As India enters a crucial demographic phase with a rising number of working-age citizens, the government has announced new incentives aimed at boosting employment. However, experts warn that structural challenges—particularly a shortage of skilled workers—could limit the scheme’s effectiveness, as per an analytical report by Bloomberg.
In 2019, India entered what demographers consider its most favorable window for economic growth: a period when the working-age population outnumbers dependents, including children and the elderly. This phase is expected to continue for the next three decades, offering the country a rare opportunity to accelerate development.
To capitalize on this, the central government recently introduced an “employment-linked incentive” program. Under the scheme, companies hiring new workers will receive a subsidy of Rs 3,000 per employee per month. Additionally, the government will contribute one month of social security payments. The benefits will last for two years, or four years in the case of manufacturing firms.
The initiative comes amid growing concerns over India’s job market, reported Bloomberg. Although GDP growth has remained steady, job creation has lagged. A stark example occurred in 2022, when more than 12 million applicants competed for 35,000 positions in Indian Railways, leading to protests over the selection process.
Industry representatives and labour economists point out that while financial incentives may encourage some hiring, the bigger issue lies in the lack of adequately skilled workers, as per Bloomberg. Employers across sectors, particularly in manufacturing, often report difficulty finding candidates with the right training and reliability.
Education experts have flagged foundational learning gaps in primary education as a key concern. A widely cited school survey found that only one in four third-grade students could solve basic subtraction problems typically taught in second grade, claimed Bloomberg, adding learning deficits tend to widen as students’ progress through higher grades.
Source- https://www.republicworld.com/business/beyond-degrees-why-india-s-millions-need-new-skills-now