By R Gopalan & MC Singhi, the authors are former civil servants
Demographic dividend will be realised only when the young population is gainfully employed. India does not have a specific employment policy. However, there have been interventions in agriculture, industry, and the civic services sector to reduce unemployment and underemployment. Apart from offering jobs to eligible people, the provision of quality jobs is equally important. Around 30% of India’s youth who are in the 15-29 years’ age bracket are neither employed nor undergoing training and/or education.
Another reality is that subsistence sectors such as agriculture, trade, transport, and household activities dominate sources of employment. The skill development initiative has not been able to absorb the trained people because of limited employability. Strangely, the more educated you are, the higher is the probability of your being unemployed.
Labour issues are studied based on the sectors employed, labour regulations, or the nature of employment—whether self-employed or hired. But there has hardly been any study based on occupation group and employment.
The period between 2011-12 and 2017-18 was one of jobless growth. The employment numbers actually declined at an average annual rate of 0.63% despite a very low growth of job seekers. The rate of unemployment increased from 2.4% in 2011-12 to close to 6% in 2017-18. There was a decline in job seekers and the worker-to-population ratio. In 2025, there was a sharp increase in job seekers and worker-to-population ratio and a moderation in the unemployment rate.
Incremental workers exceeded incremental job seekers, suggesting that all new entrants received jobs. Another positive factor since 2017-18 is the larger participation of population in the labour force. Though India is nowhere near the East Asian countries where two-thirds of the population seeks jobs, we are still progressing to a level under 50%. Further, the increase in the number of workers exceeding job seekers during 2017-18 to 2025 conceals the job quality and occupation patterns.
The table reveals the following.
Firstly, there is a sharp decline in top-level employees (managers and senior officials) to nearly 50% in the last seven years. These are highly paid workers. A sharp decline in their numbers indicate decline in top-level positions held by locals or a greater flattening of the organisational pyramid in the organised sector. But there is a compensatory growth in the engagement of professionals. There has been a sharp decline in the number of mid-level professionals and technicians.
These three occupations, held by educated workers and professionals, together employ just 66 million in 2025—the same as 2011-12—indicating churning and/or an increasing size of organisations. This also indicates that the current levels of skill sets are becoming less relevant and they need restructuring to reflect current and future requirements.
Skill sets to face competition from AI need to be introduced. These are the jobs that are critical in both manufacturing and market-driven services, and achieve relatively greater value addition per person. From the viewpoint of accelerated growth and better equity and stability, a focus on this problem is critical.
Secondly, elementary works and agriculture and allied sectors (including subsistence agriculture) dominate the work environment. These two occupations account for 56% of the total workforce. Post-2017-18, the number of persons engaged in these two primary occupations recorded a growth of 5.1%. Demonetisation, GST reforms, and the pandemic reversed the trend of a declining workforce in these elementary occupations. However, the per worker value addition in the two occupations is one of the lowest. Long-term acceleration in growth would necessarily need a shift away from these low-paying occupations.
Third, service and sales workers and workers relating to crafts are the second-most dominant occupation group, accounting for a quarter of workers. These workers have elementary skills and are barely able to survive. Most of them are self-employed, but gross income per person—either as owner entrepreneur or a hired worker—is close to the minimum wage. Skill development and collateral-free credit to them is essential.
The employment scenario needs proactive intervention. Skill development is necessary in crafts and related sectors, allied agriculture, and some elementary sectors with enhanced productivity and incentives to create enabling organisations to market the produce. Innovative methods to make organised sector finance accessible to them is important. Improved design and standardisation of the produce marketed will help immensely as urbanisation increases. Industrial training institutes are yet to be fully run by the private sector. This needs attention, as does the vocational stream. A redeeming feature is efforts to reduce regulation.