By 2030, one in every five working-age individuals globally will be Indian. India needs to create 115 million jobs by 2030 to absorb both underutilised working and incoming labour force, Trinh Nguyen, a senior economist at Natixis SA whose were quoted recently.
India’s youthful demographics present a unique policy challenge in ensuring a robust and sustainable job market. This demographic dividend highlights the urgency for foundational educational and skilling initiatives, which must not only be comprehensive but also offer skill sets that align with evolving talent or labour market demands.
However, perhaps the biggest challenge lies in the unpredictability of both future jobs and the job market landscape. Rapid technological advancements, coupled with shifting global economic paradigms, make it increasingly difficult to anticipate the skills and competencies that will be in demand. The advent of emerging technologies, particularly AI, further complicates this scenario, as job displacements could occur at an accelerated pace. As such, reskilling becomes paramount, especially for those in the productive labour age group.
While the services sector has been a significant contributor to India’s GDP, there is a pressing need to enhance its value addition. For instance, although India is a major provider of IT and ITES services globally, there remains untapped potential in high-margin, cutting-edge tech consulting services.
Bridging the gap
Emphasising manufacturing as a key driver of job creation would align with India’s political aspirations, demographic needs, and geopolitical realities. There are no right answers, but only much of questions in this tightrope that a government would walk.
As India aims to bolster its global manufacturing footprint, there is a realisation that bridging the gap between aspiration and reality requires a nuanced approach. It necessitates a concerted effort to align educational curricula with industry needs and forge stronger connections between academia and the manufacturing sector. This entails embracing a mindset of humility and introspection to identify and address existing gaps in infrastructure, skill development, and technological capabilities.
One significant challenge lies in effectively employing the current cohort of educated young Indians while simultaneously strategising for their future market readiness. Despite their educational qualifications, many young Indians face hurdles in securing meaningful employment opportunities that match their skills and aspirations.
In India, we treat degrees like warranties, expecting them to guarantee lifelong prosperity. Unfortunately, life and 21st-century livelihood don’t come with an extended warranty.
In today’s rapidly evolving world, where technological advancements and economic shifts occur at an unprecedented pace, the skills and knowledge acquired through formal education quickly become outdated. Therefore, individuals must cultivate a proactive attitude towards continuous learning and skill development to remain relevant and competitive in the job market throughout their lives.
NEP and women empowerment
Looking ahead, there is a pressing need to rethink and revamp the education system to equip students with the relevant skills and competencies demanded by the job market a decade or more into the future. The full implementation of the National Education Policy (NEP) across India requires cohesive co-ordination between the Union and state governments.
While the NEP embodies a commendable intent to create a globally relevant education and skilling system, its effectiveness hinges on widespread acceptance and consistent execution across all states, including those with double-engine governments. This necessitates robust Union-state co-ordination mechanisms to ensure uniformity in policy implementation and adherence to the NEP’s core principles and objectives.
Increasing formal employment opportunities for women is not just an economic need but also a crucial step towards societal progress and gender equality. Despite marginal improvements in recent years, India still lags its Asian counterparts in terms of female labour force participation rates.
Empowering women isn’t just about giving them a seat at the table; it’s about recognising that they’ve been architects of society all along and finally handing them the blueprint.
Learn from China
Vietnam’s (75 per cent) and China’s (71 per cent) significantly higher rates underscore the untapped potential of female workforce participation in driving economic growth and development. Nguyen’s report highlights the ambitious target of raising India’s female labour force participation rate (LFPR) to 50 per cent by 2030, from the current 25 per cent necessitating the creation of 16.5 million jobs annually. This is an urgent need for targeted policies and grassroots programmes aimed at breaking down cultural and social barriers that hinder women’s entry into the formal workforce. Learning from China’s experience, where women’s participation in formal economic activities, especially across SME and MSME, played a pivotal role in driving economic growth since the early 1980s, with SME-MSME contributing nearly 80 per cent of the total economy.
MSME constitute a significant portion of the industrial landscape, and have the potential to catalyse economic development by creating job opportunities in diverse sectors. Furthermore, the expansion of labour-intensive manufacturing by MSMEs has a multiplier effect on the economy, fostering entrepreneurship, stimulating local economies, and enhancing overall productivity.
MSMEs are the heartbeat of India’s economy, employing over 110 million individuals. It’s time we treat their growth not as an option but as a national mission. By empowering MSMEs with tangible support and decisive action, we can unleash their potential as economic catalysts and fast-track India’s journey towards prosperity, without the burden of incrementalism and jargon.
(Srinath Sridharan is a policy researcher and corporate adviser. X: @ssmumbai.)
Disclaimer: The views expressed above are the author’s own. They do not necessarily reflect the views of DH.