Muslims in India’s Economic Sphere

Dr Khalid Khan

Muslims represent the second largest religious group and the largest religious minority community in India. As per the census 2011, they constitute 14.2 per cent of the total population of the country. Several studies have shown that Muslims are lagging in terms of most of the indicators of human development. They are the poorest, educationally backward, and politically least represented groups in India. Their representation in government employment as well as organised sector is very low, forcing them to work in the unorganised private sector and petty self-employment. However, there is a paucity of literature documenting the status of Muslims in India. A few studies have highlighted their backwardness. The major findings emerging from the studies are that Muslims have the lowest average consumption level in both rural and urban areas, though their backwardness is more distinct in urban areas. The gap in poverty between Hindu and Muslim is high. Muslims are lagging in terms of wellbeing measures also. Muslims face poorer access to infrastructure, health, and transport facilities. The Report of the Expert Group to propose a Diversity Index and workout the Modalities of Implementation (GoI, 2008) shows little participation in almost every sector from the Muslim community. Thus, they score significantly lower on a range of socio-economic indicators compared to other sections of the population, and their representation in the political sphere also is poor. Recent years, particularly after the Sachar Committee, have witnessed an increasing attention towards their ‘development deficit.’ The Sachar Committee report still remains the comprehensive document of the status of Muslims in India. It is thus important to examine the current status of Muslims based on the available data. This paper examines the situation of the Muslim minority in employment and education, based on the national sample survey data on employment, unemployment and education. The paper also documents the evidence of religion-based discrimination with regard to the Muslim minority in India.


According to the periodic labour force survey data 2017-18, Muslims constitute 11.0 per cent of total workers in India. Their share is 10.2 per cent of total employment in rural areas and 13.9 per cent in urban areas. The data show higher concentration of Muslims in casual labour and self-employment while their share in regular jobs is low. The share is 52.6 per cent for self-employment, 26.5 per cent for casual labour while the regular salaried jobs constitute only 20.9 per cent of the total workers among them. Given that the social security benefits and long-term contract are not available for the casual labour, high concentration of Muslims itself represents their vulnerable state of affair in labour market. The regular salaried job constitutes nearly 23 per cent of the total workers among Hindus while the share is 24.8 per cent for casual workers. This is to note that the gap is sharp with Hindu High Caste (HHC). The regular salaried jobs constitute 33 per cent of the workers among Hindu High Caste (HHC). Further, a high concentration in self-employment is indicative of the fact that they are ghettoised into the petty businesses with low working capital since the self-employed HC are in economically better condition than Muslims as is evident from the gap in average per capita monthly consumption expenditure. The regular salaried workers among HHC are also economically better off than those among Muslims.

The distribution of workers by occupation shows that Muslims are highly concentrated in the industrial sector and low-quality employment such as craft and related works, plants and machine operators and elementary occupations. The craft and related workers constitute 21 per cent of total workers among Muslims while the corresponding share is 10.5 per cent among Hindus and 8.8 per cent among HHC. The elementary occupation comprises 23.3 per cent of the total workers among Muslims while this figure is 26.2 per cent among Hindus and 13.9 per cent among HHC implying that non high caste Hindus pulls the overall share upward.

In terms of industries, Muslims are highly concentrated in manufacturing, trade and construction activities. High concentration in manufacturing, trade and construction along with high share in self-employment at low income indicates the high share of Muslims in private enterprises with very low working capital.

Low access to education

The role of education in overall economic development is well recognised. Expenditure on education is an investment and hence leads to formation of human capital. In this regard, the role of higher education is paramount. In India, equity in higher education has always been a challenge. Despite expansion, access to higher education has been confined to the socially and economically well-off sections (Khan 2016). The access to higher education as measured by the Gross Enrolment Ratio (GER) has reached 26 per cent in 2017-18. However, the concern remains as to whether this increase has been equitable or not. Studies reveal that Muslims are lagging behind the other communities in terms of access to higher education (Khan 2018). They are lagging not only behind the OBC and high caste but also the SC. This is to note that other religious minorities such as Christians, Sikhs, Jain and Buddhists are also performing better than Muslims. This is confirmed from the latest National Sample Survey data on education. The GER is 16.6 per cent among Muslims while it is 27.8 per cent among Hindus. The GER among other religious minorities is also higher than Muslims. It is 33.6 per cent among Christians, 29.8 per cent among Sikhs, 72.1 per cent among Jains and 30.9 per cent among Buddhists.

It can thus be concluded that Muslims continue to be marginalised in the opportunity of enrolling in higher education even today in the country. Although their access to higher education has increased over time, this increase has not been enough to enable them to bridge the gap with their counterparts from the better off sections of the society.


There are only limited studies examining the existence of religion-based discrimination in labour market. The concerning aspect revealed from these studies is the indication of prevalent prejudices and discrimination against Muslims. Apart from the status of their representation on the basis of secondary data, a few field studies have also examined the existence of religion-based discrimination against Muslims based on the field level data particularly urban labour market. A study by Thorat and Newman (2010) based on the responses against jobs advertised by the private companies in several newspapers in Delhi examined discrimination in urban labour market in hiring. The result shows that job applicants with Muslim names were significantly less, likely to have a positive application outcome in the form of interview calls than equivalently qualified persons with a Hindu High Caste name.

Another study (Naik, Khan and Verma, 2018) shows the existing prejudices and discrimination based on the interview of workers in a housing society in Delhi NCR region. It explains the prevalence of low-quality employment among Muslims. The study, based on the response from seven respondents including three Muslims and four Hindus; unfavourable working conditions, low wages, delay and denial of payment of wages are problems which workers in the informal sector generally faced cutting across religion. However, the challenges specific to the Muslim workers were related to the existing prejudices against them. The field observation revealed a religion-based segregation among workers in the society. What is worth noting is that discrimination at entry level is highly prevalent. The response of supervisor (person who hires these workers) from the in-depth interview reflects the prejudices against Muslim labourers due to their food habits. The female domestic workers were also interviewed in this study. It revealed the process of discrimination against them as well. There are some cases wherein these women have developed coping strategies through name passing (i.e., changing names) and adopted Hindu customs for the sake of getting employment in the society. There were instances of discrimination being practised at work place and in wage rate. However, the support of locals may reduce the susceptibility of discrimination. One of the women responded that she could cope with the discrimination because of the support of one of the families, in beginning. After working for some time, she developed a positive reputation and thereafter her identity did not remain a barrier in her job. In a nutshell, it can be said that the vulnerability of Muslims in urban labour market is not the outcome of only their low level of human capital in terms of education and their weak economic background, but also the prevailing prejudices and discriminations in the society. Economic and socio-cultural factors together need to be tackled to address the challenge of religious discrimination experienced by Muslims in urban labour markets. However, there is a scope of reducing the intensity of discrimination through social interactions and developing a reputation through skills.


15th August 2021