Skills & Employment

Skilling for AI Readiness (SOAR) Programme: Building an AI-Ready Generation

Context: India has launched the Skilling for AI Readiness (SOAR) Programme under the Ministry of Skill Development and Entrepreneurship (MSDE) to prepare students and educators for the Artificial Intelligence (AI)-driven future. The initiative aligns with India’s goal of becoming a global hub for AI innovation and digital talent.

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About the SOAR Programme

The SOAR (Skilling for AI Readiness) initiative seeks to embed AI learning into India’s school education and vocational training ecosystem, focusing on early AI literacy, teacher capacity-building, and inclusive digital education.

Its long-term vision is to make India a global leader in AI-led innovation, employment, and entrepreneurship by equipping the youth with future-ready skills.

Key Features of the SOAR Programme

  • Target Audience: Students from Classes VI–XII and educators nationwide.
  • Structured Learning:
    • Students: Three foundational 15-hour AI modules covering basics of AI, machine learning, data literacy, and ethical AI use.
    • Teachers: A 45-hour specialized module on AI pedagogy, integration, and classroom innovation.
  • Ethics & Inclusion: Emphasizes responsible AI, promoting awareness of data privacy, bias prevention, and ethical digital citizenship.
  • Budgetary Support: The Union Budget 2025–26 has allocated ₹500 crore to establish a Centre of Excellence in Artificial Intelligence for Education under MSDE.

Centre of Excellence in AI for Education

The proposed Centre aims to:

  • Develop AI-powered learning tools and teaching aids.
  • Promote multilingual AI resources in Indian languages for inclusivity.
  • Foster AI curriculum innovation across technical institutes, including IITs and AICTE-approved colleges.
  • Encourage industry–academia collaboration for AI research and practical skill-building.

Significance

  • Bridging the Skill Gap: Strengthens India’s workforce readiness for Industry 4.0.
  • Educational Reform: Introduces early AI literacy within the NEP 2020 framework.
  • Employment Catalyst: Creates a foundation for AI-driven startups, research, and jobs.
  • Digital Inclusion: Ensures access to AI learning for students from diverse linguistic and socio-economic backgrounds.

Conclusion

The SOAR Programme reflects India’s strategic focus on integrating AI education within its skilling ecosystem. By empowering students and teachers with AI competencies, India aims to transform from a technology consumer to an innovation-driven economy, reinforcing its role in shaping the global AI landscape.

India as a Global Talent Hub

Context: Amid global labour crisis, the government should focus on setting up an institutional framework to drive overseas employment. 

Relevance of the Topic: Mains: India’s Migration Strategy: Migrants and Diaspora Welfare. 

India’s Demographic Advantage

  • India has a young population and high human capital, placing it at a strategic advantage to supply global labour needs. 
  • India’s migrants generate $125 billion in remittances annually, about 3% of GDP—higher than any merchandise export sector. However, migrants form only 1.3% of India's population, compared to Mexico (8%), Philippines (5%), and Bangladesh, showing an untapped potential.
  • High-income countries are projected to face a labour gap of 40-50 million by 2030, rising to 120-160 million by 2040, across sectors like healthcare, engineering, teaching, and construction. E.g., Europe: 73% in truck drivers, 50%+ in engineers, nurses, cleaners, and construction workers.

Vision for India as a global talent hub:

  • India for the World Approach: Complement Make in India with a strategy that sees India as a global talent provider.
  • Developmental impact: Remittances are more impactful than goods exports. A 10% rise in remittances can reduce poverty by 3.5% in low-income nations.
  • Curbing illegal migration: Legal structured migration pathways can reduce reliance on unsafe and exploitative channels. It also enhances India’s global image and addresses developed countries’ concerns about permanent immigration.

