New Delhi: India’s gig economy has expanded rapidly over the past few years, emerging as one of the fastest-growing sources of employment. But the latest Economic Survey warns that this growth has come with amplified risks related to income stability, worker protection and technological disruption.
The Economic Survey 2025-26, presented in Parliament by Finance Minister Nirmala Sitharaman Thursday, underlines that the gig workforce has grown from 77 lakh in FY 2021 to about 1.2 crore in FY 2025, driven by widespread smartphone penetration, rise of digital platforms and the scale-up of UPI-based payments.
“Now representing over 2 percent of the total workforce in India, growth of gig workers outpaces overall employment, with non-agricultural gigs projected to constitute 6.7 percent of the workforce by 2029-30, contributing Rs. 2.35 lakh crore to GDP,” said the survey, prepared by Chief Economic Adviser V. Anantha Nageswaran.
Despite the high growth potential for the sector, the survey outlined persistent vulnerabilities with the gig workforce as 40 percent of them earn less than Rs 15,000 a month, while income volatility and “thin-file” credit histories (limited or no prior credit history) limit their access to formal finance.
“Platform algorithms control work allocation, performance monitoring, wages, and supply-demand matching, raising concerns about algorithmic biases and burnout,” the report states.
It further states that limited skilling and fears of job losses due to technological advances such as artificial intelligence and machine learning add to worker vulnerability.
While the new labour codes have formally recognised gig workers by expanding social security coverage, welfare funds and benefit portability, the survey points out that going forward, greater algorithmic transparency and worker-friendly practices will be essential.
Also Read: ‘Bottom-up, application-focused’—Economic Survey on how AI should be deployed in India
Employment in manufacturing sector
The survey also highlights a growing shift in manufacturing employment towards larger factories, signalling an improvement in job quality and labour productivity.
In FY 2024, percent of large operational factories employed nearly 79 percent of the manufacturing workforce, while smaller units—those with fewer than 100 workers—accounted for over three-fourths of factories but employed only 21 percent of workers.
The survey notes that larger factories not only absorb a greater share of employment but also offer higher wages and generate higher net value added per person engaged, reflecting superior productivity levels.
Between FY 2014 and FY 2024, the number of large factories nearly doubled, growing by 97 per cent, compared to a 26 percent increase in smaller factories.
As a result, says the report, employment growth has been significantly faster in larger units, with total persons engaged rising at a compounded annual growth rate of 6 percent, against just 2 percent in smaller factories.
The survey views this trend as a positive structural shift, as employment in larger factories is typically more formal, better paid and more productive, strengthening the overall quality of manufacturing jobs.
Overall employment market
The Economic Survey has pointed out that India has recorded significant employment growth in recent years, supported by structural reforms, tax rationalisation, and a sustained focus on skill development.
“Measures such as deregulation, GST 2.0, and labour reforms implemented by states have contributed to rising labour force participation and employment growth across industry and services,” the survey states.
During April–September 2025 (the first half of FY2026), unemployment declined under the current weekly status even as labour force participation stabilised.
In the July–September quarter of FY 2026 alone, 56.2 crore people aged 15 and above were employed, reflecting the addition of 8.7 lakh jobs over the previous quarter, says the report.
The survey also highlights a sharp rural-urban contrast in India’s employment structure. In rural areas, agriculture accounts for nearly 58 percent of employment (underscoring its critical role in absorbing rural labour), while self-employment makes up about 63 percent of jobs, reflecting continued dependence on farm-based and own-account work.
On the other hand, urban employment is dominated by the services sector, which employs around 62 percent of workers, with regular wage or salaried jobs accounting for nearly half of total urban employment.
Despite a gradual shift towards non-farm activities, agriculture still accounts for over 42 percent of total employment at an aggregate level (urban+rural workforce).
The survey notes that this dependence of agriculture, especially in rural areas, combined with seasonal fluctuations in farm activity, highlights the need for targeted policies to improve job quality and income stability.
(Edited by Ajeet Tiwari)
Also Read: Economic Survey 2025-26: The top 10 takeaways for India