Economic Survey 2025-26 flags labour market progress, poverty reduction and Human Development gains

New Delhi [India], January 29 : India has recorded significant progress in the labour market, supported by regulatory reforms, expanded social protection, and targeted skill development initiatives, according to the Economic Survey 2025-26 tabled in Parliament by Finance Minister Nirmala Sitharaman on Thursday.
The survey notes that recent labour market indicators indicate improving employment conditions, driven by ongoing structural reforms. Monthly data from the Periodic Labour Force Survey (PLFS) show a largely stable labour market with seasonal variations, while quarterly averages indicate a decline in the unemployment rate and a stabilisation in labour force participation.
"India has witnessed improvements in the labour market, supported by a combination of regulatory reforms, expanded social protection, and targeted skill development initiatives. Recent labour market indicators suggest improving employment conditions supported by ongoing structural reforms. Monthly PLFS data show a broadly steady labour market with seasonal variations. The quarterly averages of monthly estimates point to a decline in the unemployment rate and a stabilising labour force participation rate," the economic survey 2025-26 said.
It also highlighted that the recognition of gig and platform workers, with provisions for their registration and inclusion in social security schemes, represents a step towards formalising non-traditional forms of employment.
Alongside this, government-led skilling initiatives have focused on improving employability through industry-aligned training. Together, these measures aim to strengthen labour market resilience, improve job quality, and align workforce capabilities with the needs of a rapidly changing economy.
"The union government's landmark step of notifying the implementation of the Labour Codes marks a significant reform in the regulatory framework. The consolidation of 29 central laws into four Labour Codes aims to simplify compliance, enhance labour market flexibility, and extend security to a broader section of the workforce, while maintaining safeguards for wages, occupational safety, and social security," said the economic survey.
"Importantly, the recognition of the gig and platform workers, with provisions to enable their registration and inclusion within social security schemes, marks a step towards formalising non-traditional forms of employment. Complementing these reforms, government-led skilling initiatives have focused on enhancing employability through industry-aligned training. Together, these measures aim to strengthen labour market resilience, improve job quality, and better align workforce capabilities with the requirements of a rapidly changing economy," the economic survey added.
On the social front, the survey said targeted welfare schemes, economic reforms, and expanded access to essential services have contributed to a reduction in poverty levels. In June 2025, the World Bank revised the international poverty line from USD 2.15 to USD 3.00 per day (PPP, 2021 prices).
"Social sector initiatives, supported by targeted welfare schemes, economic reforms, and expanded access to essential services, have contributed to a reduction in poverty levels. In June 2025, the World Bank revised the international poverty line from USD 2.15 to USD 3.00 per day (PPP, 2021 prices)," said the economic survey.
Based on the revised poverty benchmark, India's poverty rate in 2022-23 is estimated at 5.3 per cent for extreme poverty and 23.9 per cent for lower-middle-income poverty, though these estimates are not directly comparable with earlier poverty lines.
"Based on the revised poverty line, India's poverty rates in 2022-23 are estimated at 5.3% per cent for extreme poverty and 23.9% per cent for lower-middle-income poverty, noting that these estimates are not directly comparable with earlier poverty lines," the survey said.
The survey further noted steady improvement in key health and education indicators such as life expectancy, infant mortality rate (IMR), and gross enrolment ratio (GER), reflecting gains in overall health outcomes, maternal and child health, access to education, and human capital formation.
"Key health and education indicators, such Economic Survey 2025-26 as life expectancy, the infant mortality rate (IMR), and the gross enrolment ratio (GER), have shown steady improvement, indicating gains in overall health outcomes, maternal and child health, access to education, and human capital formation," said the economic survey," said the survey.
The survey said that the convergence of better human resource development outcomes and poverty reduction underlines the importance of inclusive growth, sustained social sector investment, and welfare measures in improving overall well-being and strengthening the economy's long-term resilience.
"The convergence of improved human resource development outcomes and poverty alleviation highlights the role of inclusive growth, sustained social sector investments, and welfare measures in enhancing overall welfare and strengthening the economy's long-term resilience," the survey said.