12- Employment and Skill Development: Strengthening India’s Workforce for Future Growth
Introduction
Employment and skill development are key pillars of India’s economic growth and social stability. As one of the youngest nations in the world, with a median age of 28 years, India possesses a unique demographic advantage. However, to harness this demographic dividend, it is essential to ensure quality job creation, skill enhancement, and workforce participation across diverse sectors.
Key Highlights
- Declining unemployment rate: The unemployment rate dropped from 6% in 2017-18 to 3.2% in 2023-24, reflecting post-pandemic economic recovery.
- Rise in workforce participation: The Labour Force Participation Rate (LFPR) improved, reaching 60.1% in 2023-24, compared to 49.8% in 2017-18.
- Female workforce engagement: Female Labour Force Participation Rate (FLFPR) rose from 23.3% in 2017-18 to 41.7% in 2023-24, driven by rural employment and government initiatives.
- Skill development expansion: Various programs, such as the Skill India Mission, have trained millions of youth to meet industry demands.
- Increase in formal employment: The Employees’ Provident Fund Organisation (EPFO) membership rose to 32.7 crore in 2024, indicating higher workforce formalization.
India aims to bridge the skill gap, promote digital literacy, and expand job opportunities across both traditional and emerging sectors. This chapter explores India’s employment landscape, workforce trends, government initiatives, and the way forward for inclusive and sustainable job creation.
1. India’s Employment Landscape
1.1 The State of Employment in India
- India’s working-age population (15-59 years) is increasing rapidly:
- 735.4 million (2011) → 988.5 million (2036, projected).
- Unemployment Rate (UR) Trends:
- All-India unemployment rate decreased to 3.2% in 2023-24, from 6% in 2017-18.
- Urban unemployment reduced from 6.6% (Q2 FY24) to 6.4% (Q2 FY25).
- Labour Force Participation Rate (LFPR) increased to 60.1% in 2023-24, up from 49.8% in 2017-18.
1.2 Sectoral Distribution of Workforce
- Agriculture remains dominant, employing 46.1% of the workforce in 2023-24.
- Industry and services saw declines:
- Manufacturing fell from 12.1% (2017-18) to 11.4% (2023-24).
- Services employment decreased from 31.1% to 29.7% in the same period.
- Construction and trade sectors saw employment gains.
1.3 Women in the Workforce
- Female Labour Force Participation Rate (FLFPR) increased from 23.3% (2017-18) to 41.7% (2023-24).
- Rural FLFPR rose from 24.6% to 47.6%, reflecting employment shifts in agriculture and self-employment.
- State-wise trends:
- Sikkim recorded the highest FLFPR at 56.9% in 2023-24.
- 21 states have FLFPR between 30-40%.
2. Trends in Wages and Employment Quality
2.1 Wage Growth and Disparities
- Earnings by employment type (2023-24):
- Self-employed: ₹13,279/month.
- Regular salaried workers: ₹20,702/month.
- Casual laborers: ₹418/day.
- Wage trends from 2018-19 to 2023-24:
- Regular wages grew at 5% CAGR.
- Casual wages increased at 9% CAGR.
- Gender wage gap persists, with women earning 30% less than men.
2.2 Rural Wages and Trends
- Nominal rural wages grew at 5.7% for men and 7% for women (FY25).
- Real wage growth in agriculture (FY25):
- 0.6% for men, 1.8% for women.
2.3 Growth in Formal Employment
- EPFO membership increased from 29.9 crore (March 2023) to 32.7 crore (March 2024).
- Net additions to EPFO subscribers doubled from 61 lakh (FY19) to 131 lakh (FY24).
- Digital workforce recognition through eShram: Over 30.51 crore unorganized workers registered.
3. Government Initiatives for Employment Growth
3.1 Skill Development Programs
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Over 1.36 crore youth trained since 2015.
- SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion): 67% of trained beneficiaries were women.
- National Apprenticeship Promotion Scheme (NAPS): Over 16.5 lakh apprentices engaged.
3.2 Women Entrepreneurship Initiatives
- Startup India Initiative: 73,151 women-led startups recognized.
- Mudra Yojana: ₹23.2 lakh crore loans sanctioned, 70% to women entrepreneurs.
- Women Entrepreneurship Platform (WEP): Aggregates policies and funding support.
3.3 Labour Law Reforms
- New Labour Codes simplify 29 previous laws into 4:
- Code on Wages, 2019.
- Code on Social Security, 2020.
- Industrial Relations Code, 2020.
- Occupational Safety, Health, and Working Conditions Code, 2020.
3.4 Employment Growth in Factories
- Factory employment increased by 7% in FY23, with 22 lakh new jobs added.
- Large factories (100+ workers) now constitute 22% of total operational factories.
4. Emerging Job Sectors and Future Opportunities
4.1 Digital and Green Jobs
- India’s digital economy to generate 60 million new jobs by 2025.
- Renewable energy sector to create 1 million green jobs by 2030.
4.2 Manufacturing and MSMEs
- Production-Linked Incentive (PLI) scheme: Expected to generate 60 lakh jobs.
- MSMEs contribute 30% of GDP and employ over 11 crore people.
4.3 Gig Economy and Flexible Work
- Gig workers projected to reach 23.5 million by 2030.
- Platforms like Uber, Zomato, and Ola are major employers in this sector.
Conclusion: The Path Forward for India’s Workforce
India’s employment and skill development strategy must focus on:
- Boosting formal sector jobs through regulatory simplifications.
- Enhancing skill training to match industry needs.
- Promoting entrepreneurship, especially among women and youth.
- Expanding employment in emerging sectors like digital services, AI, and renewable energy.
- Strengthening social security for informal and gig workers.
By leveraging technological advancements, policy reforms, and targeted interventions, India can maximize its demographic dividend and achieve inclusive, sustainable employment growth.