Author: Saurabh Sanyal
India is at a crossroads in its economic journey. Its young and dynamic workforce is considered an asset of the Indian economy and offers an extraordinary opportunity to enhance economic growth, innovation and global competitiveness. As the country moves ahead towards the vision of Viksit Bharat 2047, empowering its youth with relevant skills, avenues for meaningful employment and pathways for professional growth will be at the heart of building a developed, inclusive and resilient economy.
The Government of India has taken a number of initiatives to strengthen the linkages between education, skill development and employment, recognising the potential of its demographic dividend. The emphasis is shifting to training young Indians not just for today’s jobs but also for the new opportunities that will shape the economy of tomorrow.
Exploiting India’s demographic dividend
India’s young population is a potent engine of productivity, innovation and enterprise. The demographic dividend is an economic opportunity, but it must be translated into sustainable economic growth through a coordinated strategy that includes economic growth, skills development and job creation.
The Government’s vision of Viksit Bharat 2047 provides a larger canvas for this transformation, with emphasis on manufacturing, infrastructure, entrepreneurship, digitalisation and the expansion of emerging sectors. NITI Aayog said these areas open avenues to create jobs, boost domestic capabilities and make India a competitive place for investment and business.
In this context, the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), which was launched on August 1, 2025, is a significant step. The scheme, with an outlay of `99,446 crore, is aimed at incentivising the creation of over 3.5 crore jobs over two years, including for first-time workforce entrants. The initiative stresses the importance of encouraging employers to grow their teams and supporting young people as they embark on their professional careers.
India’s demographic dividend can be realised only when employment generation is coupled with opportunities for skill utilisation, productivity enhancement and career progression.
Education and employability: Building a future-ready workforce
India’s education system is evolving to meet the changing needs of the economy. The National Education Policy (NEP) 2020 is also a significant step towards making education more skill-oriented, as it promotes experiential learning.
Moreover, the policy suggests that educational institutions should move away from conventional classroom-based teaching and include practical exposure, problem-solving, project-based learning and workplace exposure in their programmes.
There are further opportunities to connect education and industry needs through government initiatives that support the integration of vocational and academic learning, such as apprenticeship-based programmes and the National Credit Framework. Such measures can help students acquire practical skills and formal qualifications and create more flexible pathways between education, training and employment. The next step in progress will be the extent to which these reforms can be translated into better employability outcomes.
Skill India: Connecting the dots between training and employment
The Skill India Mission launched by the Government has created a crucial platform to increase access to skill development, re-skilling and up-skilling. The Government supports different sections of the population in acquiring industry-relevant skills through various schemes, such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Apprenticeship Promotion Scheme (NAPS) and Industrial Training Institutes (ITIs)-based training.
In the era of automation and AI, there should be efforts to improve the connection between training and the demand for jobs. Training should focus on creating opportunities in the labour market through industry-led skill development.
Artificial Intelligence and automation: Creating new job opportunities
The World Economic Forum, in its Future of Jobs Report 2025, pointed out the increased demand for up-skilling and reskilling among the youth. The India coverage report states that nearly 63 per cent of workers in India will require intensive skill training by 2030.
The Forum also says that AI can create opportunities in various fields like cybersecurity, healthcare, software, technology, advanced manufacturing, and the AI-enabled service industry. The biggest risk is not the loss of human jobs, but the challenge of humans adopting change. Therefore, it is crucial for India to prepare its youth not only for current jobs but also for the rapid technological changes that will occur in the future. In this regard, the IndiaAI Mission was approved in 2024 to take significant steps toward developing the domestic AI ecosystem. The mission has an outlay of around Rs 10,372 crore over five years.
These efforts create opportunities to prepare young Indians for technology-intensive jobs, while fostering innovation across sectors.
Economic Growth and Employment: A Common National Interest
India’s economic transformation offers opportunities in manufacturing, infrastructure, construction, financial services, healthcare, tourism, logistics, renewable energy and the digital economy. By increasing investment and improving competitiveness in these sectors, the demand for skilled workers can be expanded and opportunities for entrepreneurship and enterprise development can be created.
The growth is backed by the Government’s efforts to boost infrastructure, promote domestic manufacturing, support startups and strengthen the business ecosystem so as to provide an enabling environment. The challenge - and opportunity - is to ensure that economic growth becomes job growth at all skill levels, for all regions and demographic groups.
The services sector also holds considerable promise for employment and export generation. As global businesses look for skilled talent and specialised services, India can further strengthen its position by investing in workforce capabilities, quality standards and innovation.
At the same time, MSMEs, emerging enterprises can be supported to adopt digital technologies, access new markets and improve productivity. More women involvement, more support for entrepreneurs starting out and better access to training in smaller cities and rural areas can further widen the benefits of economic development.
An integrated employment strategy should be well-coordinated and draw together industrial policy, education reform, skill development, entrepreneurship and technological advancement.
The Role of Collaboration between Industry, Academia and Government
Employment generation and skill development would be based on government policies and programs. To make them more effective, industry and educational institutions can actively participate.
Industry can help identify emerging skill needs, assist in curriculum development, provide apprenticeships and internships and help faculty gain exposure to business today. Educational institutions should focus on developing flexible models of learning.
The goal is to create a responsive and collaborative ecosystem in which education and training remain closely linked to economic opportunity.
Toward Viksit Bharat 2047: From Promise to Performance
India’s demographic dividend forms a strong base for its aspirations to become a developed economy by the year 2047. Government initiatives in education, skilling, employment incentives, entrepreneurship and emerging technologies are important building block in this journey.
The next phase will be determined by how well these efforts are turned into opportunities for young people to learn, innovate, work and build sustainable careers. This will require sustained investment for enterprises to grow.
India’s demographic dividend is not merely a numbers game but an opportunity to create a more skilled, productive and innovative nation. Continued collaboration between policymakers, industry, academia and the workforce will allow India to move forward the Government’s vision and lay stronger foundations for quality employment, enterprise development and sustained economic prosperity.
The key to making the vision of Viksit Bharat 2047 a shared national achievement will be to empower young India with the necessary skills, meaningful opportunities and the confidence to lead innovation.
Manufacturing is improving
Manufacturing is showing signs of revival as its share of total employment rose from 11.6 per cent in 2024 to 12.1 per cent in 2025. Organised manufacturing also recorded strong job growth in FY 2024–25. However, sustaining this momentum will require greater investment in labour-intensive industries such as textiles, footwear, food processing and electronics, which can generate large-scale employment for young workers.
IT hiring is becoming more selective
India’s IT sector is moving away from a recruitment model driven by large numbers of entry-level employees towards one that prioritises specialised skills. While demand for AI, cybersecurity, cloud computing and data analytics is increasing, traditional coding and support roles face pressure from automation and cost-cutting. The challenge is to equip young graduates with industry-relevant skills and help existing workers adapt.
Government jobs remain competitive
Government employment continues to attract millions of aspirants because of job security, regular salaries and retirement benefits. Although public-sector hiring remains important, government vacancies alone cannot absorb India’s expanding workforce. Greater private investment, vocational training and entrepreneurship are essential to create alternative avenues for secure employment.
Agriculture has the largest workforce
Agriculture accounted for 43 per cent of India’s employment in 2025, underlining the sector’s continuing importance as a source of rural livelihoods. However, its large employment share also reflects the limited capacity of industry and services to absorb surplus agricultural labour into better-paid jobs. Expanding food processing, dairy, fisheries, logistics and rural enterprises is essential to create more sustainable employment.
Saurabh Sanyal is the Secretary General ASSOCHAM; Views presented are personal.