Work that is real, fair, and reaches everyone.

Current incentives reward investment and output, not employment. The Production Linked Incentive scheme is credited with Rs 2.0 lakh crore of investment but only 12.6 lakh jobs ^[33] — roughly Rs 1.6 crore per job. Academic economists have questioned whether PLI generates genuine value addition or primarily subsidises assembly ^[23]; defenders argue it builds anchor investments and supply-chain depth over longer horizons. The evidence base for either claim is still accumulating.

We propose making the Employment Linked Incentive (ELI) scheme — Rs 99,446 crore, targeting 3.5 crore jobs via EPFO-verified payroll over August 2025 to July 2027 ^[34] — the template for all manufacturing support: pay for verified, sustained payroll additions, with higher rates for women workers and labour-intensive sectors (apparel, footwear, food processing, toys, furniture, electronics assembly). Sustain this envelope for five years rather than two.

Wage subsidies lower the marginal cost of hiring exactly where India has comparative advantage in abundant semi-skilled labour. EPFO verification makes the subsidy formalising by construction — firms cannot claim the incentive without registering workers. ELI is already budgeted ^[34]; the proposal is extension and deepening, not a new instrument.

Urban casual and gig workers have no income floor at national scale. Urban youth unemployment is 13.6% ^[1]. Rajasthan's pilot demonstrates that demand for urban public work exists, especially among women, and that implementation — not programme design — is the binding constraint ^[31][32].

We propose a national urban works programme in towns under one million population, starting at 50 days per household per year and scaling on evidence, drawing on the Azim Premji University Centre for Sustainable Employment design of 100 days at a statutory wage with works covering urban commons, care infrastructure, and civic services ^[35].

The MGNREGA evidence shows employment guarantees raise market wages for the lowest-income workers and self-target effectively ^[28][29]. Rajasthan shows that urban demand and women's uptake are real ^[31]. Phasing from small towns limits fiscal risk and allows iterative design improvement before national expansion.

Only 4.2% of the workforce has formal vocational training ^[1]. Apprentices are approximately 0.1% of the workforce against roughly 4% in Germany ^[18]. Short-term classroom skilling has demonstrably failed: approximately 18% placement under PMKVY's first seven years ^[19]; fewer than 10% placement under PMKVY 3.0 per Parliamentary Standing Committee scrutiny; placement tracking then dropped entirely under PMKVY 4.0 ^[20].

We propose shifting the marginal skilling rupee from short-term classroom training to employer-led apprenticeships: raise the National Apprenticeship Promotion Scheme (NAPS) stipend cost-sharing for employers, simplify compliance for MSMEs, mandate apprenticeship quotas in public-sector undertakings and large government contractors, and publish placement and retention outcomes per establishment on a quarterly basis. NAPS engaged approximately 42 lakh apprentices cumulatively over FY2018-19 to mid-2025 ^[18] — the pipeline exists but is small relative to the 78.5 lakh annual workforce entrants the economy needs to absorb ^[9].

Apprenticeships solve two binding constraints simultaneously: the information problem (employers can observe workers before committing to permanent hire) and the relevance problem (training happens on real equipment and real production lines). Germany's system demonstrates the outcomes possible when these conditions are met at scale ^[18], with the important caveat that India must concentrate initially on its formal-sector islands where the institutional preconditions already exist.

Female LFPR is 40.0% against 79.1% for men ^[1], and the recent rise in women's participation is concentrated in unpaid family helpers and own-account work rather than wage employment ^[7]. Public spending on the care economy is under 1% of GDP ^[22], leaving childcare almost entirely borne by women within the household.

We propose three mutually reinforcing components: (i) Universal public childcare in urban wards and industrial clusters, expanding the existing Palna and Anganwadi-cum-creche network to full coverage; (ii) State-built women's worker hostels at industrial nodes, on the Tamil Nadu SIPCOT model ^[27], as industrial infrastructure rather than welfare; (iii) Safe-transport corridors connecting residential areas to factory and service clusters.

Nine randomised evaluations across eight low- and middle-income countries find childcare access raises women's labour supply, but only where complementary barriers — safety, transport, social norms, job availability — are also addressed ^[21]. Tamil Nadu demonstrates the housing and safety channel at industrial scale: 33,360 women employed in a single plant supported by purpose-built accommodation ^[26][27]. The ILO estimates that direct public investment of 2% of GDP in care services could generate approximately 11 million jobs in India, with roughly 70% going to women ^[22] — the care sector is both an enabler of women's market work and a significant employer in its own right.

Only approximately 19% of MSME credit demand is met through formal channels; the unmet gap is estimated near Rs 80 lakh crore ^[10]. Credit-starved micro-firms cannot grow into employers. 56.2% of workers remain self-employed ^[1], many in enterprises too small to achieve productivity gains through scale.

We propose tripling the corpus and coverage of credit guarantees under CGTMSE, making Udyam, e-Shram, and GST data interoperable for cash-flow-based lending underwriting, and tying guarantee pricing to verified employment growth in borrower firms.

The binding constraint for MSMEs is collateral and credit-history information, not underlying bankability: between 2020 and 2024 the share of micro and small enterprises accessing scheduled-bank credit rose from 14% to 20% as digital underwriting spread ^[10]. Guarantee capacity and data interoperability scale that trend. Employment-linked pricing creates a direct incentive for firms to formalise workers in exchange for better credit terms.

7.1 crore construction workers, only about 5.65 crore registered for welfare coverage ^[14]; gig workers (77 lakh in 2020-21, projected to 2.35 crore by 2029-30 ^[12]) sit outside most social insurance; 31 crore e-Shram registrations exist but link weakly to any actual benefit ^[13].

We propose a portable benefits stack delivered through e-Shram: accident and health coverage, pension contributions co-paid by platforms and contractors, the BOCW cess (a 1% levy on construction project costs collected by state welfare boards but historically under-spent ^[14]) actually disbursed to registered workers, and PLFS-linked district labour dashboards published monthly.

Portability removes the mobility penalty informal workers currently face: benefits that are tied to a single employer or locality are forfeit when a migrant worker moves or a gig worker changes platforms. The Code on Social Security 2020 already provides the legal hooks for gig-worker platform contributions ^[12]. Registration without accessible benefits has no behavioural effect; tangible benefits make registration self-sustaining.