Context:

India is home to one of the world’s youngest populations, with lakhs of students graduating annually from universities, colleges, Industrial Training Institutes (ITIs), and other skill development programmes. Despite this demographic advantage, the country faces a deepening employment crisis. Many educated youth remain jobless or stuck in informal and low-quality work due to skill mismatches, lack of training, and weak industry linkages.

This is not only a question of unemployment but of unemployability—a structural issue that demands urgent reforms in education, skill development, and workforce planning.

Formal Employment Trends:

The Employees’ Provident Fund Organisation (EPFO), which manages retirement savings for organised sector workers, serves as a key indicator of formal job creation. It has over 7 crore members, making it one of the world’s largest social security agencies.

• EPFO data post-2019 showed a decline in net new enrolments due to the pandemic.
• However, March 2025 data indicates a steady recovery in formal workforce participation.
• Youth between 18–25 years form a significant share of new EPFO subscribers.
• Within this, the 18–21 age group alone accounts for 18% to 22% of new enrolments in recent months.

While this suggests a move toward formalisation, the quality and sustainability of these jobs—wages, benefits, and long-term security—require deeper analysis.

Youth Unemployment: Scale of the Problem

According to the India Employment Report 2024, youth form 83% of India’s unemployed population. Alarmingly, the share of unemployed individuals with secondary or higher education has almost doubled over the past two decades.

The Economic Survey 2023–24 adds another layer of concern: only half of India’s youth are job-ready upon graduation. One in two lacks the digital and professional skills demanded in the workplace, particularly in a rapidly evolving, tech-driven economy.

Digital Skill Gaps

Many young Indians lack even basic digital competencies:

• 75% struggle to send an email with an attachment.
• Over 60% cannot perform basic file operations like copy-pasting.
• Nearly 90% lack basic spreadsheet skills, such as using formulas.

This digital illiteracy is particularly problematic as automation, AI, and digital tools become central to most industries. Without core digital literacy, a large segment of India’s youth remains unprepared for both domestic and global job markets.

The Changing Job Landscape:

The Future of Jobs Report 2025 by the World Economic Forum presents both opportunities and disruptions:

• By 2030, about 170 million new jobs are expected to be created (14% of global employment).
• Simultaneously, 92 million existing jobs (8%) are projected to be displaced.
• The net gain would be 78 million jobs, or a 7% overall growth.

This signals the urgent need for reskilling, upskilling, and workforce alignment with emerging roles. Countries that adapt their education and training systems accordingly will be better positioned to benefit from this transition.

Persistent Informality and Job Insecurity:

Despite these changes, informal employment still dominates India’s labour market:

• Nearly 90% of employment is informal.
• The share of salaried and regular jobs has declined since 2018.
• Though contractual jobs have increased, they often lack job security and social protection.

This indicates a disconnect between economic growth and high-quality job creation, especially for the youth.

Key Government Initiatives:

To address these challenges, several skill development and employment generation schemes have been launched:

Skill Development & Training

• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Offers short-term training aligned with industry needs.
• National Apprenticeship Promotion Scheme (NAPS): Encourages employers to engage apprentices through incentives.
• Jan Shikshan Sansthan (JSS): Provides non-formal skill training for disadvantaged groups.
• Craftsman Training Scheme (CTS): Operates via ITIs to build technical skills in various trades.

Employment Generation

• MGNREGS: Offers 100 days of wage employment to rural households.
• PM 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, expected to generate 60 lakh jobs over 5 years.

Budget 2024–25 Highlights:

• A ₹2 lakh crore package to support 4.1 crore youth over 5 years.
• An internship scheme for 1 crore youth, offering a ₹5,000 monthly allowance.
• Skilling of 20 lakh youth and upgradation of 1,000 ITIs to enhance technical capacity.

While these initiatives are promising, the real challenge lies in ensuring implementation quality, industry alignment, and monitoring outcomes.

Structural Reforms: What India Must Do

To bridge the gap between education and employment, deeper reforms are necessary:

1. Industry-Academia Integration

• Mandate formal partnerships between academic institutions and industries.
• Facilitate joint curriculum design, faculty training, and internships.

2. Outcome-Based Accountability

• Track employment outcomes—not just pass percentages or degree completion.
• Link accreditation systems to placement records and real-world job performance.

3. Make Innovation a Norm

• Mandate Idea Labs and Tinker Labs in every school and college to promote problem-solving.
• Integrate soft skills, foreign languages, and interdisciplinary learning at all levels.

4. Think Beyond Borders

• Design training modules to meet global skill demands, especially for ageing societies in Europe and Japan.
• Expand international cooperation through programmes like Link4Skills, which map overseas labour shortages.

5. Professionalise Education

• Establish an Indian Education Services, on par with the civil services, to bring top talent into education leadership.

6. Open Classrooms to Industry Experts

• Create pathways for professionals to teach in educational institutions—bridging the theory-application gap.

Conclusion:

India is at a critical turning point. On one side lies the potential demographic dividend, and on the other, a deepening skills and employment crisis. The problem is not just a shortage of jobs—it’s the mismatch between what the education system produces and what the labour market requires.

While government schemes like PMKVY, NAPS, and the PLI scheme offer valuable support, their effectiveness depends on how well they are integrated with ground realities. Likewise, budget allocations for internships, ITI upgrades, and skill development must translate into measurable outcomes—not just announcements.

With bold reforms, global outlook, and investment in real-world skills, India can equip its youth to lead in the job markets of tomorrow. But without urgent structural shifts, the growing gap between qualifications and employability will remain a drag on national progress.