Core Insight:
India’s demographic dividend risks turning into a disaster as lakhs of graduates enter the job market without being job-ready, amidst rising automation and a shrinking formal job base.
Relevance : GS-3 (Indian Economy) – Issues related to employment, skill development, and job market reforms.
Alarming Statistics
| Indicator | Data |
| Youth Share in Unemployment | 83% of unemployed are youth – India Employment Report 2024 (ILO + IHD) |
| Formal Workforce (EPFO) | >7 crore members; 18–25 age group = 18–22% of new additions |
| Informal Workforce | 90% of total employment remains informal |
| Digital Illiteracy Among Youth | – 75% can’t send email with attachment – 60% can’t copy-paste files – 90% lack basic spreadsheet skills |
| Job Displacement vs. Creation (2030) | – 170M new jobs to be created (14%) – 92M jobs displaced (8%) ➡ Net gain = 78M jobs (7%) – Future of Jobs Report 2025, WEF |
Core Challenges
- Unemployability > Unemployment
- Only 50% of Indian graduates are job-ready – Economic Survey 2023–24
- Skill mismatch in digital, professional, and interpersonal domains
- AI and Automation Threat
- AI adoption is putting low-to-mid-level IT roles at risk
- Traditional service jobs in India may not survive next-gen tech transitions
- Job Quality Crisis
- Surge in contractual and gig employment without security or benefits
- Lack of long-term wage growth and poor financial security
- Skill Infrastructure Deficit
- Higher education and vocational institutes not aligned with job market needs
- Few formal linkages between academia and industry
Strategic Policy Recommendations
| Pillar | Action Needed |
| Education-Industry Link | – Mandatory partnerships for colleges with industry – Accountability for placements, not just degrees |
| Skill-First Curriculum | – Universal presence of Idea Labs & Tinker Labs – Compulsory digital + soft skill + foreign language training at all levels |
| Global Skilling Strategy | – Design courses aligned with ageing workforce needs in EU, Japan, etc. – Align with initiatives like EU’s Link4Skills, tapping migration corridors |
| Institutional Reform | – Create Indian Education Services (IES), equivalent to IAS, to attract top talent into education leadership |
| Open Education Ecosystem | – Invite industry professionals to teach/mentor in institutions to bridge theory-practice divide |
EPFO Data: Formalisation vs. Stability
- Rise in 18–25 age group enrolments in EPFO indicates push for formal employment.
- But unclear if these jobs are:
- Secure
- Well-paying
- Long-term
Job creation ≠ job quality. The data must be paired with studies on job retention and income growth.
The Cost of Inaction
- Wasted potential: India produces millions of graduates annually, many unemployable.
- Rising frustration: Educated youth without jobs fuels social unrest, migration, and mental health issues.
- Lost opportunity: Without global skill alignment, India risks missing out on exporting talent to ageing nations.
- Vicious cycle: Lack of jobs ➝ underemployment ➝ informal work ➝ no savings ➝ no upward mobility
Conclusion
India’s employment problem is not just about creating more jobs — it’s about creating relevant, high-quality, future-proof employment.
