India's demographic landscape is characterized by a youthful population, with 65% of its citizens under the age of 35. However, a recent report from the Economic Survey 2023-24, presented in Parliament on July 22, reveals a troubling reality: only 51.25% of graduates in India are deemed employable. This statistic underscores a significant skills gap that poses challenges for the nation’s ambition to become a $5 trillion economy by 2025.
The Alarming Employability Statistic
The Economic Survey highlights that nearly half of the youth graduating from educational institutions are not ready for the job market. This figure represents a notable improvement from the 34% employability rate reported a decade ago, indicating some progress in addressing the skills crisis. Despite this positive trend, the current employability rate remains critically low, raising concerns about the effectiveness of the education system in equipping students with necessary job skills.
Challenges in Vocational Training
One of the key findings of the report is the alarmingly low participation in formal vocational training. Only 2.2% of individuals aged 15-59 have received formal vocational training, while a mere 8.6% have undergone non-formal training. This lack of training options contributes to the skills gap, as many young people are not acquiring the practical skills needed in today's job market. Furthermore, public perception often views skill development as a fallback option for those who have struggled in the traditional education system, further discouraging engagement in vocational training.
A Shift in Unemployment Rates
Interestingly, while employability remains low, the unemployment rate among youth aged 15-29 has seen a significant decline, dropping from 17.8% in 2017-18 to 10% in 2022-23. This decline suggests that while fewer graduates are job-ready, those who are entering the workforce are finding employment, albeit in a competitive market. The improvement in youth employment is also reflected in formal employment figures, as indicated by data from the Employees’ Provident Fund Organisation (EPFO).
Reforming Apprenticeships and Skill Development Programs
The report advocates for a reform of India’s apprenticeship framework, emphasizing the need for better compensation and work-hour flexibility. Such reforms could enhance the skills of the workforce and improve the employability of vocational students. The current regulatory framework does not adequately support apprentices, leading to inconsistencies in productivity and working hours. By creating more flexible arrangements, both apprentices and employers could benefit from a more productive engagement.
Harnessing the Demographic Dividend
The Economic Survey concludes with a call to action, emphasizing the need for India to nurture a workforce equipped with employable skills to fully harness its demographic dividend. With a median age of 28, India's youth population presents a unique opportunity for economic growth, provided that effective strategies are implemented to bridge the skills gap. The report serves as a reminder of the urgent need to align educational outcomes with industry requirements, ensuring that the next generation is prepared for the demands of a modern economy.
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