Economic Survey 2024: 65% of the population under 35, yet many lack skills for a modern economy

As India’s economy grows, the creation of productive jobs becomes crucial for both growth and inclusivity, finds this year's Economic Survey. 

With a workforce of nearly 565 million, the distribution of employment remains a significant issue. While the services sector continues to be a major employer, the construction sector has gained prominence due to the government’s infrastructure push. 

However, the informal and low-paid nature of construction jobs highlights the need for better employment opportunities for those leaving agriculture. Additionally, despite a slow start, manufacturing has shown signs of rebounding since 2021-22.

India’s working-age population will continue to expand until 2044, necessitating the generation of nearly 7.85 million non-farm jobs annually to meet demand. This requires accelerating job creation in organized manufacturing and services while also enhancing agricultural productivity.

The skill gap is another pressing challenge, with 65% of the population under 35, yet many lack the skills required by a modern economy. Currently, only about 51.25% of the youth are deemed employable, though this is an improvement from previous years. The Ministry of Skill Development & Entrepreneurship’s 2022-23 Annual Report highlights several obstacles in the skilling and entrepreneurship landscape:

• Public perception that skilling is a last resort for those not pursuing formal academics.
• Disjointed skill development programs spread across multiple ministries without effective coordination.
• Inconsistent assessment and certification systems causing confusion among employers.
• Shortage of trainers and difficulty attracting industry practitioners as faculty.
• Mismatch between demand and supply at sectoral and spatial levels.
• Limited mobility between skill, higher education, and vocational programs.
• Low coverage of apprenticeship programs.
• Outdated skill curricula.
• Declining labor force participation rate among women.
• Predominantly unorganized sector employment with low productivity and no premium for skilling.
• Exclusion of entrepreneurship in formal education.
• Lack of mentorship and access to finance for start-ups.
• Insufficient focus on innovation-driven entrepreneurship.
• No assured wage premium for skilled individuals.

To address these issues, comprehensive efforts are underway, detailed in the employment chapter of the report. Solving these challenges is essential for India to harness its demographic dividend and ensure sustainable economic growth.