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What is the nature of the employment problem that India faces? What kind of economic growth is required to address it? As India posits itself as one of the fastest growing major economies in the world, India Employment Report 2016 examines how the employment challenge undermines the substantial improvement that the economy has made in the last decade and a half. This report provides an in-depth review of the evolving characteristics of the country's labour force, develops new tools for a sharper analysis of the changes in employment conditions, and gives a clearer view of the state of employment in India. Presenting a comprehensive overview of the policy interventions that would be required for the development of India's growth strategy, the report brings out that pursuing a manufacturing-led growth strategy can help the country overcome this formidable challenge. This report has been prepared by the Institute for Human Development (IHD), New Delhi, under the institute's programme on labour markets and employment studies. This is the second report in the series of analytical reports being published biennially by the institute. The present report has been supported by the South Asia Research Network (SARNET) on Employment and Social Protection for Inclusive Growth, which has been initiated by the IHD in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) and International Labour Organization (ILO) with support from International Development Research Centre (IDRC), Canada.