Rajiv Lall explains in this Business Standard article that “The unemployment rate, as understood in the Organisation for Economic Co-operation and Development (OECD) world, is not a very useful indicator of the health of our labour markets. This rate has remained more or less stable at three per cent over the past decade. Indicators of changes in the structure of our labour markets provide more valuable insight about employment conditions. Our workforce, which is 482 million strong, up from 402 million in 2001, is largely self-employed or employed in low-paying casual jobs with no social protection. However, the share of regular wage-earning or salaried employees rose from 14.7 per cent in 2000 to 16.3 per cent of the labour force in 2010. In other words, we created close to 17 million regular wage-paying jobs over that period, which indicates overall improvement in our employment structure and, therefore, in employment conditions.
…. A distinctive feature of the Indian experience has been the stunted development of the country's manufacturing sector. Over the 2000-2010 period, the share of manufacturing in Indian GDP stagnated at 15 to 16 per cent, while the sector's share of the labour force has been stable at 11 per cent”.