The wealth of a nation lies in its people, and in India, 1.4 billion aspirations drive the country’s progress. Over the past decade, the Government of India has made job creation a central focus of its governance, yielding transformational results. However, as with any significant endeavour, there is much to celebrate, but there are challenges that require greater attention in the years to come. India is at a remarkable crossroads. With the largest population in the world and one of the youngest workforces globally, the nation enjoys a unique advantage.

Approximately 68 per cent of its population is of working age. India’s median age is 29.5 years, which starkly contrasts with China’s 39.8 years and the United Kingdom’s 40.6 years. This emphasizes the tremendous potential of a dynamic, innovative, and youthful workforce. This demographic dividend presents a fleeting opportunity that, if effectively harnessed, could propel the country into unprecedented economic growth. Job creation has been a central focus of the government over the past decade, driven by an explicit acknowledgement of its importance for economic development and social stability. The statistics highlight this progress: between 2014 and 2024, India created 17.19 crore more jobs, compared to the previous decade’s creation of just 2.9 crore jobs (2004-14).

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Notably, 4.6 crore jobs were added in the year 2023-24 alone, demonstrating the scale and ambition of the government’s policies. These initiatives have been transformative in terms of numbers and their impact on reducing unemployment and increasing workforce participation. The unemployment rate fell from 6 per cent in 2017-18 to 3.2 per cent in 2023-24, while the labour force participation rate rose from 49.8 per cent to 60.1 per cent during the same period. Notably, progress has been significant at the sectoral level. A 19 per cent increase in agricultural employment between 2014 and 2023, reversing a 16 per cent decline in the previous ten years (2004- 14).

In manufacturing, employment rose by 15 per cent (2014-23), more than double the growth in the prior decade. These outcomes are indicative of the effectiveness of targeted policies. But these are not both sides of the same coin. Ma – nufacturing, for instance, is a sector with enormous job creation potential. But its share of GDP has persisted at around 15 per cent ~ a far cry from the target of 25 per cent that the National Manufacturing Policy had set. In contrast, manufacturing accounts for 28 per cent of China’s GDP and 25 per cent of South Korea’s. Though the Rs 1.97 lakh crore-outlay under the Production Linked Incentive scheme has ensured sizeable investments in electronics manufacturing and $15.6 billion in exports of mobile phones in FY 2022-23 ~ employment generated remains well below expectation. The PLI scheme needs recasting to align the incentives more directly with job generation. Fiscal stresses are another inhibiting factor.

The tax-toGDP ratio in India stands at 11.7 per cent, limiting its investment in job-generating sectors. Although GST collections have consistently crossed Rs 1.5 lakh crore every month, structural reforms are needed to widen the tax base and reach the 20 per cent tax-to-GDP ratio of peer economies. Improvement in tax compliance, modernisation of property taxes, and use of AI in GST analytics can bring in much-needed fiscal space. The MSME Sector represents the most significant opportunity for achieving inclusive growth in this decade. To put this in perspective, with 63.4 million enterprises contributing 30 per cent to GDP and employing over 100 million people, the MSME sector’s economic footprint is much larger than the entire economy of countries like Thailand or Sweden. MSMEs have a Rs 20-25 lakh crore credit gap. Access to credit for this sector should be ensured as it has immense employment generation potential.

At the same time we should also focus more on high-skill, high-pay employment opportunities. India has one of the world’s most significant numbers of graduates in STEM ~ science, technology, engineering, and mathematics ~ fields. Closer connections between India’s technical colleges, employers, and investors can help support better job-matching, continued skills development, and start-up growth ~ which can turn job seekers into job creators. What the government needs to do now is future-proof the Indian workforce through recalibration of the PLI scheme, scaling up investments in green energy, and fostering innovation in emerging fields such as artificial intelligence, automation, and electric mobility. For instance, India’s ambitious target of achieving 500 GW of non-fossil fuel energy by 2030 is good for the environment and will become one of the biggest job generators. Likewise, the Indian space economy, valued today at $8.4 billion, is supposed to reach $44 billion by 2033 and would create thousands of specialised roles in that field. In the long term, India needs to invest in better education and support women in entering the formal workforce to shift more of its population away from precarious work.

That will support income growth and, in turn, drive further job creation. Partnerships will be necessary to achieve this. Public-private collaborations, community engagement, and citizen feedback may help refine their strategies and bring inclusive growth in their wake. Global disruptions ~ the Covid-19 pandemic, geopolitical tensions, and economic slowdowns ~ have tested India’s resilience. But more importantly, they brought home the message that the strategic policy to create employment has to be strong and responsive. And this is why we, reflecting over the past ten years, must realize that this journey for a prosperous India has just about begun. The government has laid the foundation, and it laid the right direction. Sustained effort, strategic reforms, and collective will can ensure that India converts the demographic dividend into a demographic boon and an opportunity for every citizen, fulfilling the promise of a truly “Viksit Bharat” by 2047.

(The writer is Professor of Finance – XLRI Xavier School of Management and a BJP leader)