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Our apartment building in Bengaluru is undergoing its once-in-a-decade exterior repaint. The contractor is the same man who did the job ten years ago—and who also painted my house five years back. A decade ago, his labour came from Odisha. This time, the workers are from West Bengal.
Out of curiosity, and in my own quiet way, I checked. They are indeedfrom Bengal. I have encountered similar stories before youngsters from the North East working as security guards through ex-servicemen–run agencies, some doubling up as caddies on golf courses.
What began as casual observation turned into a rare opportunity for extended conversations and first-hand insights into what is happening on the ground. That so many travel such distances for unskilled work speaks volumes. Interestingly, they are paid handsomely, often far above local minimum wages, with accommodation, water, and electricity provided when the work is residential. These interactions have fed directly into my ongoing work on unemployment in India, more on that in due course.
In India, the line between “employed” and “unemployed” is far more blurred than official statistics suggest. The formal sector, with fixed salaries, taxation, and compliance, offers stability but often modest take-home pay. In contrast, the informal sector—employing nearly 85–90 percent of the workforce—operates outside this system. Income here is
neither documented nor taxed, invisible to policymakers but very real to households.
A driver, electrician, delivery rider, mason, or small vendor may be labelled self-employed, informally employed, or even unemployed if their work does not fit survey definitions. Yet many routinely earn more in hand than graduates in entry-level formal jobs. A delivery rider can take home ₹25,000–35,000 a month; a cab driver may earn more on good routes; a mechanic or technician can make ₹1,000–3,000 a day in peak season. None of this enters the tax system, but all of it supports families directly.
This hidden economy creates outcomes that surprise traditional economists. Children of informal workers study in good schools and colleges; families buy two-wheelers and even homes; consumption patterns resemble those of the middle class. The “poor” in data are often not as poor in reality, because surveys miss cash earnings and the high-
velocity nature of informal income. Conversely, a formally employed youth earning ₹22,000 a month—after PF deductions and rent—may struggle more than a self-employed delivery rider whose entire income is in hand.
The paradox is stark. India’s unemployment figures look worrying, yet social mobility often exceeds what the numbers predict. The real issue is not always joblessness, but the mismatch between recorded employment and actual earning capacity.
And yet, this does not diminish the core problem. The system has failed to generate sufficient formal employment for a rapidly expanding youth population. Each year, millions enter the workforce with aspirations shaped by education, connectivity, and awareness. The formal sector—defined by contracts, social security, and predictability—has simply not grown fast enough to absorb them.
As a result, young people are pushed into informal or precarious work: viable in the short term, but offering limited security, skill progression, or long-term stability. This constrains individual potential and weakens the economy’s future capacity for innovation, taxation, and sustained growth.
The mismatch between education and employable skills only deepens the problem.
Demography, often celebrated as India’s dividend, risks becoming a liability. Employment is not an automatic by-product of growth; it is the outcome of deliberate policy choices on education, industrial strategy, labour regulation, and investment. Until we create pathways for dignified, large-scale formal work, India will continue to live with this dual reality.
Many who appear “unemployed” earn well, while the absence of formal employment remains the country’s most unresolved economic challenge.
These pieces are being published as they have been received – they have not been edited/fact-checked by ThePrint.