India’s economy has witnessed a remarkable transformation over the past decade. Rising from the world’s 10th largest economy in 2014 to the fourth largest by 2025, India’s growth is powered by its vast labour force. Employment generation and social security expansion have been central to this progress. The government’s latest initiative, the Pradhan Mantri Viksit Bharat Rozgar Yojana, aims to further accelerate job creation and formalisation, leveraging India’s demographic advantage.
Economic Growth and Employment Expansion
India’s GDP growth has been accompanied by a surge in employment. Between 2004 and 2014, only 2.9 crore jobs were created. However, from 2014 to 2024, over 17 crore new jobs emerged. This shift signals a stronger labour market and increased economic participation. Formal employment has also grown, with more workers covered under social security schemes.
Social Security Coverage Growth
In 2015, only 19% of India’s workforce was covered by social protection. By 2025, this figure rose to 64.3%, covering 94 crore people. This expansion makes India’s social security system the second largest globally. The International Labour Organization recognised this as one of the fastest coverage expansions worldwide. Social security now plays a key role in worker protection and economic stability.
Demographic Dividend and Youth Employment
India’s population is young, with about 65% under 35 years old. This demographic dividend offers economic advantage over ageing Western countries. However, realising this potential requires making youth employable and integrating them into the formal economy. Financial literacy and social security are essential to ensure sustainable employment and dignity for workers.
Pradhan Mantri Viksit Bharat Rozgar Yojana
Launched in 2024, this ₹1 lakh crore scheme aims to create over 3.5 crore jobs in two years. It targets both youth employability and enterprise competitiveness. Part A offers up to ₹15,000 to first-time employees in two instalments. Part B provides employers up to ₹3,000 per new hire monthly. This dual incentive lowers barriers for workers and reduces hiring risks for businesses.
Focus on Formalisation and Transparency
The scheme promotes formal employment by linking benefits to social security from day one. Direct Benefit Transfer ensures transparency and efficient fund flow. Emphasis on manufacturing sector incentives supports India’s goal of becoming self-reliant. The approach shifts from isolated schemes to a comprehensive employment ecosystem.
Integration with Broader Economic Initiatives
The scheme complements initiatives like Production-Linked Incentive, National Manufacturing Mission, and Make in India. It recognises changing global work dynamics and the need for competitive yet inclusive growth. By supporting workers and employers, it aims to build a resilient labour market that embraces digital innovation and manufacturing growth.
Nation-Building Through Employment
Employment is seen as a pillar of dignity, equality, and national strength. The government’s focus is on turning demographic potential into prosperity. The scheme ensures that no youth is left behind and every worker has access to meaningful and secure work. This approach underlines employment’s role in India’s journey to becoming a developed nation by 2047.
Questions for UPSC:
- Point out the factors responsible for India’s demographic dividend and estimate its impact on economic growth.
- Critically analyse the role of social security systems in labour market formalisation with suitable examples from India.
- Underline the challenges faced by youth employment in India and how government schemes address these issues.
- What is the significance of the Pradhan Mantri Viksit Bharat Rozgar Yojana in India’s employment landscape? How does it integrate with broader economic policies?