Steps to Build India’s Migration Strategy

  • Institutional Framework for Overseas Employment: Strengthen Ministry of External Affairs' migration department. Create state-level migration bodies to verify recruiters, ensure worker welfare, and assist with reintegration. Set up migration support desks in embassies. 
  • Skilling and accreditation aligned to Global standards: Integrate foreign languages and international job skills into curricula. Work towards mutual recognition agreements with major economies. Promote joint certifications with global institutions.
  • Affordable financing mechanisms for migrants: Presently, migration costs are Rs 1-2 lakh for GCC, Rs 5-10 lakh for Europe. India can implement models like the Philippines’ Employer Staffing Agency-Pay model where employers/recruiters bear pre-departure expenses.
  • Government-to-Government (G2G) agreements: Remove visa barriers, enhance integration, and ensure qualification recognition (Philippines’ example of securing G2G deals with 65+ countries).
  • Mobility industry body: Establish an industry body to represent India’s overseas recruitment sector, address fragmentation and lack of regulation and set standards for ethical recruitment.
  • Robust Migrant welfare framework: Based on ILO guidelines to ensure minimum wages and contract standards, timely salary, safe housing, healthcare, legal aid and grievance redressal mechanisms for migrants. 
  • Support for returning migrants: Facilitate reintegration into the domestic economy and tap into skills and global exposure to spur local development.
Steps to Build India’s Migration Strategy

Conclusion:  By nurturing talent mobility, India can convert its youth bulge into a global economic and diplomatic strength, boost remittances and enhance India’s international influence and reputation. 

Labour needs as much focus as the Capital

Context: India is facing a growing challenge in creating formal sector jobs despite a labour-abundant economy. 

Relevance of the Topic: Mains: Amid shift towards capital-intensive production - need to focus on labour skilling and reforms.

Employment Trends in India

  • Job Deficit: Since 2017-18, India's working-age population has increased by 9 crore, however,  formal sector jobs have risen by 6 crore, leaving a deficit of 50 lakh jobs annually. 
  • Rise in Informal and Self-Employment: Most employment growth is from self-employment in rural areas and informal services, affecting both quality and quantity of work.
  • Capital-intensive Production process: Production processes, including traditionally labour-intensive manufacturing and services industries, are becoming more capital-intensive (more investment in technology and equipment) and automated. The advent of Artificial Intelligence will further reduce the need for human labour. 

Why is the capital intensity of production rising in a labour-abundant economy?

1. Demand-Side Factors (Industry & Market-Driven): 

  • Need for Higher Productivity & Cost Efficiency: Businesses adopt capital-intensive technologies to improve productivity and reduce long-term costs. Machines provide greater efficiency, precision, and output per unit of input compared to human labour.
  • Global Competition & Quality Standards: Indian firms competing in global markets must meet high-quality standards, which often necessitate automation and capital-intensive methods.
  • Falling Cost of Capital: With advancements in technology, the cost of machinery and automation has decreased, making capital investment more attractive than hiring and training labour.
  • Economies of Scale: Large-scale production benefits from automation as it reduces per-unit costs, making capital-intensive production more viable. 

2. Supply-Side Factors (Labour Market Issues):

  • Low Availability of Skilled Labour: Less than 10% of India’s workforce has formal vocational training. Many educated individuals lack industry-relevant skills, making them less competitive against machines. 
  • Rigid & Costly Labour Regulations: Stringent labour laws, high compliance costs, and restrictions on hiring and firing discourage firms from hiring more workers, making automation a preferable alternative. 
  • High Labour Costs in the Formal Sector: Though India has an abundant workforce, formal sector wages, social security obligations, and compliance costs increase the effective cost of hiring labour.
  • Uncertainty & Labour Unrest: Frequent labour strikes, job security demands, and union pressures lead industries to prefer mechanisation, which ensures uninterrupted production

Some Government Efforts:  

1. Production linked Incentive Scheme: 

  • The government offers incentives of 4% to 6% on incremental/additional sales. For example, earlier a company was selling goods worth Rs. 1 lakh in a year and now its sales increased to Rs. 1.2 lakh. Then the company will get an incentive of 4% on Rs. 20,000= Rs. 800.
  • Challenges:  
    • The current structure of the PLI scheme is primarily focused on expanding production of high-value products with backward linkages, which require high-skilled, specialised labour, and is relatively less focused on low- and middle-skilled labour-intensive sectors.
    • Over 50% of the PLI budget is allocated for large-scale electronics, IT hardware and drone manufacturing. However, the highest number of jobs under the scheme has been created in the food processing and pharmaceutical industries. 

