India's million-plus cities reveal stark differences in jobs and pay

Cities drive prosperity. As hubs of talent, firms and investment, they lift productivity, jobs and living standards. Barely a third of India is urban, yet its cities account for much of the country’s output, and a single tier carries most of that weight — the 46 cities with a million people or more. 

Until last month, we could not read these cities individually since India’s statistical system was built to see states. That changed when the National Statistics Office released “Labour Market Dynamics in Million-plus Cities”, the first dedicated profile of all 46, made possible by a redesign of the Periodic Labour Force Survey, which from January 2025 treats each city as its own stratum. A first reading points to something most commentary misses: The important divide is not between these cities and the rest of the country, but between the cities themselves. 

That is easy to miss because on the headline measures the big cities look ordinary, their joblessness of 4.9 per cent sitting similar to urban India’s 4.8. But unemployment is only part of the story. Look instead at how many hours people work and what those hours earn, and the cities stop looking alike. They diverge in ways a national average would not reveal.  

In Chennai, the average worker puts in 45.6 hours a week, in Kolkata 46.4, and both are service economies, with roughly three in four workers in the tertiary sector and a little under a quarter in industry. At the level of broad sectors, the two look alike. Yet among regular salaried employees, a Chennai worker earns about ₹29,000 a month against ₹19,000 in Kolkata. This divergence widens beneath that. Only 51 per cent of Kolkata’s workers hold salaried jobs, against 71 per cent in Chennai, while 40 per cent are self-employed, against Chennai’s 24 per cent. Those self-employed earn ₹18,000 a month in Kolkata, against ₹30,500 in Chennai, barely three-fifths as much. Kolkata pushes more of its workers into working for themselves, but they still earn less. What a worker earns depends on the city in which they work, since the composition, quality and likely productivity of sectors vary across cities, and these differences are reflected in workers’ earnings. 

This is where the more familiar story about big-city jobs needs qualifying. It is true that these cities have more salaried work and higher average earnings than urban India as a whole. But an average can be lifted by a well-paid few while most workers see little of it. A city can post a respectable mean because its top firms pay well, even as the median clerk earns modestly. Million-plus cities offer higher wages than the rest overall, but the relevant question is not how high the average sits, it is how far those gains extend across the workforce. 

It becomes more concerning through the gender lens. A high female participation rate does not necessarily mean equitable earnings. Take Greater Visakhapatnam, where 34.6 per cent of women are in the labour force, healthy by Indian standards. Women there work about eight hours a week less than men, yet salaried women earn barely 54 per cent of what men do, ₹18,330 against ₹33,707. They put in four-fifths of men’s hours for half the pay. Women are present in the workforce but not rewarded within it: A gender penalty that participation figures alone conceal. 

Across the larger cities the same wedge recurs. In every one of the 13 with the largest samples, women in regular jobs earn less than men, the ratio running from Visakhapatnam’s 54 per cent to Delhi’s 89, and nowhere is the hours shortfall proportional to the pay shortfall. A rising participation rate can coexist with scarce opportunity. Young women outside employment, education and training outnumber young men in all 46 cities, and when asked why they remain outside, 68.7 per cent of women cite childcare and housework. For men, 1 per cent. 

Together, the two disparities describe one fact: The million-plus label denotes no single class of city. They vary enormously in what similar work pays, and, most of all, in how they reward women. Economists have long held that a city's value lies in the productivity gains of agglomeration and wages are the visible return on that density. When two equally large, equally service-heavy cities pay so differently for the same hours, and half a city’s female workforce is absent or underpaid, the agglomeration dividend is collected unevenly and, for women, largely forgone. 

The measurement now exists to see this. In building the first city-level portrait of urban work, the National Statistics Office has taken a step towards the evidence-based view that sound urban policy depends on. If productivity and reward diverge this widely among the 46 cities driving most of India’s output, the divergence in the smaller towns the survey does not yet reach is unlikely to be gentler. For city governments, the implication is direct: What matters is not the ranking on a headline rate but whether incomes rise for the many rather than the few, and whether the women who stand outside can be drawn in on terms worth accepting. These are the metrics on which India’s urban century will be judged.

The writer is chair, Institute for Competitiveness. With inputs from Meenakshi Ajith