Changing Landscape of Employment in India

Syllabus: GS3/Economy; Employment

Context

• India faces persistent challenges in integrating these graduates into meaningful, stable employment, despite the large talent pool graduated across India every year.

India’s Employment Landscape

• Youth Employment Crisis: According to the India Employment Report 2024 by the International Labour Organization (ILO) and Institute for Human Development (IHD), youth account for 83% of India’s unemployed population.
  • Over half of graduates are not job-ready, lacking basic digital and professional skills.
  • Only about 3.7% of the workforce has formal vocational training.
• Economic Survey 2023–24 further underscores by stating that only half of India’s youth are job-ready post-graduation.
  • Many lack essential digital and professional skills — at a time when AI and technological change are disrupting traditional job roles, especially in the tech sector.
• Formal vs Informal Work: Employees’ Provident Fund Organisation (EPFO) data shows steady rise in formal sector participation, especially among youth aged 18–25.
  • 90% of employment remains informal, with limited social protection. (India Employment Report 2024)
  • Young professionals, especially fresh graduates, dominate new enrolments.
• Digital Deficiencies Among Youth: Digital illiteracy is a major hurdle:
  • About 75% of youth struggle with sending an email with an attachment.
  • Nearly 60% can’t perform basic file operations.
  • Almost 90% lack spreadsheet skills such as using formulas.
• These deficits are alarming given the World Economic Forum’s Future of Jobs Report 2025, which predicts:
  • 170 million new jobs by 2030 (14% of total employment);
  • 92 million jobs displaced (8%);
  • Net growth of 78 million jobs, requiring new skills and competencies.
• Structural Challenges:
  • Jobless growth continues despite India becoming one of the world’s largest economies.
  • Automation and AI threaten traditional roles, especially in tech and services.
  • Gender gaps and social inequities persist, with SC/ST communities overrepresented in low-paid, informal jobs.

Related Key Efforts & Initiatives

• Skill Development & Training:
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Offers short-term skill training aligned with industry needs.
  • National Apprenticeship Promotion Scheme (NAPS): Incentivizes employers to engage apprentices.
  • Jan Shikshan Sansthan (JSS): Targets non-formal skill training for disadvantaged groups.
  • Craftsman Training Scheme (CTS): Operates through ITIs to build technical skills.
• Employment Generation Schemes:
  • MGNREGS: Provides 100 days of wage employment annually to rural households.
  • Prime Minister’s Employment Generation Programme (PMEGP): Supports micro-enterprises and self-employment.
  • Deen Dayal Antyodaya Yojana (DAY-NULM & DDU-GKY): Focuses on urban and rural livelihoods respectively.
• Production-Linked Incentive (PLI) Scheme: ₹1.97 lakh crore outlay across 14 sectors to boost manufacturing and create 60 lakh jobs over five years.
• Budget 2024–25: ₹2 lakh crore package to support 4.1 crore youth over five years.
  • Internship scheme for 1 crore youth with ₹5,000 monthly allowance.
  • Skilling of 20 lakh youth and upgrading 1,000 ITIs.

Way Forward: Critical Reforms

• Industry-Academia Collaboration: Mandate formal industry partnerships for every higher education institution to bridge the gap between theoretical education and job skills.
• Accountability in Higher Education: Institutions need to be held accountable for student placements, not just academic output.
  • Accreditation systems should be linked to employment outcomes. 
  • Labs like Idea Labs and Tinker Labs need to become standard in all schools and colleges.
• Curriculum Modernisation: Integrate humanities, foreign languages, and soft skills at every level of education. These skills are vital for global employability and adaptability in a rapidly changing job market.
• Global Skilling Strategy: Design skilling programmes aligned with international demand — especially in ageing Western societies facing labour shortages.
  • Projects like Link4Skills already lay the groundwork for international migration based on skill corridors.
• Establish Indian Education Services: A dedicated Indian Education Services — modelled on the IAS — should be formed to bring top talent into education policy and administration.
  • Additionally, professionals from industry need to be allowed to teach, ensuring students benefit from both academic and practical insights.

Conclusion

• Youth dividend may turn into a demographic burden, without urgent and strategic reforms in education and employment systems. 
• Bridging the skill-employment gap is not just an economic imperative—it’s a national priority for long-term stability and prosperity.

Source: TH