India Out of Work: the jobs crisis we have decided not to see
| AUTHOR | Sridhar Krishna |
| DATE | August 4, 2026 |
| CATEGORIES | Economic Policy Jobs Trade and Industrial Policy |
Book review of India Out of Work: Rethinking India’s Growth Story — Santosh Mehrotra and Jajati Parida. Bloomsbury
Every few years a book arrives that refuses to let a comfortable national story stand. Santosh Mehrotra and Jajati Parida have written one. India Out of Work makes a simple and uncomfortable case: India is in the middle of a jobs crisis, and the official numbers are doing more to hide it than to reveal it. We are being told that the labour force participation rate is rising, that unemployment is low, that even women are entering the workforce in greater numbers. All of it is technically true. Almost none of it means what we think it means.
Mehrotra has spent a career on exactly this terrain — as a professor at JNU, as Director General of the government’s own labour economics research institute, and as an adviser to the ministries now issuing the numbers he is questioning. That matters, because this is not a polemic from the outside. It is a careful, data-heavy indictment from someone who helped build the measuring instruments.
The arithmetic that gives the game away
Start with the single statistic that anchors the book. Agriculture employs 46% of India’s workforce and produces 15% of its GDP. That gap is not a curiosity; it is the definition of an unproductive sector. And it is growing. Over the last few years agriculture has absorbed more than 65 million additional people — not because farming became more attractive, but because those workers concluded that non-farm work was not available to them.
Once you see that, the good news dissolves. The rise in labour force participation, the low headline unemployment rate, the improving female participation figures — a large part of each is people retreating into the least productive corner of the economy. A workforce moving from farm to factory is development. A workforce moving back from factory to farm is something else, and we have given it an encouraging name.
Ninety per cent of Indians work without a net
The number of Indians holding formal, permanent jobs is startlingly small. The overwhelming majority work in the unorganised sector: low wages, no job security, no pension, no medical cover, no safety net of any kind. The authors put informal and unpaid work at just over 90% of all employment. Formal-sector employment — the kind that offers security and a fair wage — has essentially stopped growing at precisely the moment it is needed most.
Things had begun to improve on the jobs front until the triple whammy of demonetisation, a badly implemented GST, and then COVID undid the progress. Two of those three were self-inflicted, which is the part worth sitting with.
Women are the sharpest illustration of how a rising number can conceal a falling reality. More women are being counted in the workforce, but a large share of them are unpaid family labour or underemployed. Being counted is not the same as being paid. The authors want the conversation moved from participation to paid, productive employment — and they are blunt that social norms, not aptitude or willingness, are what keep millions of women out of real work.
How the definitions flatter us
The most valuable stretch of the book is also the least glamorous. Mehrotra and Parida spend chapters showing how changes to the definition of “employed” have improved the statistics without improving anyone’s life. Count unpaid family labour as employment. Treat the swelling of agricultural labour as neutral rather than as distress. Do both, and a deteriorating labour market starts to photograph well.
Their sharpest point is not about measurement at all. It is that the refusal to admit the problem is itself the reason the problem persists. You cannot direct policy at a crisis you have officially defined out of existence. At a time when India is celebrated as the fastest-growing large economy and has committed itself to a Viksit Bharat by 2047, the authors fear we are spending our energy on flattering narratives instead of on the harder work of fixing what is broken. Their own benchmark is unsentimental: 10 to 12 million new non-farm jobs every year, sustained for decades, with roughly fifteen years of the demographic dividend left. Miss it and India grows old before it grows rich — Brazil and South Africa having already demonstrated what that looks like.
The services escape hatch is narrowing
India famously missed the manufacturing bus and got away with it. Services — the IT industry above all — absorbed a good share of the workers manufacturing never hired, and for three decades that improvisation held. AI puts that model at risk, and India does not yet have a convincing story about what replaces it. The escape hatch that saved us the first time may not be there for the second attempt.
Which leaves manufacturing. India has to raise its game there. But manufacturing itself has changed, and the version we keep planning for no longer exists.
Manufacturing, but not the manufacturing we remember
Read alongside the book, The Economist’s piece on the “manufacturing delusion” sharpens the point. Several of its observations sit awkwardly with the standard Indian plan:
· Middle-level jobs are disappearing, leaving very low-end work and a small number of very high-end roles. India should grab what it can, but that shape of employment is neither large enough nor durable enough to carry us.
· Industrial robotics and advanced production technology have made manufacturing genuinely complex. It demands high skill and may no longer absorb fresh labour coming off the farm at all.
· Manufacturing as a share of GDP is falling almost everywhere as the line between goods and services blurs. We may be chasing a share of a shrinking category.
· The right target is therefore value per worker, not the headline count of jobs.
· That means competing in design, engineering and innovation, investing aggressively in upskilling, and finally implementing labour reforms.
· It also means a services play of the ambition that IT services delivered over the last three decades — and companies now localising manufacturing across the world give India a real, if narrow, opening to compete for.
Verdict
India Out of Work is not an easy read, and it is not meant to be. It is a book of tables, definitions and revised estimates, and its argument is built rather than asserted. What it offers is rare: a rigorous account of why an economy can grow at an enviable rate while the people inside it stay poor, insecure and underemployed — and why our own statistics have made that easier to ignore.
If you accept its central claim, a great deal of the optimism around Viksit Bharat looks like a plan without an employment strategy attached. Fifteen years of demographic dividend is not much time to build one. Read it for the arithmetic on agriculture and informality, and for the chapters on how the definitions shifted. Those are the pages that stay with you.