India's demographic dividend is time-bound and contingent on productive employment absorption. In light of rising graduate unemployment, assess whether India is on track to reap it

Introduction:

With nearly 65% of its population in the working-age group, India’s dividend window—peaking around 2030—depends critically on its ability to generate productive jobs.

Body:

On the positive side, India has sustained relatively high growth, expanded digital infrastructure, and promoted manufacturing through initiatives like PLI schemes and Make in India. Sectors such as services, startups, and the gig economy have created new employment avenues. However, the employment elasticity of growth remains low, with much job creation concentrated in informal or low-productivity sectors. The Periodic Labour Force Survey (PLFS) data indicate disproportionately high unemployment among educated youth, reflecting a structural skill mismatch—graduates often lack industry-relevant skills, while vocational training remains underdeveloped.

Further, labour force participation—especially among women—remains low, constraining the effective utilisation of the demographic pool. The education system is skewed toward degrees rather than employability, while MSMEs, which are major job creators, face credit and regulatory constraints. Regional disparities and slow labour-intensive manufacturing growth (e.g., textiles, electronics assembly) further limit large-scale absorption. Without adequate job creation, the dividend risks turning into a demographic burden, increasing inequality and social stress.

Conclusion:

India is at a critical juncture: while the foundations exist, current trends suggest underutilisation of its workforce. Accelerating labour-intensive manufacturing, aligning education with market needs, boosting female participation, and strengthening MSMEs are essential to convert demographic potential into sustained economic gains before the window closes.