Chapter 12 · Topic 12.3 · Prelims + Mains3 of 3
Employment: Chapter test
Key points
- Jobs strategy.
10 PYQs 2013–2026
Prelims box: facts and traps
| Scheme | Key facts |
|---|---|
| VB-G RAM G Act, 2025 | In force from 1 July 2026 across rural India; 125 days of guaranteed wage work a year per rural household; replaced MGNREGA, 2005 (100 days) |
| PM Viksit Bharat Rozgar Yojana | ELI scheme from 1 August 2025; outlay ₹99,446 crore; aims at more than 3.5 crore jobs; up to ₹15,000 to first-time EPFO employees, up to ₹3,000 a month per new hire to employers |
| National Career Service (2015) | Ministry of Labour and Employment portal linking all job seekers, employers and counsellors |
| DAY-NRLM (2011) | Self-help groups and skills for rural livelihoods. |
- Under VB-G RAM G, more than 99.5% of workers who demanded work were offered it and 5.20 crore person-days were generated by 22 July 2026 (Lok Sabha reply, PIB, 28 July 2026).
- Under MGNREGA, adult members of any household in rural areas willing to do unskilled manual work could seek work (Prelims 2011: Adult members of any household).
- Agriculture's share of usual-status employment was about 74 per cent in the NSS round of 1972-73 and about 46 per cent in PLFS 2023-24.
- Trap (UPSC Prelims 2017): “National Career Service is an initiative of the Department of Personnel and Training, Government of India” is incorrect. “National Career Service has been launched in a Mission Mode to improve the employment opportunities to uneducated youth of the country” is incorrect.
- Trap: The National Career Service is not a DoPT initiative and is not only for uneducated youth (Prelims 2017: Neither 1 nor 2).
Employment schemes
| Scheme | Key facts |
|---|---|
| VB-G RAM G Act, 2025 | In force from 1 July 2026 across rural India; 125 days of guaranteed wage work a year per rural household; replaced MGNREGA, 2005 (100 days) |
| PM Viksit Bharat Rozgar Yojana | ELI scheme from 1 August 2025; outlay ₹99,446 crore; aims at more than 3.5 crore jobs; up to ₹15,000 to first-time EPFO employees, up to ₹3,000 a month per new hire to employers |
| National Career Service (2015) | Ministry of Labour and Employment portal linking all job seekers, employers and counsellors |
| DAY-NRLM (2011) | Self-help groups and skills for rural livelihoods |
Under VB-G RAM G, more than 99.5% of workers who demanded work were offered it and 5.20 crore person-days were generated by 22 July 2026 (Lok Sabha reply, PIB, 28 July 2026). The guarantee remains demand-driven, with unemployment allowance.
Under MGNREGA, adult members of any household in rural areas willing to do unskilled manual work could seek work (Prelims 2011: Adult members of any household). The National Career Service is not a DoPT initiative and is not only for uneducated youth (Prelims 2017: Neither 1 nor 2).
Among the following who are eligible to benefit from the “Mahatma Gandhi National Rural Employment Guarantee Act” ?
- Adult members of only the scheduled caste and scheduled tribe households
- Adult members of below poverty line (BPL) households
- Adult members of households of all backward communities
- Adult members of any household
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Answer: (d) · UPSC official key
Consider the following in respect of ‘National Career Service’ : 1. National Career Service is an initiative of the Department of Personnel and Training, Government of India. 2. National Career Service has been launched in a Mission Mode to improve the employment opportunities to uneducated youth of the country. Which of the above statements is/are correct ?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Show answer
Answer: (d) · UPSC official key
Mains 2022: Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of society. Mains 2022 Mains 2016: “Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled, and creative.”
Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
“Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled, and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable?
Jobs strategy: what the data says
| Challenge | Response |
|---|---|
| Low female LFPR (34.6%) | Childcare, safe transport, flexible work |
| Higher urban unemployment (6.9%) | Manufacturing and services jobs, apprenticeships |
| Farm surplus labour | Food processing, rural non-farm work |
| Informality | Labour Codes, e-Shram, EPFO incentives |
Labour-intensive sectors such as textiles, leather, food processing, tourism and construction absorb the most workers per rupee invested; PLI and ELI aim to tilt growth towards them.
Mains box: analysis and answer points
- The guarantee remains demand-driven, with unemployment allowance.
