Even as the Centre moves to overhaul India’s labour regime through four new labour codes, the Economic Survey 2025-26 flags a widening gap between reform intent and labour-market reality—particularly for gig workers, women, and newly skilled youth.
Notified last November, the codes promise expanded social security, minimum wage guarantees, and a simpler compliance framework aimed at balancing workers’ welfare with industry competitiveness. The survey also points to gains such as safer and more flexible work arrangements that could improve gender diversity.
But these reforms come against the backdrop of persistent fault lines: volatile incomes for India’s fast-growing gig workforce, weak access to formal credit, low job retention despite large-scale skilling programmes, and women’s continued underrepresentation in stable, formal employment.
“The Economic Survey 2025-26 underscores labour law reforms—through the implementation of the four Labour Codes—as a major step toward creating a simpler, modern, and more inclusive labour framework,” said Puneet Gupta, partner, people advisory services-tax, EY India. By consolidating 29 laws into four codes, he said, the reforms aim to reduce compliance burden, expand social security to unorganised and platform workers, and promote gender inclusion across sectors with appropriate safeguards.
Gig workers remain marginalised
The survey, tabled on Thursday, pointed out that while the gig sector is expanding rapidly, the “income volatility among 12 million gig workers persists, leading to challenges in accessing credit”. Most gig workers remain financially invisible to lenders due to ‘thin file’ credit histories, even as platform aggregators have introduced some changes to improve onboarding and payments.
According to the economic survey, about 40% of gig workers earn less than ₹15,000 per month and this income volatility makes it difficult to access credit.
“There is a growing focus on expanding social security, income protection, and grievance redressal mechanisms for gig and platform workers to safeguard their well-being,” said the survey.
India’s gig economy jumped 55% from 7.7 million workers in FY21 to 12 million in FY25. The gig workforce now accounts for over 2% of the country’s total workforce and is likely to grow to 6.7% of the non-agricultural workforce by 2029-30, according to the survey.
The concerns raised in the latest Economic Survey come on the back of growing unrest among gig workers and union leaders, following a nationwide strike call against Swiggy and Zomato on New Year’s Eve that fizzled out as many riders chose to work amid festival incentives.
“This is what we have been fighting for, how gig workers face income volatility, algorithmic control, and limited financial inclusion, stronger labour protections are no longer optional they are urgent,” said Shaik Salauddin, co-founder and national general secretary Indian Federation of App Based Transport Workers (Ifat) and founder president, Telangana Gig and Platform Workers Union (TGPWU).
Besides the gig workers, challenges in employment despite the skillset training remains a concern. The annual survey, presented ahead of the Union budget, flagged low job retention and limited wage growth among trainees, pointing to a persistent gap between skilling efforts and labour-market outcomes. “The central challenge in India’s skilling landscape is not the absence of training effort but the weak translation of training into durable labour-market value,” it said.
Outcome-based skilling needed
The survey noted that the skilling policy has focused more on scale than on results. Enrolments and certifications have taken priority over whether trainees secure stable employment or see sustained income gains.
“There is a need to shift the focus from outputs, such as the number of programmes and enrolments, towards outcomes in terms of employability, improved earnings, and job quality,” the survey said. The country’s workforce has crossed 560 million, according to the survey.
Calling for a reset, the survey recommended linking public funding and incentives to placement quality and job retention rather than training volumes. “The first step is to re-anchor incentives around outcomes and retention.” It suggested tying funding, contracts, and empanelment of training providers to verified employment outcomes, including six- and 12-month retention and evidence of earnings growth.
The survey also flagged weak employer participation as a key structural gap, arguing that skilling programmes work best when employers are involved in curriculum design, assessments and on-the-job training. “Employer linkage should be treated as a core design feature rather than an add-on.
According to Shantanu Rooj, founder and CEO of TeamLease Edtech, 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,” Rooj said.
However, Ronnie Screwvala, chairperson and co-founder of upGrad, argued that linking skilling too narrowly to employment risks missing the larger purpose of training. “I think it’s sad if we keep linking skills directly to job opportunities,” he said, adding that skilling is “almost a necessity on a standalone basis”.
Screwvala said a jobs-only lens also ignores the rise of self-employment, particularly in rural India. “Today, many of them need the skills to start their own small business,” he said, pointing out that such outcomes are not captured in traditional placement metrics.
He also cautioned against making government funding contingent solely on jobs. “If you’re saying that my KPI for releasing the next round of funds is based on jobs, it’s a little bit of a harsh one,” he said, adding that without upfront skilling, future job creation itself gets constrained.
More women needed in workplace, STEM courses
Women and their inclusion was a concern raised prominently in the survey. While women’s participation in paid work is rising slowly, “the imbalance underscores the need for policies that promote shared domestic responsibilities and better care infrastructure”, it stated.
It highlighted that India’s female labour force participation increased from 23.3% in 2017-18 to 41.7% in 2023-24, but more needs to be done.
“Despite these improvements in economic participation, women workers continue to face structural barriers, including limited mobility, lack of affordable housing, and inflexible work arrangements that conflict with caregiving responsibilities, underscoring the need for a multipronged policy approach to further enhance participation.”
The survey showed that women accounted for 21.3% of regular wage or salaried jobs, compared with 27.2% for men, in the September quarter of 2025-26.
During and immediately after the covid-19 outbreak, the sharp drop in women’s participation in the workforce had worried Indian companies. Since then, businesses across sectors have made additional efforts—including flexible working hours and work-from-home policies—to bring more women into the workforce.
One way was to include more women from bottom up, encouraging more women to enter male-dominated science, technology, engineering and mathematics (STEM) fields, even as women continue to navigate caregiving responsibilities, marriage and the rising cost of higher education.
The Periodic Labour Force Survey (PLFS) for 2023-24 showed that women aged 25 and above with advanced degrees accounted for just 2.9% of the employed female workforce across rural and urban areas.