Manufacturing Push To Transform India’s Workforce: SBI Research

Despite this long-term shift, agriculture continues to employ a significant portion of the workforce, highlighting persistent dependence on the sector. Manufacturing Push and Enterprise Trends Employment in larger enterprises has increased, supported by policy measures aimed at boosting manufacturing. “Large enterprises (over 20 workers) now employ 13.7 per cent of the workforce... significantly higher than 10.8 per cent in 2024 with the government’s renewed push on manufacturing,” the report added. At the same time, small and informal enterprises continue to dominate. Non-agricultural firms with fewer than 19 workers employ over 42 per cent of the workforce, reflecting the fragmented nature of India’s labour market. The report observed that labour-intensive sectors such as apparel, footwear, and furniture remain largely small-scale, underscoring the need for policies that channel capital into employment-intensive industries. Government initiatives such as the Production Linked Incentive (PLI) scheme are contributing to improved job creation in larger manufacturing firms. Labour Participation and Regional Trends The Labour Force Participation Rate (LFPR) for individuals aged 15 years and above stood at 59.3 per cent in 2025. Male participation was significantly higher at 79.1 per cent, compared to 40 per cent for females. The report also highlighted regional variations in employment conditions. States including Gujarat, Madhya Pradesh, Karnataka, and Chhattisgarh recorded relatively lower unemployment rates, indicating better labour absorption capacity. Informality Remains a Key Concern Informal employment continues to dominate the labour market, with agriculture accounting for nearly 42 per cent of the informal workforce. The findings underline the need for sustained policy focus on formalisation, productivity enhancement, and job creation in non-farm sectors. The analysis is based on PLFS 2025 unit-level data covering more than 2.7 lakh households and 11.48 lakh individuals across rural and urban India. (KNN Bureau)