Independence Day 2026: 79 years of work, ambition and the making of modern India

Two generations ago, a secure livelihood meant a government job and a fixed pension. A generation later, it mostly became a private paycheck. Today, security comes from whatever skill has been acquired or the next gig worth pursuing. Three generations, three entirely different answers to the same question: what does a job actually guarantee?

From agriculture to AI, India's job market has passed through five distinct phases, “each defined less by which sector led and more by what employment offered the worker at the time,” says Anurag Malik, Partner and National Leader - People Consulting, EY India.

The first, roughly 1947 to the late 1980s, was the era of security when "government service and agriculture anchored the social contract, and a job typically meant a lifetime with one employer," Malik says.

That era's imprint has not fully faded. As Aditya Singh, founder and CEO of Benevolve, points out, "agriculture employs nearly 46% of India's workforce, despite contributing less than one-fifth of the country's GDP," even today.

For the four decades before India introduced the Liberalisation, Privatisation, and Globalisation (LPG) model in 1991, agriculture remained the backbone of India's job market. As late as 1983-84, nearly seven out of ten Indian workers were tied to the land, according to RBI KLEMS employment data — a workforce whose “job” often depended on inherited family plots and was vulnerable to the monsoon rather than the market.

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A government job was the other pillar—less a career choice than a guarantee of lifetime security. Through foundational initiatives like the National Employment Service (1945), the Craftsmen Training Scheme (1950), the National Council for Vocational Training (1956), and the Apprenticeship Act (1961), India laid the architecture of a planned economy trying to match workers to a limited, protected set of industrial and public jobs.

But job security did not always come with social security.

The Employees’ State Insurance Act 1948, the most comprehensive social security legislation providing work-related injury and death, sickness, maternity and separation benefits, covered only 7.75 million workers out of the total workforce of about 340 million in 2001.

1991: The shift towards an open job market

The 1991 economic reforms marked the defining turning point in India's employment landscape. "If I had to choose one, it would be 1991 — it is what made the IT boom possible at all, by giving capital and enterprise the freedom to let Indian talent be discovered by global markets," Malik told ET Online, describing the shift as employment moving "from being allocated to being earned in an open market."

The numbers back the scale of that opening. India’s trade - exports plus imports - rose from around 15% of GDP in 1980-81 to roughly 34% by 2005-06. Foreign direct investment went from 0.3% of GDP in 1991 to 5.8% by 2005, according to an International Labour Organization (ILO) report titled ‘Employment Challenge and Strategies in India.’

The IT boom: Bengaluru meets Boston

Phase three, says Malik, "globalised the value of Indian skill for the first time, with talent in Bengaluru competing directly with talent in Boston."

The scale of that shift is visible in the technology sector, which Benevolve’s Singh says now employs "over 5.8 million professionals".

The IT boom also changed the nature of India's job market, moving workers from what Singh calls "static careers" towards "continuous learning and skill evolution", where "job titles are becoming less important than the skills individuals possess."

Also read: India's education crisis: Overqualified yet underqualified

The skills gap

The employment picture, however, remained uneven.

In 2005, the "working poor" — Indians employed, yet unable to earn even a modest poverty-line income from that work — numbered an estimated 105 million, according to the ILO study.

The challenge has also been one of skills. Data cited by an Institute for Competitiveness report — Skills for the Future: Transforming India's Workforce Landscape — puts 88% of India's workforce in low-competency occupations, with high-competency positions accounting for 10-12% of employment opportunities.

The ILO's India Employment Report 2024 put the unemployment rate among young graduates at 29.1%, compared with 3.4% among young people who were illiterate.

While technology has moved from typewriters to AI, the gap between workers' skills and employers' needs remains largely unchanged.

The AI phase, and the return of an old debate

Akash Kumar, founder of WapHire, who spent seven years in hiring at Google, Amazon, and Walmart, says,"A lot of jobs have been disrupted. Those jobs are not even coming back... Even premium white-collar jobs are being disrupted."

He expects the shift to push more workers towards gig work, freelancing and smaller ventures built around niche skills, as companies automate tasks that once required much larger teams.

Kumar expects one segment of the job market to be comparatively insulated, noting that "blue-collar and grey-collar jobs... driving an Uber, being a guard or a maid... factories and labour work... will continue to thrive."

Malik offers a different view of AI's effect on work. EY's research across more than 10,000 tasks across critical Indian industries found AI is "largely unbundling jobs into tasks rather than replacing roles outright" and at the top of the skill pyramid, this is already paying off. This implies that opportunity lies in building continuous skilling infrastructure that lets workers evolve within a career, not just enter one.

EY's Future of Pay 2026 data shows skill premiums for AI, machine learning (ML), cybersecurity and cloud capabilities have risen by 30-40%, while "nearly half of Indian organisations" have moved to skills-based pay. The gap between that top tier and everyone else may emerge as the defining fault line of this fifth phase.

Towards 2047

India’s job market now needs greater ‘formalisation’ as the economy moves toward the ambition of Viksit Bharat 2047, which Malik calls "the natural next milestone for an economy that's expanded this quickly."

The government estimates that India's Global Capability Centre (GCC) ecosystem alone could employ 2.8 million professionals by 2030, alongside expected growth in manufacturing, semiconductors, renewable energy and logistics.

India's job market has changed almost beyond recognition in structure—from employment exchanges to AI-matched hiring platforms, from fixed careers to skills-based compensation, and from a single employer for life to a portfolio of gigs.
What remains uncertain is what the next generation will expect a job to guarantee.