Source: The post Job creation in India has been created, based on the article “Job creation poses big policy challenge” published in “Business Line” on 4 September 2025. Job creation in India.
UPSC Syllabus Topic: GS Paper- 3- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Context: Employment in India has long been a structural challenge. While growth was once assumed to generate jobs automatically, recent experience shows persistent unemployment and underemployment. PLFS data (2017–18 to 2023–24) indicate improvements in labour force participation, but structural issues remain.
Challenges
- Concentration in low-skilled jobs: Employment in agriculture rose to 280 million in 2023–24, with over 70% of workers in low-productivity sectors. The mismatch between imparted and demanded skills must be addressed by promoting high-value manufacturing and rural industrialisation.
- Exam-dependence and rent-seeking: Nearly one-third of youth are NEET, with half preparing for government jobs. This results in wasted potential. Measures include limiting exam attempts, incentivising entrepreneurship, and ensuring faster MSME resolution.
- Gender gap in participation: Female LFPR is only 30%, far below the 50% needed. Ensuring workplace safety, targeted credit, and social support systems like childcare can help.
- Stagnant income of self-employed: Incomes grew marginally (male: 3.6%, female: –1.3%). Collateral-free loans, reduced compliance, and market linkages are essential.
- Labour law rigidity: Only 24 million non-agricultural workers enjoy full welfare compliance. Reforms should extend social security to gig and informal workers and incentivise States to implement labour codes.
Way Forward
- Promote labour-intensive manufacturing and green jobs.
- Invest in vocational and digital skills aligned with industry needs.
- Expand MSME access to credit and technology.
- Ensure female participation through childcare, flexible work, and safety.
- Implement universal social security for informal and gig workers.
Question: Job creation poses a big policy challenge in India. Discuss the issues involved and suggest measures.