2. Education-Employment Linked Internship (ELI) scheme:

  • The central government incentivises the private sector to hire more labour while also skilling them, through the ELI and other internship programmes. 
  • Challenge: While this policy does reduce the cost of labour by shifting (the initial) burden on to the government, the period of the subsidy or transfers is short (about two to three years) The scheme does not sufficiently focus on upskilling workers, limiting future employability. 

Way Forward

  • Integrated Policy Framework: Establish coordination between ministries of production, labour, and skilling to align production-linked incentive (PLI) schemes with current and future labor market needs.
  • Graded Incentive Structures: Modify PLI incentives from flat to graded, rewarding firms for certifying and upgrading workers' skills through on-the-job training.
  • Strengthen Skill Ecosystem: Enhance training institutes like ITIs by linking their funding and rewards to employment and earnings outcomes based on projected industry demand.
  • Flexible Labour Regulations: Encourage state governments to adopt flexible labor policies to reduce costs and promote labor-intensive technologies

Hence, there is a need to focus on both the quantity and quality of the workforce by investing in skill development programs that cater to high-value manufacturing sectors. India needs to develop dynamic frameworks that adapt to evolving industrial and technological demands, ensuring alignment with the vision of "Viksit Bharat." 

Guidelines to tackle MGNREGS Job Card Deletions

Context: The Ministry of Rural Development has issued guidelines to tackle the challenge of high rate of deletions of job cards issued to workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Relevance of the Topic: Prelims: Key Facts about MGNREGA.

Mahatma Gandhi National Rural Employment Guarantee Scheme

  • Launched: under the Mahatma Gandhi National Rural Employment Guarantee Act 2005. 
  • Objective: Provides at least 100 days of guaranteed wage employment per financial year to rural households whose adult members volunteer for unskilled manual work.
  • Implementing Authority: Ministry of Rural Development (MoRD)
  • Type of Work Covered: Water conservation, rural connectivity, irrigation, land development, etc. 

Recent Central Govt. guidelines on Job Card Deletions:

  • Gram Sabha Approval: Job cards or workers' deletions should take place only after due verification in the gram sabha, or in the social audit gram sabha, or in a special gram sabha called for the purpose. 
  • Permitted reasons for Job Card Deletion:
    • Permanent migration of the household to urban areas or another Panchayat.
    • Gram Panchayat declared as an urban settlement.
    • Duplicate job card or forged registration.
    • Death of the worker.
    • Household/workers formally requesting deletion in writing.
  • Publication of Deleted Names: Names of deleted workers/job cards must be in the public domain for 30 days to allow objections. The cause of deletion of each job card has to be revealed. Each cause of deletion must be confirmed by the gram sabha.
  • Right to Appeal: Households can appeal against job card cancellations. Gram Sabhas to discuss flagged deletions twice a year.
  • Payment of Dues: No deletion to be carried out before clearing pending wages of workers.

Reason for Issuance of Guidelines

  • High rate of deletions of job cards issued under MGNREGS. Over 10.43 crore workers were deleted in the last four years. The deletions have increased after the Aadhaar-Based Payment System (ABPS) became mandatory in January 2023.

Mass deletions of job cards without proper scrutiny can undermine MGNREGS’s purpose. A balance must be maintained between policy enforcement and ensuring social security for the rural workforce.

