Indian government jobs shrink as wage bills rise, vacancies grow

India's total government jobs account for only about 4% of the country's 610 million workforce, according to economist Santosh Mehrotra. Central government sanctioned posts fell by nearly 75,000 between 2020 and March 2024, from 40.77 lakh to 40.03 lakh. By March 2024, nearly 8.5 lakh posts, about one in five, were vacant, as per the finance ministry's annual report. The share of vacancies was 21.1% in 2024, down from 24.2% the previous year, but still high.

Economist Jean Dreze said India needs more public jobs, dismissing the idea of a bloated public sector. He cited Jharkhand, where 40% of government primary schools have only one teacher, and noted many departments face severe staff shortages. Dreze said governments avoid hiring permanent staff because pay commission hikes raise the wage bill, leading to more contractual hiring. The Seventh Pay Commission, implemented in 2016, added an expected 0.65 percentage points to the expenditure-to-GDP ratio, costing over Rs 1 lakh crore.

The Indian Railways and the Home Ministry together account for three in four central government jobs. Group C posts (clerical, supervisory) make up nearly 90% of sanctioned posts, but 20% remain vacant. Group B non-gazetted posts have about 30% vacancies. Mehrotra noted that India's tax-to-GDP ratio has stayed at 17-17.5% for 35 years, limiting the state's capacity to hire. Student protests in Jharkhand and other states highlight frustration over recruitment delays of 3-4 years, often making candidates ineligible due to age limits.