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Skill in Indian Labour Market: Current Trends and Estimating Future Gaps

Author

Listed:
  • Sanjukta De
  • Dipa Mukherjee
  • Jhilam Ray

Abstract

Countries with a higher proportion of the working age population can achieve higher growth rate if this labour force is employed optimally and productively. India is going through this stage of demographic transition but the recent macroeconomic trend does not indicate that India is reaping any demographic dividend. A large mass of manpower is not engaged productively and both unemployment and underemployment are increasing. A mismatch between labour demand and labour supply both in terms of quantity and quality is observed. In this context, this article tries to forecast the future labour market situation in India across different industries, occupations and skill groups. Results indicate surplus labour for lower skill categories and shortages for higher skill categories soon. The new economy is expected to be more dependent on machines and skilled workers conversant with them. With the fourth industrial revolution looming large, demand for skilled professionals would increase further, while a huge surplus of low-skilled labour force released by the primary sectors would coexist. A twin strategy of targeted employment expansion programs and up-skilling labour force to fit the demands of the new economy is called for. Otherwise, a demographic disaster would explode in our faces. JEL: E24, J6, J10, J11, J23, J24

Suggested Citation

  • Sanjukta De & Dipa Mukherjee & Jhilam Ray, 2025. "Skill in Indian Labour Market: Current Trends and Estimating Future Gaps," Arthaniti: Journal of Economic Theory and Practice, , vol. 24(1), pages 103-129, June.
  • Handle: RePEc:sae:artjou:v:24:y:2025:i:1:p:103-129
    DOI: 10.1177/09767479221138961
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    More about this item

    Keywords

    Demographic dividend; employability; skill; unemployment; skill mapping; labour demand projection; India;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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