India Employment Prospects and Job Pathways

Background of the NCAER Report

India Employment Prospects and Job Pathways: The National Council of Applied Economic Research (NCAER) released the report India’s Employment Prospects: Pathways to Jobs in December 2025.
The report provides a detailed assessment of India’s labour market structure and future employment pathways.

It highlights that job creation in India is closely linked to skilling systems and the performance of small enterprises.
However, the quality and sustainability of employment remain major concerns.

Static GK fact: NCAER was established in 1956 and is one of India’s oldest independent economic policy think tanks.

Structure of Employment Growth in India

The report observes that recent increases in employment are driven mainly by self-employment.
This rise is largely due to economic necessity rather than innovation-led entrepreneurship.

Most small enterprises operate at a subsistence level, marked by low capital investment and weak productivity.
Limited adoption of technology further constrains their growth potential.

Static GK Tip: In India, self-employment includes own-account workers, unpaid family labour, and small proprietors.

Skill Composition of the Workforce

Employment growth has been strongest in medium-skilled jobs, particularly in the services sector.
Sectors like retail, logistics, and personal services account for a large share of new jobs.

In contrast, manufacturing employment remains largely low-skill intensive.
This limits wage growth and reduces the sector’s ability to absorb a growing labour force.

The slow transition towards a skilled workforce remains a key structural weakness in India’s employment landscape.

Challenges in Vocational Education and Training

India’s Vocational Education and Training (VET) system faces multiple structural bottlenecks.
These include under-utilised training seats, weak placement outcomes, and large numbers of vacant instructor positions.

Industry linkages remain poor, resulting in skill mismatches.
Vocational education continues to be perceived as a fall-back option rather than a mainstream career pathway.

Static GK fact: India’s VET system is overseen by institutions such as the Directorate General of Training under the Ministry of Skill Development and Entrepreneurship.

Demand-Side Employment Reforms

On the demand side, the report stresses boosting domestic consumption to stimulate job creation.
Reorienting the Production Linked Incentive (PLI) scheme towards labour-intensive sectors is critical.

Sectors like textiles, footwear, and leather have higher employment multipliers.
Improved access to institutional credit can significantly raise hiring capacity.

The report notes that a 1% increase in credit access can raise the expected number of hired workers by 45%.

Supply-Side Skilling Reforms

On the supply side, the report recommends integrating vocational training into early schooling.
Curricula must be aligned with evolving industry needs.

Strengthening public–private partnerships is essential for improving training quality and placements.
Public investment in skilling must rise to match global benchmarks.

Increasing the skilled workforce share by 12 percentage points could raise employment in labour-intensive sectors by over 13% by 2030.

Conclusion

The report concludes that India’s employment challenge is not merely about job numbers.
It is fundamentally about quality, productivity, and skill alignment.

Sustained reforms on both demand and supply sides are crucial for creating meaningful and durable employment.

Static Usthadian Current Affairs Table

India Employment Prospects and Job Pathways: