**Executive Summary**
The NCAER report, released on December 11, 2025, emphasizes the role of upskilling and small enterprises in boosting employment. The report highlights the need to address bottlenecks in workforce quality, participation, and labor productivity. It projects potential job growth by 2030 through focused interventions.
**Key Points / Main Content**
* **Employment Drivers:**
* Increase in employment is mainly due to rising self-employment, although the transition to a skilled labor force has been slow.
* Prioritizing employment and inclusive growth is crucial for India to leverage its economic potential.
* **Economic Impact:**
* Strengthening labor-intensive manufacturing and service sectors could sustain GDP growth at around 8%.
* A 1% increase in access to credit is expected to increase the number of hired workers by 45%.
* **Technological Integration:**
* Enterprises using digital technologies hire 78% more workers compared to those not using technology.
* Upskilling the workforce with new technologies and AI is vital for generating employment.
* **Growth Projections (by 2030):**
* Increasing the skilled workforce by 12 percentage points through formal skilling could lead to over a 13% increase in employment in labor-intensive sectors.
* Increasing the share of the skilled workforce by 9 percentage points could generate 9.3 million jobs.
* **Sector-Specific Recommendations:**
* Reorient production-linked incentives towards labor-intensive industries like textiles, garments, footwear, and food processing.
* Policy support for tourism, education, and health services can create large-scale, inclusive employment.
* **Multi-Fold Job Creation:**
* Moderate growth in Gross Output (GO) of labor-intensive sub-sectors within manufacturing and services will lead to multi-fold job creation: 53% in textiles, garments, and related industries; 79% more jobs in trade, hotel, and related services.
**Impact Analysis**
**Small Enterprises**
* **Impact:** Improving productivity of small enterprises is critical for employment growth. Need to move beyond subsistence level.
* **Action Required:** Embrace technology and increase capital investments to improve productivity.
**Workforce**
* **Impact:** Upskilling is necessary to benefit from new technologies and AI. Transition to a skilled labor force is vital.
* **Action Required:** Participate in formal skilling programs.
**Government/Policymakers**
* **Impact:** Can drive employment growth through strategic policy interventions and incentives.
* **Action Required:** Reorient production-linked incentives towards labor-intensive industries. Provide support for key service sectors (tourism, education, health).
**Manufacturing and Service Sectors**
* **Impact:** Significant potential for job creation by focusing on labor-intensive sub-sectors.
* **Action Required:** Prioritize labor-intensive industries and adopt new technologies to enhance productivity.
Key Entities Referenced
NCAER Report: Report by the National Council of Applied Economic Research on the potential for small enterprises and workforce skills to drive employment growth in India.
National Council of Applied Economic Research (NCAER): The organization that conducted the study and released the report on employment prospects in India.
Viksit Bharat: A vision document that seeks to promote employment opportunities in labour intensive industries.
Ministry of Finance
Increase in skilled workforce and productivity of
small enterprises can lead to substantial
employment growth in India: NCAER Report
Strengthening employment opportunities in labour-intensive
manufacturing and services sectors could help sustain GDP
growth of 8%
Even 1% increase in access to credit increases expected
number of hired workers by 45%
प्रव तथ: 12 DEC 2025 12:43PM by PIB Delhi
A study titled “India’s Employment Prospects: Pathways to Jobs”, was released by the Vice Chairman of
National Council of Applied Economic Research, Manish Sabharwal on 11th December, 2025. Authored
by Professor Farzana Afridi and her team of researchers at NCAER, the report underlines the role of
skilling and small enterprises as key drivers of job creation in the country. Further it highlights the need to
overcome bottlenecks in increasing both the quality and quantity of workforce participation and labour
productivity, says an NCAER report.
The report cites that the increase in employment is primarily due to the rise in self-employment, while
transition to a skilled labour force has been slow. Strengthening employment opportunities in labour-
intensive manufacturing and services sectors could help sustain GDP growth at around 8 per cent,
consistent with the vision of Viksit Bharat, it says.
Launching the report, NCAER Vice Chairman, Manish Sabharwal said, “India is on track to become the
world’s 3rd largest economy, and while its per capita GDP currently ranks 128th, this highlights valuable
opportunities to prioritise employment and inclusive growth.”
“India’s self-employment dominance is due to economic necessity rather than entrepreneurial dynamism.
Just like small farmers, most of the small enterprises function at subsistence level. India must confront the
reality that its employment future is tied to the productivity of its smallest enterprises,” said Prof Afridi.
The main challenge is that the unincorporated household enterprises operate with low levels of capital,
productivity and technology adoption.
“Enterprises using digital technologies hire 78% more workers as compared to those not using tech. Even
1% increase in access to credit increases expected number of hired workers by 45%,” said the lead author.
Regarding persistent challenges in generating employment despite a distinct demographic advantage, the
report says that on the supply side, India’s workforce could benefit greatly from upskilling, particularly
with the advent of new technologies and AI. Medium-skilled jobs dominate employment growth,especially in services, whereas manufacturing remains low-skill intensive. “Increasing the share of skilled
work force by 12 percentage points through investment in formal skilling could lead to more than a 13%
increase in employment in the labour-intensive sectors by 2030,” it says.
Simulations in the study show that increasing the formally skilled workforce under the moderate growth
scenario could lead to significant job gains in the labour-intensive sectors. “Increasing the share of skilled
workforce by 9 percentage points could generate 9.3 million jobs by 2030,” it says.
Discussing the report, Dr GC Manna, Senior Advisor, NCAER said the report highlights the key sectors
with strong potential for driving employment growth.
Professor Aditya Bhattacharjea, Visiting Professor, Institute for Studies in Industrial Development, said,
“The report places India in an international context and highlights areas where the country has unique
opportunities for improvement and stronger alignment with global benchmarks.”
The report estimates the multiplier effects of inter-sectoral linkages to project that a moderate growth in
Gross Output (GO) of the relatively more labour-intensive sub-sectors within manufacturing and services
will lead to multi-fold job creation by 2030 –53% in the textile, garments, and related industries in
manufacturing, and 79% more jobs in trade, hotel, and related services.
It recommends targeted interventions to unlock employment potential in specific sectors. In
manufacturing, reorienting production-linked incentives towards labour-intensive industries such as
textiles, garments, footwear, and food processing can yield higher job multipliers. In services, policy
support for tourism, education and health can create large-scale, inclusive employment.
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