- Likely next angle: NCS
- Asked: Mains 2022 (GS Paper II, 15 marks): Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
Practice
Practice MCQs (8)
In official labour statistics of India, the unemployment rate is defined as
Answer (b) & explanation
The unemployment rate (UR) is the number of unemployed persons divided by the labour force, multiplied by 100. The labour force is the sum of the employed and the unemployed, i.e. those working or seeking/available for work. Persons outside the labour force (students, those attending only to domestic duties, the retired) are left out of both numerator and denominator. The LFPR and WPR, by contrast, use the whole population as the base.
In the Periodic Labour Force Survey, the quality of regular wage/salaried jobs is judged partly by the following features:
1. No written job contract
2. Not eligible for paid leave
3. Not eligible for any social security benefit
4. Payment of wages on a piece-rate basis
How many of the above are among the three indicators that the PLFS uses to identify regular wage/salaried employees without job security or benefits?
Answer (c) & explanation
Three of the features are the PLFS indicators. For regular wage/salaried employees the survey reports the share with no written job contract, the share not eligible for paid leave and the share not eligible for any social security benefit (PF/pension, gratuity, health care and maternity benefit). Each of these marks an informal job even inside a regular wage arrangement. The mode of wage payment (piece rate or time rate) is not one of these indicators.
Bank branches automate cash handling and many tellers lose their jobs. At the same time, firms in the same towns report vacancies for data analysts that the former tellers cannot fill without retraining. The unemployment of these tellers is best classified as
Answer (c) & explanation
It is structural unemployment: jobs exist, but the workers' skills no longer match what employers need, here because of technological change. Such a skill mismatch lasts longer than a normal job search and needs retraining or relocation to cure. Technological unemployment is usually treated as a form of structural unemployment.
With reference to the Code on Wages, 2019, in force since 21 November 2025, consider the following statements:
1. Minimum wages apply to all employees, not only to those in scheduled employments as under the Minimum Wages Act, 1948.
2. The Central Government fixes a floor wage, and State Governments cannot fix minimum wages below it.
3. State Governments no longer have any power to fix minimum wages.
Which of the statements given above is/are correct?
Answer (a) & explanation
Statements 1 and 2 are correct. The Code on Wages, 2019 subsumed four laws, including the Minimum Wages Act, 1948, whose coverage was limited to scheduled employments; the Code makes the minimum wage a universal entitlement. It also lets the Centre fix a floor wage, taking into account minimum living standards, below which no State may fix its minimum wage. Statement 3 is wrong: the appropriate Government, Central or State, continues to fix and revise minimum wages above the floor.
Consider the following statements: Statement-I: A shift of workers from agriculture to industry and services tends to raise average labour productivity in the Indian economy. Statement-II: Output per worker in Indian agriculture is much lower than output per worker in industry and services.
Which one of the following is correct in respect of the above statements?
Answer (a) & explanation
Both statements are correct and Statement-II explains Statement-I. Agriculture employs a large share of India's workers but produces a much smaller share of GVA, so its output per worker is a fraction of that in industry and services. When a worker moves from a low-productivity to a higher-productivity sector, average productivity rises even if productivity within each sector is unchanged; this is the structural transformation (or reallocation) effect described by Lewis and Kuznets.
With reference to long-term changes in the structure of India's workforce, consider the following statements:
1. The share of agriculture in total employment has fallen from about three-quarters in the early 1970s to under half in recent Periodic Labour Force Survey rounds.
2. Construction was a major absorber of workers leaving agriculture during the 2000s.
3. Manufacturing now employs a larger share of India's workforce than agriculture.
Which of the statements given above is/are correct?
Answer (d) & explanation
Statements 1 and 2 are correct. Agriculture's share of usual-status employment was about 74 per cent in the NSS round of 1972-73 and about 46 per cent in PLFS 2023-24. Much of the labour that left farming in the 2000s went into construction, a low-skill, largely informal sector, as the ILO-IHD India Employment Report 2024 notes. Statement 3 is wrong: manufacturing employed only about 11-12 per cent of workers in PLFS 2023-24, far below agriculture, which is why India's transition is described as service- and construction-led rather than manufacturing-led.
Consider the following statements about W. Arthur Lewis's model of 'economic development with unlimited supplies of labour' (1954):
1. The traditional (subsistence) sector holds surplus labour whose marginal product is negligible.
2. The modern (capitalist) sector can draw labour from the traditional sector at a roughly constant wage set a little above subsistence.
