Only 9 per cent Indians have contracts, monthly salary

Only 22 Indians out of 100 take regular salaries home; and only nine of them have formal contracts or appointment letters. As many as 58 out of 100 happen to be self-employed, a third of whom are unpaid homemakers and family workers. The bleak picture is part of the Indus Valley Report 2025 released by Blume Ventures earlier this week.

By way of comparison, the report tells us that as against 9 per cent in India, 93 per cent of the workforce in Russia, 68 per cent in Brazil, 52 per cent in China and 42 per cent even in Bangladesh enjoy formal employment and regular salaries. In India, 13 per cent more take home regular salaries — bringing the total to 22 — but without formal contracts.

Explaining why the unemployment rate is so high among graduates and above, the report quotes the principal of a college in Ahmedabad as saying that none of his students would be willing to take on jobs involving field work. They all wanted a corporate set-up, a laptop and weekends off with a minimum salary of Rs 30,000 a month. The unemployment rate among this segment is a staggering 28.7 per cent, states the report, and points out that graduates and post-graduates want ‘AC’ or ‘government’ jobs.

The report also states that compared to China, where the priorities have been ‘engineering, engineering and engineering’ besides science and technology, in India, the focus has been on Humanities, Business and Law.

Government jobs are few but pay better than similar jobs in the private sector, the report points out, citing the example of government school teachers, whose salaries are six to seven times higher than most teachers in private schools. This is also the reason India sees 5 million candidates apply for 60,000 posts in Uttar Pradesh Police, to cite just one example.

India also has fewer government employees proportionately than many other countries, including China, US and Brazil. While India has 16 government employees for every 1,000 people, the figures for Brazil, US (before Trump’s second term) and China are 117, 77 and 57 respectively.

India also spends far less on education, formal skilling and training. While 96 per cent of the workforce in South Korea have received formal training and acquired the required skills, the corresponding figure for India is just 2.3 per cent. Could it be the reason why manufacturing in India is much more capital-intensive than what is required to absorb people into manufacturing jobs?

Indian economy has been largely fuelled by domestic consumption and not export-led as in China, South Korea and Vietnam. The report, in fact, holds that India is not one country but actually three countries, which can be called India 1, India 2 and India 3.

There are only 30 million Indians in India 1, which would rank among high-income countries. These are the three crore Indians who fly, buy high-end apartments and cars, and are blissfully ignorant about the other two Indias.

As many as 100 crore Indians living in India 3, the report bluntly states, live on just Rs 8,000 a month. They are not ‘monetisable’ and are practically out of the market, just one hospitalisation away from bankruptcy.

People in India 1 are, however, happy with apps, UPI payments and e-commerce. A wag commenting on this class said, “We can get bhujia for poha delivered in 10 minutes… by the time you squeeze in the lime juice, plate it and add dhaniya patta, voila, bhujia has arrived... we are superpowa,” adding wryly, “Or should I say super poha?”

The inequality is borne out by the statistics that while income tax return filers grew to 75 million, the number of taxpayers actually paying any income tax fell to 28 million or just 2 per cent of the population as against 10 per cent in China and 43 per cent in the US.