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Manufacturing Surge and Farm Job Decline Reshape India's Workforce: SBI Report

India's labour market is undergoing a structural shift as agriculture's workforce share declines from 66% in 1987-88 to 43% in 2023-24, according to an SBI Research report. Manufacturing and services are gaining ground, with large enterprises now employing 13.7% of the workforce, up from 10.8% in 2024. The PLI scheme and manufacturing push are improving employment opportunities in larger firms. However, informal employment still dominates, with agriculture remaining the largest source of informal jobs.

Key Points: Manufacturing Push, Farm Job Decline Reshape India Workforce

  • Agriculture workforce share declined from 66% to 43% over 37 years
  • Large enterprises now employ 13.7% of workforce, up from 10.8% in 2024
  • PLI scheme boosts manufacturing jobs in larger firms
  • Female LFPR at 40% vs male LFPR at 79.1% in 2025
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Manufacturing push, decline in farm jobs, reshape India's workforce: SBI Report

SBI Report: Agriculture's workforce share drops to 43% as manufacturing rises. Large enterprises now employ 13.7% of workers. Key shifts in India's labour market.

"India's labour force is undergoing structural transformation with the share of agriculture in the workforce witnessing a modest 23% decline from 66% in 1987-88 to 43% in 2023-24 over a 37-year period - SBI Research"

New Delhi, May 8

India's labour market is undergoing a structural transformation driven by the country's broader economic transition, according to a report by SBI Research based on the latest Periodic Labour Force Survey 2025 unit-level data.

The report said that the share of agriculture in India's workforce has steadily declined over the decades, even as manufacturing and services gain ground.

"India's labour force is undergoing structural transformation with the share of agriculture in the workforce witnessing a modest 23% decline from 66% in 1987-88 to 43% in 2023-24 over a 37-year period," the report stated.

The report highlighted that despite the decline, agriculture still accounts for 43 per cent of India's workforce in 2025, underlining the continuing dependence on the sector.

It further noted that employment in larger enterprises has increased with policy support for manufacturing.

"Large enterprises (over 20 workers) now employ 13.7% of the workforce... significantly higher than 10.8% in 2024 with the government's renewed push on manufacturing," the report added.

According to the report, non-agricultural enterprises with fewer than 19 workers continue to employ over 42 per cent of workers, reflecting the dominance of small and informal enterprises in India's labour ecosystem.

The study observed that India's enterprises remain small in labour-intensive sectors such as apparel, footwear and furniture, and stressed the need for policy interventions that can channel more capital into employment-intensive industries.

The report said the government's Production Linked Incentive (PLI) scheme and focus on manufacturing are helping improve employment opportunities in larger firms.

On labour force participation, the report stated that the Labour Force Participation Rate (LFPR) for people aged 15 years and above stood at 59.3 per cent in 2025. Male LFPR was recorded at 79.1 per cent, while female LFPR stood at 40 per cent.

The report also pointed to significant regional disparities in employment conditions. States such as Gujarat, Madhya Pradesh, Karnataka and Chhattisgarh recorded relatively lower unemployment rates, indicating stronger labour market absorption.

SBI Research further highlighted that informal employment continues to dominate India's labour market, with agriculture remaining the largest source of informal jobs, accounting for nearly 42 per cent of the informal workforce.

The report is based on PLFS 2025 data covering over 2.7 lakh households and 11.48 lakh individuals across rural and urban India.

- ANI

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Reader Comments

V
Vikram M
The shift from farm to factory is inevitable, but the pace is slow. 37 years for a 23% decline? That's like watching paint dry! We need more skill training programs for rural youth. Also, informal jobs still dominate—42% of non-agricultural workers are in small enterprises. That's a lot of unorganised labour.
P
Priya S
Interesting data but concerning that Gujarat, MP, Karnataka have lower unemployment—what about states like UP and Bihar? The regional disparity is stark. Also, the report says large enterprises employ only 13.7%—that's still tiny. Our MSMEs need better policies to grow and create stable jobs. 👩‍💼
M
Michael C
Having lived in both India and the US, I see the same pattern—agriculture declines as economies develop. But India's challenge is the sheer scale: 43% of ~500 million workers is massive. The PLI scheme is smart, but will it create enough non-farm jobs fast enough? The 2.7 lakh household sample seems robust though.
R
Rohit P
Great news for manufacturing jobs! But 42% of workers in small enterprises with fewer than 20 people? That's the real story. My cousin runs a small textile unit—he's struggling with compliance costs. The government should simplify regulations for tiny businesses first. Also, what about the gig economy? No mention of that. 🤔
K
Kavya N
The female LFPR of 40% is disappointing. In rural areas, women do so much unpaid farm work but aren't counted. Also, the report says agriculture is the

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