India's Labour Market: Key Trends

Context: India’s labour market is witnessing a shift from jobless growth to rising employment across sectors. Various surveys highlight increasing job creation, especially in manufacturing, MSMEs, and rural non-farm employment.

Relevance of the Topic: Prelims: India’s labour market- Trends.

Survey findings on Employment Trends

  • MSME Udyam Portal: Jobs increased from 121 million (2023) to 201.9 million (2024).
  • Annual Survey of Industries (ASI) FY23: Manufacturing employment rose by 7.5% (from 17.2 million in FY21 to 18.4 million in FY23).
  • Periodic Labour Force Survey (PLFS): Manufacturing employment growth increased from 1.15% p.a. (2017/18-19/20) to 5.8% p.a. (2019/20-22/23).
  • RBI KLEMS Database: 46.7 million jobs were created in FY24, more than double the 19.1 million in FY23.

Women's Labour Force Participation Rate

  • Rural Job Diversification and Women's LFPR: 
    • Increasing shift of males to rural non-farm employment (RNFE) has led to higher women’s labour force participation rate (LFPR).
    • PLFS 2023-24: 
      • 59.8% of rural workers are in agriculture, with the rest in RNFE.
      • The share of male workers in agriculture fell to 49.4% and that of females rose to 76.9%.
    • Study in Eastern UP (2006-2023):
      • Agricultural income growth: 0.1% p.a.
      • RNFE (including remittances) growth: 7.3% p.a.
      • Agriculture’s share in household income: fell from 22% to 8%.
    • Rural manufacturing employment grew at 4%, exceeding urban manufacturing growth of 3.8%.
  • Urban women’s LFPR is rising due to higher incomes, availability of household help, and reduced household constraints. 

Wage growth and Income patterns

  • PLFS 2023-24:
    • The self-employed had the highest wage growth (9.6%).
    • Casual workers saw 7.4% growth, with a daily wage of ₹433.
    • Regular wage earners had a lower wage growth of 5.5% (₹21,103 monthly).
  • ICRIER Analysis of PLFS Data:
    • Since 2019, urban nominal wages grew at 6% p.a., while real wages rose by only 0.5% p.a.
    • Real wages remain largely constant due to labour absorption trends.
    • Higher real wage growth without productivity rise could lead to inflationary pressures.
  • Lessons from previous wage growth:
    • 2010-2013: Real wage growth in rural areas peaked at 7% due to high post-GFC fiscal deficits and food inflation.
    • Post-2013: Real wages stabilized due to financial tightening and economic corrections.
    • Wage growth must align with productivity to remain sustainable.
  • Real Private Final Consumption Expenditure (PFCE):
    • Fell after the pandemic but recovered to 7% growth in FY25.
    • A slight dip to 6% in Q2 was cyclical and expected to reverse with financial easing.
    • Sustaining consumption requires continued income growth and employment generation.

Economic growth and Job creation: 

  • Growth averaged 8.3% (2021-24), providing stability for job creation. Earlier periods of jobless growth were marked by economic volatility.
  • Labour Market Trends (FY25):
    • Q2 FY25 saw GDP growth dip to 5.4% and unemployment rise to 6.6%.
    • Q3 FY25: Government capital expenditure revival led to UR falling to 6.4%.

Youth Unemployment: 

  • High youth unemployment often results from aspirational job-seeking. Above 35 years, unemployment declines as job-seekers settle for available opportunities.
  • Government jobs remain highly sought after due to higher entry-level pay, job security, and lesser workload.
  • If government jobs shift to contract-based hiring, youth unemployment may decrease significantly.

Corporate Investment and Productivity: 

  • The post-reform period saw rising labour productivity benefiting corporate margins more than wages.
  • Policy tools needed:
    • Incentives (Carrots): Encouraging investment and job creation.
    • Regulations (Sticks): Ensuring wage growth aligns with productivity.
  • External shocks create uncertainty, affecting business expansion.
  • India’s post-pandemic policies have helped sustain growth despite global volatility.

Policy recommendations for Job sustainability

  • Skilling and Training: Enhancing workforce capabilities for higher productivity.
  • Job-specific training: Ensuring alignment with industry demands.
  • Labour market flexibility: Balancing worker security with employer needs.
  • Macroeconomic stability: Maintaining steady growth to encourage hiring.
  • Continued policy support: Implementing countercyclical policies to absorb global shocks.

Restructuring Skill India Programme

Context: The Union Cabinet has restructured the Central Sector Scheme ‘Skill India Programme’ till 2026 with an overlay outlay of Rs.8,800 crore from the period 2022-23 to 2025-26. This initiative aims to develop a future-ready workforce by integrating demand-driven, technology-enabled, and industry-aligned training across India.

Relevance of the Topic:Prelims: Key facts about the Restructured Skill India Programme. 

Restructured Skill India Programme

  • Nodal Ministry: Ministry of Skill Development and Entrepreneurship
  • The programme consolidates three flagship schemes:
    • Pradhan Mantri Kaushal Vikas Yojana 4.0 (PMKVY 4.0)
    • Pradhan Mantri National Apprenticeship Promotion Scheme (PM-NAPS)
    • Jan Shikshan Sansthan (JSS) Scheme
  • Under the three flagships schemes, there are more than 2.27 crore beneficiaries till date.
  • Aim:
    • To build a skilled future-ready workforce
    • To integrate demand-driven, technology-enabled, and industry-aligned training 
    • To provide structured skill development, on-the-job training, and community-based learning.
    • To ensure that both urban and rural populations, including marginalized communities, have access to high-quality vocational education.

1. Pradhan Mantri Kaushal Vikas Yojana 4.0 (PMKVY 4.0)

  • Provides NSQF-aligned skill training through:
    • Short-Term Training (STT)
    • Special Projects (SP)
    • Recognition of Prior Learning (RPL)
  • Target beneficiary: Age group of 15-59 years.
  • Key Features:
    • Integration of On-the-Job Training (OJT) within skilling programs.
    • Introduction of 400+ new courses in AI, 5G, Cybersecurity, Green Hydrogen, and Drone Technology.
    • Establishment of Skill Hubs in premier institutions like IITs, NITs, JNVs, and Kendriya Vidyalayas. International mobility focus through Mobility Partnership Agreements (MMPAs).
    • Blended learning approach incorporating digital training. Training material translated into eight regional languages.
    • Inter-ministerial convergence with PM Vishwakarma, PM Surya Ghar, and the National Green Hydrogen Mission.
    • Ease of Doing Business approach to streamline participation.

2. PM National Apprenticeship Promotion Scheme (PM-NAPS)

  • Objective: Encourage industry-led skill development through apprenticeships.
  • Target Group: 14-35 years.
  • Key Features:
    • Focus on the earn-while-you-learn model.
    • Align skilling initiatives with futuristic job markets and industry trends.
    • 25% stipend support (up to Rs. 1,500 per month per apprentice) via Direct Benefit Transfer, provided by the Central Government.
    • Coverage: AI, robotics, blockchain, green energy, and Industry 4.0.
    • Special focus on MSMEs and underserved areas such as Aspirational districts and North-East Region.

3. Jan Shikshan Sansthan (JSS) scheme

  • Objective: Community-based skilling for disadvantaged groups.
  • Target Group: 15-45 years, especially women, rural youth, and economically weaker sections.
  • Key Features:
    • Low-cost, doorstep training for self-employment and wage-based livelihoods.
    • Creating awareness on health, hygiene, gender equality, and education within communities to promote inclusive skilling.
    • Linked with PM JANMAN, ULLAS, and financial literacy programs.
    • Certification integrated with National Skills Qualification Framework (NSQF), DigiLocker, and National Credit Framework (NCrF).
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Significance of Skill India Programme: 

  • Enhancing Employability: Aligning training with national and global industry standards.
  • Economic Growth: Strengthening workforce development to boost productivity.
  • Technology Integration: Preparing the youth for futuristic technologies.
  • Global Competitiveness: Promoting international mobility and globally recognised certifications.
  • Entrepreneurship and Self-Reliance: Encouraging skill-based startups and self-employment opportunities.
  • Social Inclusion: Ensuring access to skill development for rural and marginalized communities.

