Substantial regional disparities in labour market conditions across India: SBI Research Report

India’s labour force is undergoing structural transformation with the share of agriculture in the workforce witnessing a modest 23% decline over a 37-year period while large enterprises( with more than 20 workers) now employing 13.7% of the workforce, significantly higher than 10.8% in 2024 on the back of government’s renewed push on manufacturing, the State Bank of India said in its research report.

According to the research report, released on Friday, there exists substantial regional disparities in labor market conditions across India.

“States such as Gujarat (0.9%), Madhya Pradesh (1.5%), Karnataka (2.3%), and Chhattisgarh (2.3%) exhibit comparatively lower unemployment rates, indicating relatively better labor market absorption and stronger employment generation capacity,” it said.


Titled ‘How India Works Today: Insights into Wages, Skills, and Informal Employment through the Lens of PLFS 2025’, the report uses unit level data for the first time.

The report further said that the industry wise employment quality shows female employment earning regular wages outpaces men in transport while in case of mining and industry, the share of female employment in regular wage is very low compared to men.

“States such as Karnataka, Tamil Nadu, Odisha have high employment quality as well as high labour force participation rate while UP, Bihar and

Punjab displays lower participation as well as lower worker’s quality index,” it said.

The report suggests the need for states to strictly implement the Minimum Wages Act, saying Chhattisgarh (~70%), Odisha (~66%), and Jharkhand (~65%) exhibit the highest incidence of workers earning below the statutory minimum wage.

Suggesting a greater need for formalisation, the report said Punjab records the highest share of informal workers at 82%, followed by Uttar Pradesh and Bihar at 81% each.

“Agriculture remains the largest source of informal employment, accounting for nearly 42% of the informal workforce, followed by trade and hotels (17%) with female workers (about 4.8%) more likely to be informal workers compared to male workers,” it added.