Subject: Economy

India's demographic dividend, often celebrated as a potential economic catalyst, faces a critical challenge in the form of declining employability rates amidst the Fourth Industrial Revolution, raising concerns about the future of India's workforce and economic growth trajectory.

Current Challenges in Employability

• Skills Mismatch: According to recent data, only 45% of job-seeking graduates are deemed employable in FY2023-24, highlighting a significant gap between education and industry requirements.

• Technology Gap: A severe shortage exists in emerging technologies like Artificial Intelligence, Machine Learning, and Cybersecurity, with NASSCOM projecting a 2 million skilled professional shortage by 2025.

• Informal Sector Concerns: The informal sector, employing 90% of the workforce and contributing 50% of GDP, added only 11.7 million workers between October 2022-September 2023, indicating sluggish growth.

Potential Sources of Employment Generation

• Infrastructure Development:

  • The sector accounts for 60% of total project costs in 2022-23.
  • States like Uttar Pradesh (16.2%) and Gujarat (14%) are leading infrastructure investments.
  • Bharatmala initiative is creating substantial employment in road and bridge projects.

• Skill Development Initiatives:

  • Government's allocation of ₹8,800 crore for Skill India Programme (2022-26).
  • Implementation of schemes like PMKVY 4.0 and PM-NAPS focusing on industry-relevant training.
  • Jan Shikshan Sansthan program targeting youth and marginalized groups.

Way Forward

• Industry-Academia Collaboration: Strengthening partnerships between educational institutions and industries to align curriculum with market needs.

• Focus on New Age Skills: Emphasis on digital literacy, soft skills, and entrepreneurship training.

• Formalization of Economy: Supporting the transition of informal sector workers through targeted policies and social security measures.

The challenge of India's employability crisis requires a multi-pronged approach focusing on skill development, infrastructure creation, and industrial growth. Success stories like Singapore's SkillsFuture initiative and Germany's Dual Education System can serve as models for creating a robust skill ecosystem in India.