Every Independence Day is a time to reflect on our journey toward self-reliance and inclusive growth. Today, the imperative to formalise India’s workforce has never been stronger. By leveraging our demographic dividend, reinforcing skilling missions, and ensuring robust social security, we can build a resilient, future-ready workforce ecosystem.
Seizing India’s demographic windfall
According to EY’s report, by 2030, India’s working-age population (ages 15–64) is projected to exceed 1.04 billion, comprising approximately 68.9% of the total population. Concurrently, the overall dependency ratio is expected to decrease to a historic low of 31.2%.
However, to fully harness this demographic dividend, it is essential to expand formal employment opportunities. Currently, over 90% of India’s workforce operates in the informal sector, often in unincorporated enterprises without access to social protections or legal safeguards, which constrains the economy from realizing the full potential of its productive population. Though we lack exact figures for the 2018–2024 period, various sources confirm that a substantial majority of new jobs during this time have emerged in informal sectors, especially agriculture, construction, self-employment, and casual work. This growing informal workforce undercuts our productivity potential and deprives workers of stability and security.
Progress in Formalisation
There have been meaningful strides. Union Minister of Labour & Employment Mansukh Mandaviya stated at the Plenary Session of the 113th International Labour Conference that over the past seven years, India has created more than 7.5 crore formal-sector jobs. (The Economic Times)
Similarly, between 2017 and 2024, nearly 7 crore individuals joined the Employees’ Provident Fund Organisation (EPFO), indicating increased participation in contributory and more secure employment arrangements. These are encouraging indicators, even as we acknowledge that the formal employment share remains modest compared to a total workforce size.
During his Independence Day address on August 15, 2025, Prime Minister Narendra Modi announced the Employment-Linked Incentive (ELI) Scheme, now known as the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY). PM-VBRY is a significant initiative aimed at boosting formal employment in India. With a financial outlay of ₹1 lakh crore, the scheme targets the creation of over 3.5 crore jobs over two years. It offers incentives to both first-time employees and employers.
Skilling: A backbone for formal employment
At the heart of India’s formalisation efforts lies the National Skill Development Mission (NSDM), operating under the broader Skill India initiative. In the 2024–25 financial year, the mission achieved significant milestones through its key schemes:
- As of July 11, 2025, over 25 lakh candidates have been trained under PMKVY 4.0, focusing on both Short-Term Training (STT) and Recognition of Prior Learning (RPL). (Press Information Bureau)
- In the 2024–25 financial year, 289 Jan Shikshan Sansthans operated across 32 states and union territories, enrolling 4,29,762 beneficiaries, with 2,45,239 trained, 2,38,048 assessed, and 2,37,729 certified.
- NAPS (National Apprenticeship Promotion Scheme): As of July 31, 2024, 2.77 lakh apprentices were engaged, with a total of 7.46 lakh apprentices undergoing training across 47,311 establishments.
- CTS (Craftsmen Training Scheme) through ITIs: Currently, there are 26.58 lakh trainees enrolled in 14,643 ITIs across India, offering training in 169 NSQF-aligned trades. (dgt.gov.in)
- The Union Cabinet has approved a ₹60,000 crore national scheme aimed at upgrading 1,000 government-run Industrial Training Institutes (ITIs) and establishing five National Centres of Excellence for Skilling. This initiative is designed to enhance vocational training infrastructure and align courses with industry demands.
From policy to proximity
Success lies not just in crafting robust policies, but in ensuring they translate into tangible outcomes for India’s workforce. Bridging the gap between intent and impact requires a targeted, integrated approach:
- Bridge certified credentials with clear income gains: As emphasised by Union Minister Jayant Chaudhary, it is critical to ensure that certified skills translate into tangible livelihood improvements for youth.
- Leverage data-driven insights: The IFC-sponsored employability report highlights that 88% of India’s workforce occupies low-competency roles, while only 10–12% are in high-competency jobs. These insights should guide training investments toward sectors with strong vocational demand, such as IT, electronics, healthcare, and textiles.
- Expand apprenticeship models: Develop formal pathways co-designed by employers, training institutions, and certification bodies to ensure learning aligns with actual employment needs.
A call to employers
Building industries is important, but building the workforce that powers them is what creates enduring progress. India’s demographic edge can be a powerful lever for inclusive economic destiny—but only if matched with formal job growth, recognised credentials, quality skilling, and structured social protection. Employers must partner with policy mechanisms, embrace formal certification, invest in apprenticeship and training, and extend social security safeguards to their workforce. That is the path to nurturing not only strong industries but a resilient, equitable, future-ready India.
References:
- India lacks adequate valuation mechanism for skilled workers | The Economic Times | Aug 2025
- Skill Impact Bond | NSD
- ITI upgradation Plan and Industry Involvement | PIB | Aug 2025
- NCAER expects GDP growth of 7%-7.5% this fiscal | The Hindu | July 2024
