% of casual workers and 10% of regular wage employees. Apply a slightly higher benchmark, to the Seventh Pay Commission’s Rs 18,000-a-month floor, and the picture worsens: 93% of the self-employed and virtually all casual workers fall short, as do 76% of regular workers – the category usually considered formal employment. A large share of India’s workforce isn’t earning even what the formal sector considers a baseline wage, a fact invisible in the participation and unemployment rates alone.The unemployment rate hides a second, subtler distortion. Part of its decline is denominator arithmetic: as women’s participation rose, mostly drawn from the reserve pool previously doing unpaid household work, not new entrants. In this case, unemployed-to-population ratio is a steadier measure, and the decline in unemployment is modestly fallen from 3 to 2% from 2017-18 to 2025.More troubling still is who the unemployed actually are: overwhelmingly young and educated. Youth with secondary education and above (aged 15-29 years) constitute 84% of the total unemployed in India, one of the highest such shares in the world and roughly double the share than in advanced economies. Unemployment virtually disappears after one crosses the age of 35, and the stark reality is that only 14% secures a formal job. The share of unemployed youth without secondary education, which accounted for one-third of the total unemployed in 2017–18, has now fallen to around one in ten. Falling unemployment, in this setting, isn’t a sign of a strong labour market. It’s a sign that people can’t afford to stay unemployed and take whatever work is available: a marker of likely distress, not demand.Clearly, two diametrically contrasting stories emerge from the above. The headline indicators paint a rather rosy picture: a picture of progress marked by unprecedented job creation and falling unemployment. If we dig deeper, what we get is a situation of distress driven employment and poorly paid jobs. If the PLFS monthly bulletin continues to report headline indicators alone, it will keep telling a story of progress that the underlying reality does not support. Fixing this requires more than better data; it requires moving from just counting numbers to start measuring what constitutes a decent job. It also means directing schemes with formalisation incentives towards distress-driven self-employment, particularly among women. Furthermore, it means treating India’s educated, unemployed youth not as a skills-matching problem to be solved through more internships, but as a demand-side failure requiring sustained formal-sector hiring and apprenticeships that genuinely convert into decent jobs. Until job creation is measured and rewarded by the wages that are not below subsistence, security and quality of employment, rather than number of jobs it generates, India’s labour statistics will continue to flatter the state while failing the workers, not to speak of their families.Mohd Imran Khan is Assistant Professor of Economics at SBM, Narsee Monjee Institute of Management Studies, Ahmedabad Campus. Views expressed are personal.This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. To subscribe to The India Cable, click here.