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Introduction

India’s demographic dividend (over 65% population under 35) offers transformative potential. Yet, without a coherent employment strategy, rising youth unemployment and informalisation threaten to convert this advantage into a demographic burden, undermining inclusive growth, social stability, and long-term economic resilience.

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Major Challenges Hindering Job Creation in India

• Skill Mismatch: Education and training often fail to match industry needs, leaving youth unemployable despite formal qualifications.
  Eg: NITI Aayog’s 2022 report highlighted that 47% of engineering graduates are unemployable in IT and manufacturing sectors.
• Informal Sector Dominance: A majority of workers lack formal contracts, social security, or stable income, limiting productivity and protection.
  Eg: NSSO data shows over 90% of workforce remains informal.
• Low Female Participation: Cultural barriers, safety concerns, and lack of support systems restrict women’s entry into the workforce.
  Eg: India’s female labour force participation only around 32% in 2022-23. 
• Stagnant Manufacturing: Manufacturing fails to absorb labour due to automation, low investment, and weak MSME linkages. 
• Regional Disparities: Employment opportunities are concentrated in urban and industrialized states.
  Eg: States like Bihar and Uttar Pradesh face higher youth unemployment (~17–18%) compared to Maharashtra (~7%).
• Gig Economy Volatility: Platform-based jobs lack job security, benefits, and long-term career progression, especially for youth. 

Measures for Inclusive & Sustainable Employment (Integrated National Employment Policy)

• Skill Alignment: Integrate vocational training with formal education through industry-led curriculum and certification.
  Eg: Skill India Mission launched Skill Hubs for school-to-work transition.
• Labour Market Reforms: Simplify compliance and extend social security to informal and gig workers.
  Eg: Code on Social Security 2020 aims to universalise coverage. 
• Women-Centric Policies: Ensure safe transport, flexible work hours, and childcare support to boost female workforce participation.
  Eg: Mahila Shakti Kendras support rural women’s employment and empowerment. 
• Green Jobs Promotion: Invest in renewable energy and climate-resilient infrastructure to generate sustainable employment.
  Eg: MNRE’s rooftop solar scheme created thousands of green jobs. 
• Decentralised Industrial Growth: Develop rural enterprise clusters and agro-based industries to reduce regional disparities. 
• Digital Labour Platforms: Use technology to match job seekers with verified employers across geographies and sectors.
  Eg: National Career Service portal connects over 1 crore job seekers.

Conclusion

India’s demographic dividend must be matched with a robust employment strategy. An integrated national employment policy can ensure inclusive, skill-aligned, and regionally balanced job creation transforming demographic potential into a resilient, equitable, and future-ready workforce.

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