The Finance Ministry has reiterated a positive outlook for India’s employment landscape in its Monthly Economic Review for May 2025, citing a combination of official surveys and private-sector reports that point to sustained job creation, improved labour participation, and a rising shift towards formalisation.According to the latest Periodic Labour Force Survey (PLFS), the Labour Force Participation Rate (LFPR) among individuals aged 15 and above stood at 54.8%, while the unemployment rate edged up to 5.6% from 5.1% in April.
The rise in unemployment was largely seasonal, with a post-Rabi slowdown reducing rural employment in agriculture from 45.9% in April to 43.5% in May.
The report attributed some of the shifts to seasonal patterns, academic transitions, and weather-induced constraints on outdoor work, particularly in rural areas. Nonetheless, the broader hiring outlook remains firm.White-collar hiring rose marginally, with Naukri JobSpeak data showing 0.3% YoY growth, and demand soaring in sectors like AI/ML (+25%), insurance (+6%), and real estate (+5%). Job openings for senior professionals with over 16 years of experience also grew 6%.Also Read: How AI is changing hiring, salaries, and job roles across Indian companiesThe manufacturing and services sectors showed strong hiring activity, with the PMI Employment sub-index at 54.9 and 57.1, respectively—marking multi-month highs.Private forecasts suggest the trend is likely to hold. TeamLease’s Employment Outlook Report estimates net employment growth of 2.8% for H1 FY26, with 47% of employers planning to expand their workforce. It also highlighted a shift towards quality hiring, with higher emphasis on skills and retention.The ManpowerGroup Employment Outlook Survey found India to have the second-strongest hiring sentiment globally, with a net employment outlook of 42% for the July–September quarter—12 percentage points higher year-on-year.Meanwhile, job formalisation remains on the rise. The Employees’ Provident Fund Organisation (EPFO) saw net subscriber addition of 19.1 lakh in April, with nearly 58% of new members aged between 18–25 years—indicating continued formal workforce entry by young jobseekers.The Finance Ministry also noted that over 30.9 crore unorganised workers have been registered under the e-Shram portal as of June 24, allowing access to social security schemes via a Universal Account Number (UAN).Overall, the review underlined a stable labour market supported by encouraging hiring trends, strong participation from younger cohorts, and continued momentum in both formal and informal segments.
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