3. Expansion of the modern sector is driven by the reinvestment of its profits.
4. The 'Lewis turning point' is reached when the modern sector begins to shed labour back into agriculture.
How many of the statements given above are correct?
Answer (c) & explanation
Statements 1, 2 and 3 are correct. Lewis (1954) split a developing economy into a subsistence sector with surplus labour and a capitalist sector that hires workers at a near- constant wage, reinvests its profits and so keeps expanding. Statement 4 is wrong: the Lewis turning point comes when the surplus labour has been absorbed, so the modern sector can attract more workers only by raising wages; it does not mean labour moves back to agriculture.
According to the Periodic Labour Force Survey Annual Report 2025 (January-December 2025), released in March 2026, consider the following statements about persons aged 15 years and above in usual status (ps+ss):
1. The labour force participation rate of women was about two-fifths.
2. The unemployment rate was the same for men and women.
3. Among youth aged 15-29 years, the unemployment rate in urban areas was higher than in rural areas.
Which of the statements given above is/are correct?
Answer (d) & explanation
All three statements are correct (as released on 27 March 2026). The female LFPR was 40.0 per cent (male 79.1 per cent; overall 59.3 per cent). The unemployment rate was 3.1 per cent for both men and women. Youth (15-29) unemployment was 9.9 per cent overall, 13.6 per cent in urban areas and 8.3 per cent in rural areas. These are survey estimates for calendar year 2025 and will be superseded by later rounds.
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Prelims PYQs on this topic (8)
With reference to the Indian economy after the 1991 economic liberalization, consider the following statements :
- 1. Worker productivity (₹ per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
- 2. The percentage share of rural areas in the workforce steadily increased.
- 3. In rural areas, the growth in non-farm economy increased.
- 4. The growth rate in rural employment decreased.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Statements 3 and 4 are correct (b). The answer draws on the NITI Aayog paper on India's changing rural economy (2017). Statement 1 is wrong because worker productivity rose in both rural and urban areas after 1991, though faster in towns. Statement 2 is wrong because the rural share of the workforce fell, as people moved to cities and towns. Statement 3 is right because within villages the non-farm economy (construction, trade, transport, services) grew fast and now makes up most of rural output. Statement 4 is right because rural employment growth slowed.
Notice the term "jobless growth", used for India's high GDP growth with weak job creation. The PLFS (Periodic Labour Force Survey) is now the main source on jobs.
Answer as per the official UPSC answer key.
Consider the following statements :
As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018
- 1. if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers
- 2. no notice of termination of employment shall be necessary in the case of temporary workman
Which of the statements given above is/are correct?
Answer (c) & explanation
Both statements are correct (c). The 2018 amendment to the Industrial Employment (Standing Orders) Central Rules allowed fixed-term employment in all sectors, not just apparel. Statement 1 is right because a fixed-term contract simply ends on its date. The employer need not follow retrenchment procedures or give compensation, which makes it easier to let workers go. Fixed-term workers still get the same wages and benefits as permanent workers. Statement 2 is right because the rules say no notice of termination is needed for a temporary workman, whether employed for a fixed term or not.
Notice the change since then: these ideas were included in the Industrial Relations Code, 2020. The four Labour Codes were brought into force in November 2025, and fixed-term workers became eligible for gratuity after one year.
Answer as per the official UPSC answer key.
The Service Area Approach was implemented under the purview of
Answer (b) & explanation
The Service Area Approach came under the Lead Bank Scheme (b). The Lead Bank Scheme, started by the RBI in 1969 on the Gadgil Study Group's advice, gave one bank the lead role in credit planning for each district. The Service Area Approach (SAA), introduced in 1989, went further. Each rural and semi-urban bank branch was given a set of villages and made responsible for planning and meeting their credit needs. It was relaxed in 2004, except for government-sponsored schemes. The IRDP (a), MGNREGS (c) and Skill Mission (d) are unrelated.
Notice the related bodies: District Consultative Committees and State Level Bankers' Committees. Today, financial inclusion relies more on Jan Dhan accounts and bank correspondents.
Answer as per the official UPSC answer key.
With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements :
- 1. It is the flagship scheme of the Ministry of Labour and Employment.
- 2. It, among other things, will also impart training in soft skills, entrepreneurship, financial and digital literacy.
