Punjab records highest informal workforce in region at 82%: Report

Chandigarh: Even as Punjab struggles with a high rate of joblessness, the state is recording one of the highest levels of informal employment and relatively poor job quality, pointing to gaps in formalisation and labour market stability.Punjab's unemployment rate for the 15 years and above age group stands at 5.3%, much higher than the national average of 3.1%. Apart from Punjab, states such as Goa (8.3%), Nagaland (6.7%), Arunachal Pradesh (6.6%) and Telangana (5%) also report higher unemployment rates than the national average, according to an SBI research report based on the Periodic Labour Force Survey 2025.In contrast, states such as Gujarat (0.9%), Madhya Pradesh (1.5%), Karnataka (2.3%) and Chhattisgarh (2.3%) exhibit comparatively lower unemployment rates, indicating relatively better labour market absorption and stronger employment generation capacity, and pointing to substantial regional disparities in labour market conditions across the country.The report highlights that Punjab also fares poorly on employment quality indicators. The Work Quality Index (WQI) is calculated using three employment protection indicators from the PLFS: written job contract, paid leave and social security benefits. Along with states like Uttar Pradesh and Bihar, Punjab shows both lower labour force participation and a lower worker quality index, reflecting limited access to secure, formal and better-paying jobs.A key concern flagged by experts is the dominance of informal employment in the state. Higher levels of informality in several northern and central states may be associated with the dominance of agriculture, casual labour and low-productivity employment activities. Punjab records the highest share of informal workers at 82%, highlighting the need for greater workforce formalisation and expansion of social security coverage. Punjab is followed by Uttar Pradesh and Bihar at 81%, and Rajasthan, Chhattisgarh, Andhra Pradesh and Madhya Pradesh at 74%, underscoring the scale of unregulated and socially unprotected employment. States with relatively diversified industrial and service-sector activities, such as Haryana (62%), Assam (63%), Tamil Nadu (64%), Telangana (65%) and Karnataka (65%), exhibit comparatively lower levels of informal employment.The report noted that informal workers remain predominantly rural in nature, with nearly 59% concentrated in rural areas, while urban areas account for around 41% of the informal workforce. The industry composition of informal workers indicates that agriculture remains the largest source of informal employment, accounting for nearly 42% of the informal workforce, followed by trade and hotels (17%) and other service activities (14%).Industry-wise analysis shows that workers engaged in manufacturing are 32% less likely to be employed in the informal sector, while those in trade and hotel activities are 16% less likely to be informal workers compared to agricultural workers. Similarly, workers engaged in the service sector are 31% less likely to be informal workers, whereas construction sector workers are 4.5% more likely to be engaged in informal employment.JOBS CRISIS State | Unemployment Rate Punjab | 5.3% Goa | 8.3% Nagaland | 6.7% Karnataka | 2.3% Nat'l avg | 3.1%