Emerging econmies like India face the challenge of decreasing number of formal jobs despite continuous economic expansion. However The creation of formal job is an agenda for the meeting of Sustainable Development goal. This study explores the trend of the creation of formal jobs in India and probes the determinants of formal sector employment in the country. Using the state level data of India for the period 2017-18 to 2021 to 2022 multivate panel data regression is deployed to assess the impact of economic expansion of payroll additions while controlling crime, credit and industrialization. The study finds that the growth in the economy, formal sector firms and capital expenditure have a significant positive effect on formal employment generation in Indian States. Rising informality is concern for policymakers. the finding will help stakeholders design suitable policy intervention to help the formalization of the economy.