7. The Future of Jobs for Youth

The Indian labour market has undergone significant changes over the past two decades, shaped by economic growth, technological change, and the COVID-19 pandemic. Understanding these developments is crucial for designing effective policies for the future of jobs for youth.

Key developments:

• Slow structural transformation: The shift of labour from agriculture to manufacturing and services has been slower than expected. The share of manufacturing in employment has remained stagnant at around 12-14%, while construction and services have absorbed most of the workers leaving agriculture.
• Rising informality: Despite economic growth, the share of informal employment has remained high. The quality of employment, measured by factors such as job security, social security, and wages, has not improved significantly for the majority of workers.
• Technological change: The rapid advancement of digital technologies, automation, and artificial intelligence is reshaping the world of work. While the immediate impact on employment in India may be limited due to the low robotization rate, the medium-term implications are significant.
• Gig economy growth: The platform and gig economy has expanded rapidly, creating new opportunities but also raising concerns about job security, working conditions, and social protection for gig workers.
• Demographic shift: India's population growth is slowing, and the country is aging, although at a slower pace than many developed countries. The window of opportunity to capitalize on the demographic dividend is narrowing.
• Climate change: The transition to a green economy will create new job opportunities in renewable energy, sustainable agriculture, and environmental services, but may also displace workers in carbon-intensive sectors.

Based on the analysis of labour market trends and challenges, the report identifies an emerging policy agenda that addresses both long-standing issues and new challenges:

The report concludes with specific pointers for the way ahead, emphasizing the need for a comprehensive and coordinated approach to addressing India's employment challenges:

• Accelerate structural transformation: Prioritize manufacturing-led growth and the creation of productive jobs outside agriculture. Support the development of clusters, special economic zones, and industrial corridors.
• Invest in human capital: Improve the quality of education at all levels, expand vocational training, and promote lifelong learning. Address the skills mismatch and prepare youth for the jobs of the future.
• Promote formalization: Extend social protection and labour rights to informal workers. Simplify registration, compliance, and access to benefits for micro and small enterprises.
• Support youth employment: Implement targeted programmes for youth, including apprenticeships, job search assistance, and entrepreneurship support. Address the specific challenges faced by educated unemployed youth.
• Leverage technology: Harness digital technologies for job creation, skills development, and labour market matching. Support the growth of the digital economy while ensuring decent work for platform workers.
• Strengthen data and research: Improve labour market data collection, analysis, and dissemination. Support research on employment trends, policy effectiveness, and emerging challenges.
• Enhance coordination: Improve coordination between central and state governments, and between government, employers, and trade unions. Ensure that employment policies are integrated with economic, social, and environmental policies.