These rapid massifications of schools in the nineties and noughties and then of higher education enrolment have had three educational and, hence, labour market outcomes. First, the education/skill composition of India’s workforce remains appalling. Illiteracy remains frighteningly high at over one-fifth of the total population (over one-fourth for women) in 2024. Workers with eight years or below of schooling account for another 19 and 21 percent, respectively. Thus, nearly two-thirds of India’s current workforce barely has eight or fewer years of schooling. Also, merely 2.4 percent of the workforce has formal vocational training (VET) and another 4.7 percent any higher education technical training in 2024—though the NEP 2020 aspires to take VET enrolment to a colossal 50 percent.
Second, with such a poorly educated workforce, it is not surprising that 90 percent of India’s workforce toils in the informal sector, lacking the skills to secure a formal job in larger enterprises. This statistic has not changed for the last two recorded decades.
Third, as the quality of learning is poor at both school and higher education levels, open unemployment among youths has grown. It used to be only six percent among aged 15-29 years in 2011-12, but tripled to 18 percent by 2017-18.
Jobs growth collapsed in smaller businesses the year after the globally-unprecedented, “revolutionary” decision to demonetise 86 percent of India’s currency. Then a poorly-designed and ill-implemented GST regime caused further massive closure and downturn. This was followed by growth slowing each quarter till Covid. Finally, as job growth collapsed and 8 crore workers spiralled down to agriculture and related activities between 2020 and 2024, people finally began to ask: can India really take advantage of its demographic dividend?
