A recent study by the National Council of Applied Economic Research (NCAER) has underlined a critical roadmap for India’s employment future.

According to the new report, strengthening workforce skills and improving the productivity of small enterprises could significantly accelerate job creation, enabling the country to maintain a GDP growth trajectory of nearly 8% over the next decade.

The National Council of Applied Economic Research (NCAER) study titled “India’s Employment Prospects: Pathways to Jobs”, led by Professor Farzana Afridi, was released on December 11 by NCAER Vice Chairman Manish Sabharwal. The findings arrive at a time when India is witnessing major structural employment shifts fuelled by digital technologies, rising service-sector demand, and rapid industrial transformation.

Key Insights from the NCAER Report

Self-Employment Dominates, but Skill Transformation Lags

The report reveals that India’s recent employment gains are primarily driven by self-employment. However, the transition toward a skilled workforce continues to be slow. Many small enterprises remain stuck at subsistence levels due to limited capital, low productivity and slow adoption of modern technologies.

In his address at the launch event, Sabharwal emphasised the importance of India’s growth momentum, stating,
“India is on track to become the world’s third-largest economy, and its low per capita GDP ranking presents a strong opportunity to prioritise employment and inclusive growth.”

Entrepreneurship vs Necessity

Professor Afridi explained that self-employment in India is often a signal of compulsion rather than opportunity-driven entrepreneurship.
She stated,
“India must confront the reality that its employment future is tied to the productivity of its smallest enterprises.”

The report adds striking evidence: enterprises using digital tools employ 78% more workers compared to those that do not, and even a 1% increase in access to credit leads to a 45% rise in hired workers.

The Role of Skills in India’s Employment Boom

Demographic Advantage Needs Skill Power

With India’s working-age population set to increase until at least the mid-2030s, NCAER stresses that the benefits of this demographic dividend will materialise only through major improvements in workforce skill levels.

Medium-Skilled Jobs Driving Growth

The study notes that emerging technologies, including artificial intelligence, automation and digital platforms, are reshaping the job landscape. As a result, medium-skilled service jobs are driving the highest employment growth.

Manufacturing, however, remains heavily concentrated in low-skilled roles, highlighting the urgency of formal skill development.

Projected Employment Impact of Skill Growth

The study offers strong evidence of how skills can transform employment outcomes:

• A 12 percentage-point increase in the share of skilled workers could raise employment in labour-intensive sectors by more than 13% by 2030.

• A 9 percentage-point rise in skilled workers could generate 9.3 million jobs by 2030.

These projections underscore how strategic investment in training and skill development could serve as a national growth multiplier.

Sectoral Growth Potential Highlighted in the Report

Insights from Senior Economists

NCAER Senior Advisor Dr. G.C. Manna noted that the report identifies high-potential sectors poised for strong job expansion.
Meanwhile, Professor Aditya Bhattacharjea highlighted that the study aligns India’s employment strategies with global best practices, offering a comparative international context.

Multiplier Effects and Sectoral Job Growth

Using multiplier estimates, the report projects significant job gains in labour-intensive sectors by 2030:

• Employment in textiles, garments and related manufacturing could rise by 53%.

• Employment in trade, hotels and related services could rise by 79%.

These results are based on moderate growth assumptions, suggesting that policy reforms and targeted investments could push job creation even further.

Policy Recommendations to Unlock Employment Growth

Manufacturing Sector: Focus on Labour-Intensive Industries

The report recommends a shift in production-linked incentives (PLI) to strengthen labour-intensive manufacturing segments such as:

Key Labour-Intensive Sectors

• Textiles

• Garments

• Footwear

• Food processing

Boosting these sectors could generate millions of jobs while enhancing India’s global manufacturing competitiveness.

Services Sector: Expanding Inclusive Job Creation

To support large-scale employment, the report calls for amplified policy support in:

High-Potential Service Industries

• Tourism

• Education

• Healthcare

These sectors have historically shown strong hiring capacities and can absorb large numbers of medium-skilled workers.

Conclusion

The NCAER report sends a clear message: India’s future employment growth hinges on two major pillars—a skilled workforce and productive, competitive small enterprises. With digital adoption, targeted skill-building, and supportive industrial policies, India can unlock millions of new jobs, strengthen economic inclusion, and maintain its trajectory toward becoming one of the world’s largest economies.