India is witnessing encouraging momentum in employment growth, according to the latest World Bank report. The study revealed that the number of jobs in the country has been growing faster than its working-age population, indicating a positive shift in the labor market dynamics.
However, the report also warned about persistent challenges that could undermine these gains. Youth unemployment remains alarmingly high at 13.3%, with an even steeper 29% unemployment rate among those who have completed higher education. This indicates a significant skills-job mismatch, where higher educational qualifications are not translating into suitable employment opportunities.
Additionally, the report flagged concerns regarding the nature of employment in India. “Only 23 per cent of non-farm paid jobs are formal, and most agricultural employment remains informal,” the World Bank said. Informality continues to dominate the labor market, raising concerns about job security, social benefits, and long-term career growth for millions of workers.
The report also pointed to a notable rise in self-employment, especially among rural populations and women. Many rural workers and women are turning to entrepreneurship, small businesses, and informal gigs as a means of livelihood, partly reflecting resilience but also highlighting the lack of stable, formal employment opportunities.
Further, the report emphasized the need for policy interventions to create more formal jobs, improve labor market conditions, enhance the quality of education, and bridge the gap between skills and market demands.
While the trend of job growth outpacing the expansion of the working-age population is promising, the World Bank stressed that India must address its structural challenges to fully leverage its demographic dividend and ensure inclusive, sustainable economic growth.