- 3. It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Statements 2 and 3 are correct (c). Statement 1 is wrong because PMKVY, launched in 2015, is the flagship scheme of the Ministry of Skill Development and Entrepreneurship (MSDE), not the Labour Ministry. It is run through the National Skill Development Corporation (NSDC). Statement 2 is right because, besides trade skills, it trains people in soft skills, entrepreneurship, and financial and digital literacy. Statement 3 is right because its Recognition of Prior Learning (RPL) part tests and certifies informal workers against the National Skills Qualifications Framework (NSQF).
The scheme is now in PMKVY 4.0, with a focus on new-age skills such as AI, drones and coding. Notice the related Skill India Digital Hub and the PM Vishwakarma scheme (2023) for traditional artisans.
"Labour and Employment" sounds right for a jobs scheme. Skilling has had its own ministry since 2014.
Answer as per the official UPSC answer key.
Consider the following in respect of 'National Career Service' :
- 1. National Career Service is an initiative of the Department of Personnel and Training, Government of India.
- 2. National Career Service has been launched in a Mission Mode to improve the employment opportunities to uneducated youth of the country.
Which of the above statements is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). The National Career Service (NCS), launched in July 2015, is run by the Ministry of Labour and Employment, through the Directorate General of Employment, not by DoPT, so statement 1 is wrong. Statement 2 is wrong because it is not limited to uneducated youth. It is an online portal and a network of Model Career Centres that link all job seekers with employers. It also offers career counselling, skill information and job fairs, and it modernised the old employment exchanges.
Notice the related platforms: e-Shram for unorganised workers, Skill India Digital Hub, and the Employment Linked Incentive scheme from the 2024 Budget, which encourages formal hiring.
Answer as per the official UPSC answer key.
Pradhan Mantri MUDRA Yojana is aimed at
Answer (a) & explanation
MUDRA brings small entrepreneurs into the formal financial system (a). Pradhan Mantri MUDRA Yojana (2015) gives collateral-free loans to non-farm micro and small enterprises through banks, NBFCs and MFIs. It has slabs called Shishu (up to ₹50,000), Kishore (up to ₹5 lakh) and Tarun (up to ₹10 lakh). Since 2024, Tarun Plus goes up to ₹20 lakh. It is not a crop loan scheme (b), which is the Kisan Credit Card's job. It is not a pension scheme (c), which is NSAP's, and it does not fund NGOs (d).
MUDRA stands for Micro Units Development and Refinance Agency, a SIDBI arm that refinances lenders. Notice how the target is the "missing middle": the unfunded, informal small business.
Answer as per the official UPSC answer key.
Mains PYQs on this topic (2)
- UPSC Mains 2026 · GS Paper III · Q12How are startups in India promoting entrepreneurship, innovation and employment? Discuss the global and domestic challenges in their working and suggest suitable measures to overcome these challenges.How to approach: Intro: size of the ecosystem. Body: three contributions; global and domestic challenges; measures. Conclusion: depth over valuations.
- UPSC Mains 2025 · GS Paper III · Q14Examine the scope of the food processing industries in India. Elaborate the measures taken by the government in the food processing industries for generating employment opportunities.How to approach: Intro: sunrise sector. Body: (1) Scope (raw material, demand, exports); (2) Constraints; (3) Government measures for employment (PM Kisan SAMPADA Yojana, PLI fo…
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In 150 words, explain the significance of Employment with one recent example.
Flashcards (5)
Law that replaced MGNREGA?
VB-G RAM G Act, 2025 (from 1 July 2026).
Guaranteed days under VB-G RAM G?
125 a year per rural household.
PM-VBRY outlay?
₹99,446 crore.
Ministry behind National Career Service?
Labour and Employment.
Who could seek work under MGNREGA?
Adult members of any rural household.
In the news
- 23 Oct 2026PLFS changes from January 2027: new stratum for platform workers and unpaid work questions
- 21 Oct 2026Core sector grows 7.9% in September 2026; iron ore, electricity and coal lead
- 20 Oct 2026Financial inclusion saturation campaign in 2.70 lakh panchayats and ULBs from 21 October
- 15 Oct 2026PLFS September 2026: unemployment steady at 5%; urban women’s participation highest since October 2025
Next chapter · 13. Poverty & Inclusive Growth →Poverty & Inclusive Growth: Measuring povertySyllabus: GS-III · Indian Economy and issues relating to planning, mobilization, of resources, grow…