NCAER Report: Systemic Overhaul of Skilling and Demand-Side Reforms Critical for India's Job Growth to Generate 9.3 Million Jobs by 2030 and Meet 8% GVA Target
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure
National Council of Applied Economic Research (NCAER) | Ministry of Skill Development and Entrepreneurship (MSDE) | Department for Promotion of Industry and Internal Trade (DPIIT)
This NCAER report titled ‘India’s Employment Prospects: Pathways to Jobs’ assesses India’s labour market challenges and proposes pathways for generating productive employment aligned with the Viksit Bharat 2047 vision. It highlights that India’s economic growth is shadowed by challenges in generating productive employment, characterized by a sluggish shift to a skilled workforce and a dominant reliance on low-productivity self-employment. The services sector and labour-intensive sub-sectors within manufacturing (which together account for 51.3% of total employment in these two sectors) are identified as the key potential drivers for job creation.
Key findings and projections from the NCAER report:
Demand-Side Potential: Simulations suggest that aligning output growth with an annual 8% Gross Value Added (GVA) target, necessary for the Viksit Bharat vision, could be achieved if manufacturing and services grow at 8.2% and 9.0% respectively. This translates to a projected annual addition of 71,543 (3.9%) new workers in manufacturing and 2,79,130 (2.4%) in services under a moderate growth scenario.
Multiplier Effects: By 2030, moderate Gross Output (GO) growth in labour-intensive sub-sectors could generate multi-fold job creation 16161616, with a projected increase of 57% in textile and textile products and 79% more jobs in trade, hotel, and related services, driven by spillover effects through supply chains.
Supply-Side Gaps: As of 2024, only 4.1% of the workers had received formal vocational training. Although formal training significantly increases the predicted probability of securing “good” jobs (regular salaried and high-skill positions). India’s Vocational Education and Training (VET) system suffers from structural issues like weak industry linkages, under-utilised seats, poor placement rates, and low public investment (3% of total education expenditure compared to 10–13% in countries like Germany, Singapore, and Canada).
Skilling Impact: Increasing the share of the formally trained workforce by 9 percentage points could generate an estimated 9.3 million jobs by 2030 representing an around 8.9% rise in employment across labour-intensive sectors.
Informal Sector Productivity: The informal, unincorporated sector is dominated by low-productivity Own Account Enterprises (OAEs). A 10% increase in Gross Value Added (GVA) is associated with an approximately 4.5% increase in hired workers. Upgrading Manufacturing OAEs to Hired Worker Enterprises (HWEs) yields larger per-firm job gains, with access to digital tools and institutional credit being crucial for medium and large enterprises, boosting their GVA 2–3x to enable productive entrepreneurship.
What is the “Viksit Bharat 2047” employment vision? The Viksit Bharat 2047 vision aims to transform India into a developed nation by the 100th year of its independence, with a core goal of sustaining high economic growth (often cited as 8% GDP growth) and achieving inclusive economic participation, which requires the annual creation of approximately 7.8 million non-farm jobs until 2030, as specified by the Economic Survey.
What is GVA? → Gross Value Added (GVA) measures the value of goods and services produced in an economy minus the cost of inputs and raw materials used. It reflects the real contribution of each sector—agriculture, industry, or services—to overall output. GVA is a core indicator used by MoSPI and NITI Aayog to track growth, productivity and structural shifts within the economy.
Policy Relevance
The report argues that achieving the targeted economic growth requires a dual-focus policy agenda: substantially increasing formal skill development on the supply side, and adopting targeted demand-side measures37. The recommendation to reorient Production-Linked Incentives (PLI) toward labour-intensive industries (like textiles, garments, footwear, and food processing) directly addresses the current policy mismatch where over 50% of the PLI budget is focused on capital-intensive electronics , despite food processing and pharmaceuticals creating the highest number of jobs41. This strategic shift, combined with comprehensive VET reforms and easing credit/regulatory constraints for MSMEs , is necessary to translate strong growth into sustainable, high-quality employment.
Follow the full report here: India’s Employment Prospects: Pathways to Job