CHENNAI: The Economic Survey 2026 report said the employment sector created 8.7 lakh jobs in Q2, taking total employed people in India to 56.2 crore.
The report also said the unemployment rate in India remained at nearly 5%, and the labour force participation rate around 55%, rising to 56.1% in December 2025.
The report further said that rural employment is still dominated by agricultural workers (57.7%) and self-employment (62.8%), while in urban areas, employment is dominated by services sector (62%), with regular wage or salaried jobs making up the largest share (49.8%).
In Q2 FY26, agriculture and self-employment accounted for 42.4% and 55.8% of total employment, respectively, while casual labour constituted 18.9%.
The report said, “India's workforce of over 56 crore holds tremendous potential for its economic growth. Labour market indicators point to a steady job market, with improving labour force participation, declining unemployment, and robust job creation in both the organised and unorganised sectors.”
The survey pointed out that female labour force participation rate (FLFPR) has risen from 23.3% in 2017-18 to 41.7% in 2023-24 as the unemployment rate among women dropped from 5.6% to 3.2% during this period.
As the World Bank report states that transportation is a barrier for women to commute work, the Economic Survey report states there is a need to focus on framing policies on extending safety infrastructure and providing affordable intermediate transport to cover women’s travel chain from doorstep to destination.
It cited policy interventions like Kochi’s Women Police Control Room vans and Hyderabad’s SHE Team could help women to commute to jobs during off-peak hours.
Shantanu Rooj, Founder and CEO, TeamLease EdTech, said, “The Economic Survey rightly states that India’s employment challenge is no longer about job creation alone, but about job readiness. The widening gap between formal education and industry requirements makes skilling, apprenticeships and work-integrated learning critical to sustaining our demographic dividend. Moreover, the reference to our report quoted in the survey reinforces a key insight that employer demand is increasingly shifting towards role-based, practical skills rather than degrees alone. Bridging this gap will require deeper collaboration between academia, industry and policymakers to ensure that skilling systems move at the same pace as labour market transformation.”