By Jaimine Vaishnav

India’s burgeoning youth population, estimated at 365 million in 2021 (around 27% of the total population), presents both an opportunity and a challenge for the nation’s economic future. With approximately 12 million young people entering the workforce each year, the need for effective up skilling initiatives has never been more critical. 

This article examines the current state of youth employment in India, focusing on the role of skill development in addressing unemployment, particularly among marginalised groups and in rural areas.

The Employment Landscape

Recent data paints a complex picture of youth employment in India. The Centre for Monitoring Indian Economy reports that 23.22% of young job seekers were unemployed in 2023, a slight improvement from the pandemic peak of 28.26% in 2021, but still alarmingly high.

The Periodic Labour Force Survey (PLFS) for 2021-22 reveals stark disparities:

  • Urban youth unemployment rate: 23.7%
  • Rural youth unemployment rate: 17.4%
  • Female youth unemployment rate: 35.8%
  • Male youth unemployment rate: 17.8%
  • The unemployment rate among Scheduled Tribes (ST) youth was 5.9% in 2019-20, compared to 4.8% for the general population (Ministry of Statistics and Programme Implementation).

These figures underscore the urgent need for targeted skill development programs that address the unique challenges faced by different segments of India’s youth population. 

Indian Economy, Unemployment in India, national skill development, skill development course

Government-led Skill Development Initiatives

Recognising the importance of up skilling, the Indian government has launched several ambitious programs:

  1. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY), now in its fourth phase, aims to train over 1.5 million youth in industry-relevant skills by 2026, with a budget allocation of ₹6,000 crore.
  2. The Skill India Mission set an ambitious target of training 400 million people by 2022, though this timeline has been extended due to the pandemic. As of 2021, it had trained over 50 million individuals in the areas of retail, IT, banking, healthcare, telecom, agriculture, etc.
  3. The National Apprenticeship Promotion Scheme has a target of engaging 1 million apprentices annually by 2026-27, with a budget outlay of ₹3,054 crore, in the sectors of logistics, retail, IT, telecom, agriculture, hospitality, etc.
  4. The Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) aims to skill 1.5 million rural poor youth by 2022-23, with a budget allocation of ₹1,500 crores.
  5. The YUVA Scheme, launched in 2021, aims to mentor 75 aspiring authors under the age of 30, with a total financial outlay of ₹5 crores.

Obstacles to Effective Up skilling

In recent years, India has embarked on numerous initiatives aimed at enhancing the skill sets of its workforce. These efforts are crucial for driving economic growth and ensuring that the labor market remains competitive in a globalized economy. 

However, despite these initiatives, several challenges continue to hinder the success of upskilling efforts in the country. 

Key issues include skill mismatches, limited reach, quality concerns, the digital divide, gender disparity, and awareness issues.

  • A significant challenge is the mismatch between the skills possessed by graduates and those required by industries. According to a 2019 study by Wheebox, only 46% of Indian graduates were considered employable by industry standards. This stark gap indicates that the current education and training systems are not adequately aligned with market needs. Consequently, many graduates struggle to find employment, and employers face difficulties in finding candidates with the right skills.
  • The reach of formal skill training programs in India is alarmingly limited. As of 2021, only 5.4% of the Indian workforce had undergone formal skill training. This is in sharp contrast to countries like South Korea and Japan, where the figures stand at 96% and 80%, respectively (MSDE Annual Report 2020-21). The limited reach of these programs highlights a significant shortfall in efforts to make skill training accessible to a broader segment of the population.
  • Quality assurance in skill training programs is another major issue. A 2020 study by the National Skills Development Corporation found that only 55% of trained candidates were able to secure placement. This statistic underscores the inefficacy of many training programs in imparting skills that are truly valued by employers. The low placement rate reflects not just the inadequacy of training but also a potential misalignment between training content and industry requirements.
  • The digital divide further exacerbates the challenges of upskilling. With only 24% of Indian households having access to the internet (NSSO 75th Round, 2017-18), the potential for online upskilling programs is severely limited. This divide is particularly problematic in rural areas, where internet penetration is even lower. The lack of digital infrastructure restricts the reach of modern, technology-driven training solutions that could otherwise offer flexible and scalable upskilling opportunities.
  • Gender disparity in skill training programs remains a significant barrier. Female participation in formal skill training programs was only 33% in 2019-20 (MSDE Annual Report 2019-20). This low participation rate highlights systemic issues that prevent women from accessing and benefiting from skill development initiatives. Addressing this disparity is crucial for achieving a more inclusive workforce and ensuring that women can equally contribute to and benefit from economic growth.
  • Awareness of government skill development programs is alarmingly low, especially in rural areas. A 2019 survey by the National Sample Survey Office found that only 1.8% of rural youth were aware of these programs. This lack of awareness significantly hampers the potential impact of skill development initiatives. Without adequate information, many individuals who could benefit from these programs remain unaware of their existence and thus miss out on valuable opportunities for upskilling.

