Rising employment levels in the formal sector have also been supported by improved education infrastructure and enhanced quality of education, which has increased the employability of the young labour force. According to India Skills Report 2023, the employable percentage of final-year and pre-final-year students increased from 33.9 percent in 2014 to 50.3 percent in 2023.
Wheebox (an online skill assessment venture run by Integrated Learning Solution Pvt Ltd) has been preparing the India Skills report since 2014 in partnership with CII, Taggd, AICTE, AIU, Sunstone, Pearson, AWS, and Economic Times. The Wheebox Employability Test assesses students’ work readiness for India’s changing employment market online, including technical and psychometric evaluation. In 2022, Over 3.75 lakh students were surveyed from various domains and educational backgrounds for WNET. Survey results were analysed based on educational domain, specific skill-oriented employability, state-specific employability, etc., to arrive at the national figure.
Going forward, employment levels are expected to remain buoyant, mainly driven by rapid digitalisation, technological advancement, and the expanding implementation of the PLI scheme, thereby creating employment avenues for both semi-skilled and skilled workers.
Growth with rising inclusivity 12. The rising employment levels, along with calibrated fiscal stimulus and a significant upscaling of public capex, created a demand boost in the Indian economy to accelerate growth from FY21 to FY23. As job creation played a critical role in boosting demand, it bespeaks the rising inclusivity in the growth of the Indian economy. Rising inclusivity is neither temporary nor transitional. It is now becoming deep-rooted with increasing job creation in the formal sector as the latter continues to expand on the back of Aadhaar, the e-shram portal for registration of unorganised workers, registration of MSMEs on the Udyam Portal, and the implementation of GST, among others.
Job creation in the formal sector has been accelerating over the years, as reflected in a level shift of net monthly payroll additions under the Employees Provident Fund Organisation (EPFO), signalling increased formalisation of the economy. In FY23, net members added by EPFO reached a four-year high, growing by double-digits over the previous year. The annual trend across sectors reveals that the expert service sector (consisting of manpower suppliers, normal contractors, and security services, among others) contributed 51 percent to formal job creation. Schools and financing establishments have also significantly increased their contribution to formal employment generation in FY23. On a YoY basis, however, net additions grew significantly in the first three quarters before moderating in Q4 of FY23. The moderation, in part, is explained by the slowing of employment generation in the Information Technology (IT) sector. This mirrors the global slowdown in IT hiring activity following the exuberant hiring during the pandemic period.
Major Contributor to the Formal Job Creation
Building & Construction, Electronica, mechanical or general Engg. products Engineers- Engg. contractors Establishment engages in the manufacture, marketing servicing, usage of computers Establishments engaged in cleaning, sweeping services Expert services Financing establishment Garments making Others