India stands at a crucial juncture where its demographic advantage could either fuel economic growth or lead to a crisis of unemployment and underemployment. The Economic Survey 2024-25 warns, “Without swift action, we risk squandering our demographic dividend and falling short of our aspirations for a globally competitive economy.”
The Survey called for aligning education with skill-based learning and creating a robust system of lifelong learning, highlighting gaps in education and skill development, and emphasising the need for urgent reforms to equip the workforce with industry-relevant skills.
Despite increase in enrolment – higher education student numbers rising from 3.42 crore in 2014-15 to 4.33 crore in 2021-22 – dropout rates at secondary and higher secondary levels remain high. This is a major barrier in achieving the NEP-2020 target of 100% Gross Enrolment Ratio by 2030. The survey showed 90.2% of India’s workforce has only secondary-level education or lower, with 88.2% engaged in low-competency jobs. “The employability crisis is deep-rooted, stemming from a disconnect between formal education and industry expectations,” it stated. While initiatives like FutureSkills Prime have trained 1.27 lakh people in AI, robotics and automation, a large portion of the workforce remains unprepared for the evolving job market. Also, higher education institutions must evolve to meet the rising demand for specialized skills in emerging sectors like fintech, healthcare technology, and renewable energy. The survey recommended industry participation. “Incentivizing companies to offer hands-on training, mentorship will ensure a steady supply of job-ready graduates,” an expert said.