Economic Perspectives and Potential Solutions

Several economic theories provide insights into addressing youth unemployment through upskilling:

  1. Human Capital Theory suggests that investing in education and training can boost individual productivity by 10-30% (OECD estimates).
  2. Signalling Theory highlights the importance of credible certifications, with certified individuals earning up to 20% more than their non-certified counterparts (LinkedIn Workplace Learning Report 2021).
  3. Endogenous Growth Theory emphasises the role of human capital, with a 1% increase in training leading to a 0.8% increase in productivity (World Bank study, 2019).

Building on these theories, potential solutions include:

  • Fostering closer collaboration between educational institutions and industries, aiming to increase industry involvement in curriculum design by 50% by 2025.
  • Conducting localised skill gap analyses in all 728 districts of India by 2024.
  • Leveraging technology to extend the reach of up skilling initiatives, targeting a 100% increase in online skill training participation by 2026.
  • Implementing mentorship programs to provide guidance and industry insights, aiming to connect 1 million youth with mentors by 2025.
  • Promoting youth entrepreneurship through targeted support and training, with a goal of creating 1 million young entrepreneurs by 2027.
  • Introducing a skill voucher system to empower youth in choosing their training paths, with an initial target of distributing 5 million vouchers by 2025.

Addressing Rural and Tribal Youth Needs

Up skilling initiatives for rural and tribal youth must be tailored to their unique circumstances:

  • Deploy 500 mobile training units to bring skill development opportunities to remote areas by 2024.
  • Invest ₹1,000 crore in programs focused on modernizing traditional crafts and skills of 1 million artisans by 2026.
  • Establish 10,000 community-managed skill centres in rural and tribal areas by 2025.
  • Develop training materials in 22 scheduled languages by 2023.
  • Train 100,000 tribal youth in eco-tourism skills by 2025, creating sustainable employment opportunities.

Urban Youth and the Future of Work

For urban youth, up skilling efforts should focus on preparing them for the evolving job market:

  • Aim to increase digital literacy among urban youth from the current 38% to 80% by 2026.
  • Prepare 5 million youth for the gig economy through freelancing and project management training by 2025.
  • Develop crucial soft skills like communication and adaptability for 10 million urban youth by 2024.
  • Offer training in Industry 4.0 technologies to 2 million youth by 2026.
  • Focus on green skills, aiming to train 1 million youth in sustainability sectors by 2025.

Conclusion

Up skilling India’s 365 million youth is not just an economic necessity but a social imperative. By addressing the unique challenges faced by different youth segments, leveraging economic insights, and implementing targeted solutions, India can harness its demographic dividend. 

Success will require a collaborative effort from government, industry, academia, and civil society to create an inclusive and adaptive upskilling ecosystem. As India aspires to become a $5 trillion economy by 2025, the effectiveness of its youth up skilling initiatives will play a crucial role in shaping its future.