The report underlines the role of skilling and small enterprises as key drivers of job creation in the country.
Key Trends in Employment
- Increase in employment is primarily due to the rise in self-employment, while transition to a skilled labour force has been slow.
- India’s self-employment dominance is due to economic necessity rather than entrepreneurial dynamism and most of the small enterprises function at subsistence level with low capital, productivity and technology adoption.
- Medium-skilled jobs dominate employment growth, especially in services, whereas manufacturing remains low-skill intensive.
- India’s Vocational Education and Training (VET) system continues to face deep structural challenges, including under-utilised seats, poor placement rates, vacant instructor posts, weak industry linkages, and a persistent perception of vocational education as a fall-back option.
Recommendations for Generating Meaningful Employment
- Demand Side: Reforms should aim to boost domestic consumption, redirect Production Linked Incentives (PLI) toward labour-intensive sectors (like textiles, footwear etc.), improve access to credit and, simplify labour regulations.
- Even 1% increase in access to credit increases expected number of hired workers by 45%.
- Supply Side: Integrating VET into early schooling, aligning curricula with industry demands, strengthening public-private partnerships, and, increasing public investment to match global standards.
- Increasing the share of skilled work force by 12 percentage points through investment in formal skilling could lead to more than a 13% increase in employment in the labour-intensive sectors by 2030.