Labour Market Dynamics in Million-Plus Cities: Key Findings

The National Statistics Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), has released two new reports providing city-level estimates for India’s 46 million-plus cities. The reports combine data from the Periodic Labour Force Survey (PLFS) 2025 and the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025, offering one of the most detailed statistical pictures yet of labour markets and small businesses in India’s largest urban centres.

The findings indicate that India’s biggest cities continue to play a leading role in employment generation, entrepreneurship, and economic output. Labour force participation has steadily increased since 2017-18, unemployment has declined, and workers generally earn more than the urban national average. At the same time, unincorporated enterprises in these cities generate a disproportionately large share of economic value despite accounting for a relatively smaller share of establishments.

The reports also introduce official city-level labour market and enterprise statistics for the first time, giving policymakers, businesses, researchers, and investors more granular data to understand how India’s urban economy is evolving. These estimates cover the period from January to December 2025 and are based on the 46 cities with populations exceeding one million according to the Census 2011.

Key Highlights

• Labour Force Participation Rate (LFPR) in million-plus cities increased to 52.4% in 2025, up from 47.7% in 2017-18.
• Female labour force participation rose significantly from 19.8% to 27.2% during the same period.
• Overall unemployment declined from 7.9% to 4.9% between 2017-18 and 2025.
• Workers in India’s largest cities earned higher average incomes than workers in urban India across self-employment, salaried jobs, and casual work.
• The 46 million-plus cities account for 13% of India’s unincorporated establishments, 16% of employment, and 21% of Gross Value Added (GVA) in the unincorporated non-agricultural sector.
• Cities such as Greater Hyderabad, Delhi, Surat, Kolkata, Pune, and Pimpri Chinchwad emerged among the strongest performers across employment, entrepreneurship, and productivity indicators.

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India’s Largest Cities Continue to Strengthen Labour Markets

The labour market data shows a gradual improvement over nearly eight years. The Labour Force Participation Rate (LFPR) increased from 47.7% in 2017-18 to 52.4% in 2025, while the Worker Population Ratio (WPR) rose from 43.9% to 49.8%. This means a larger share of people are both participating in the labour market and finding employment.

One of the most notable developments is the improvement in women’s participation. Female LFPR increased by 7.4 percentage points, reaching 27.2%, while female WPR increased from 17.9% to 25.5%, indicating that more women are entering and remaining in the workforce.

Meanwhile, unemployment has steadily declined. Overall unemployment fell from 7.9% in 2017-18 to 4.9% in 2025, while male unemployment dropped from 7.5% to 4.5%. Female unemployment also declined to 6.1% after peaking in 2018-19.

The survey also found that workers in million-plus cities are more likely to have regular salaried jobs than workers in other urban areas.

• Regular wage/salaried employment: 58.5% in million-plus cities vs 42.9% in other urban areas.
• Casual labour: 6.3% vs 14.4%.
• Agriculture employs only 1.6% of workers in these cities compared with 10.1% in other urban areas, reflecting their service- and industry-oriented economies.

Higher incomes also distinguish these cities.

Average monthly earnings reached: ₹30,858 for self-employed workers, ₹28,808 for regular salaried workers, and ₹624 per day for casual workers. Each of these earnings levels exceeded the corresponding urban India averages.

Unincorporated Businesses Remain a Major Driver of Urban Growth

The second report focuses on India’s unincorporated non-agricultural sector, which includes millions of small businesses operating outside the corporate sector.

Although the 46 million-plus cities account for only 13% of establishments, they generate 21% of the sector’s Gross Value Added (GVA). This indicates that businesses in larger cities are generally more productive than those elsewhere.

Several cities stood out:

• Kolkata, Surat, and Greater Hyderabad together account for more than 22% of all unincorporated establishments across million-plus cities.
• Greater Hyderabad, Delhi, and Kolkata employ around 22% of the workforce in these enterprises.
• Pimpri Chinchwad, Greater Hyderabad, and Delhi recorded the highest GVA per worker.
• Faridabad, Pimpri Chinchwad, and Greater Hyderabad led in GVA per establishment.

The report also highlights stronger business productivity in large cities.

Compared with other urban areas:

Female Entrepreneurship and Employment Continue to Expand

The reports point to growing participation by women in both employment and entrepreneurship.

More than 20% of businesses are women-owned in 32 of the 46 cities. Female-owned businesses account for over 40% of all establishments in Surat, Vadodara, and Pune, making them among India’s strongest centres for women entrepreneurs.

Women also represent more than 30% of the workforce in the unincorporated sector in 19 cities. Cities such as Srinagar, Greater Hyderabad, and Delhi also reported the highest proportion of businesses employing hired workers on a regular basis, reflecting stronger formalisation within the unincorporated sector.

Why This Matters

India’s economic growth is becoming increasingly urban-led. The country’s largest cities generate a disproportionate share of jobs, enterprise activity, services, manufacturing, and innovation.

These reports provide policymakers with detailed city-level data instead of relying only on national or state averages. This can help governments design targeted employment policies, improve urban infrastructure, support entrepreneurship, and allocate public resources more efficiently.

For businesses and investors, the findings identify cities where labour markets are expanding, productivity is higher, and entrepreneurship is stronger. Researchers can also use these datasets to study urbanisation, labour mobility, women’s employment, and regional economic development.

ChartForest Analysis

The reports reinforce several long-term trends shaping India’s urban economy.

First, the gradual rise in labour force participation since 2017-18 suggests that India’s largest cities have continued to create employment opportunities despite disruptions caused by the COVID-19 pandemic. Female participation has improved meaningfully, although it remains well below male participation, indicating that significant untapped labour potential still exists.

Second, the large productivity gap between million-plus cities and other urban areas highlights the economic advantages of urban agglomeration. Better infrastructure, larger consumer markets, deeper supply chains, and greater access to skilled workers likely contribute to higher GVA per worker and per establishment.

Third, the growing presence of women entrepreneurs in cities such as Surat, Vadodara, and Pune reflects broader structural changes in India’s urban business environment. Continued access to finance, digital payments, and government support schemes could further strengthen this trend.

Looking ahead, several indicators deserve close monitoring:

• Whether the female labour force participation continues to rise.
• Growth in regular salaried employment versus informal work.
• Productivity improvements in smaller cities outside the million-plus category.
• Expansion of hired-worker establishments as businesses formalise.
• Future city-level PLFS and ASUSE releases, which could reveal emerging regional growth hubs beyond traditional metropolitan centres.

Source: MoSPI