Economy
53% of graduates, 36% of postgraduates underemployed: Economic Survey
Summary
- The Economic Survey 2025 reveals a pressing need for reskilling in India’s workforce, citing a significant gap between academic skills and job market demands.
Mumbai: The Economic Survey on Friday emphasizes the need for reskilling the workforce to keep pace with global technological changes.
The survey for 2024-2025, tabled in Parliament, warns of a mismatch between the skills taught in educational institutions and the demands of employers, leading many postgraduates to be employed in positions that do not match their qualifications.
A key challenge in the skills landscape is the prevalence of low-skilled workers, which can be attributed to the quality of educational outcomes across various levels of education. "Low educational skills in the workforce make a mismatch between their academic qualifications and job market demands," the survey stated.
Budget 2025 | Skilling India: a budgetary imperative for global leadership
Last year's survey highlighted that the Indian economy needs to create an average of 7.85 million non-farm jobs annually until 2030 to effectively engage its growing working population. Therefore, the pressure to generate more jobs in diverse industries becomes crucial.
"This mismatch has resulted in over 53% of graduates and 36% of postgraduates being underemployed in roles below their educational qualifications", the survey highlighted.
Meanwhile, the sluggishness in the labour workforce, seen during the pandemic years, seems to have ebbed.
According to the survey, the 2023-24 annual Periodic Labour Force Survey (PLFS) report by the National Statistical Organisation (NSO) highlights a "significant post-pandemic recovery in employment trends across India". The all-India annual unemployment rate (UR) for individuals aged 15 years and above (usual status) has steadily declined from 6% in 2017-18 to 3.2% in 2023-24.
Interestingly, the proportion of self-employed workers in the workforce has risen to 58.4% in 2023-24 from 52.2% in 2017-18. This shift reflects "growing entrepreneurial activity" and a preference for "flexible work arrangements". The share of workers (male and female) in regular/salaried jobs decreased from 22.8% to 21.7% during the same period, the trend has stabilized since 2020-21, with employment levels either holding steady or showing gradual improvement.
A key indicator of the formalization in the job market is the payroll data from the Employees’ Provident Fund Organisation (EPFO) which shows net additions have shot up from 61 lakh in FY19 to 131 lakh in FY24.
Also Read: Economic Survey calls for regulations to balance growth, stability