The continuation of the Skill India Programme reinforces the importance of continuous upskilling and reskilling. The initiative will directly contribute to Periodic Labour Force Survey (PLFS) data, ensuring that workforce development policies remain aligned with economic and industrial trends.

Labour Welfare in India

Context: Lack of implementation of Labour Codes and Inefficiencies with the current legislative frameworks for labour welfare, calls for attention into the falling state of labour conditions in India.

Relevance of the Topic: Mains: Labour Welfare: Framework and challenges.

What is Labour Welfare?

  • Definition: In India, labour welfare refers to various measures undertaken by both the government and employers to improve the working conditions, well-being, and overall quality of life of workers and industrial workers.
  • Objective:
    • To address the social, economic, and health needs of workers and their families.
    • To ensure a better standard of living for the workforce.
  • What does it include? 
    • Provisions for safe working environments
    • Reasonable working hours
    • Fair wages
    • Access to healthcare
    • Housing facilities
    • Education for workers’ children
    • Social security benefits

Framework Regarding Labour in India

  • Constitutional Framework:
    • Labour is a subject in the Concurrent List. Thus, both Central and State governments are competent to enact legislation.
  • Judicial Interpretation: 
    • The Supreme Court emphasised “the principle of ‘Equal pay for Equal work’, to be achieved through Article 14, 16 and 39 (c) of Indian Constitution.” (Randhir Singh vs Union of India).
  • Legislative Framework: India has enacted four labour codes to consolidate 29 outdated laws to simplify and modernise existing labour laws and improve working conditions of labour. They include-
    • Code of Wages, 2019
    • Industrial Relations Code, 2020
    • Social Security Code, 2020
    • Occupational Safety, Health and Working Conditions Code, 2020.
  • Expansion of Social Security Net: 
    • The Code on Social Security, 2020 aims to widen the scope of social security schemes to include unorganised workers, gig workers and platform workers. 

Benefits of Labour Codes

  • Simplification of the Complex laws: Consolidate 29 Central laws, thus reducing multiplicity of definition and authority for businesses.
  • Easier Dispute Resolution: The codes simplify archaic labour laws and revamp adjudication processes, which will lead to quicker dispute resolution. 
  • Gender Parity:
    • All sectors must allow women to work at night.
    • Employers must ensure that security arrangements are made for them.
    • Women must consent before working at night.
  • Ease of Doing Business: These reforms will boost investment and make doing business easier.

Issues associated with Labour Welfare

  • Labour codes are not operational:
    • Implementation of labour codes has been delayed repeatedly due to state-level compliance issues and stakeholder resistance, with no clear indication when they will be operational.
    • The primary challenge is the shared jurisdiction over labour laws between India’s central and state governments.
      • The central government has passed the codes, but the state governments are responsible for drafting and notifying their own rules under each code, before they can be fully implemented. 
      • This duality has led to significant inconsistencies, and states are yet to finalise their rules under these codes.
  • Poor Implementation of Building and Other Construction Workers Act:
    • Many State governments have not reconstituted the welfare boards or implemented the BOCW Act effectively.
    • As per the recent CAG report, the welfare boards have not yet used the cess worth ₹70,744.16 crore, collected from the employers for the welfare of the workers, under the BOCW Act. 
    • Benefits like free temporary accommodation, drinking water and sanitation facilities to workers, remain unfulfilled. 
  • Concerns with Labour Codes:
    • Code on Social Security has provisions for self-assessment of cess by the employer, concerning contributions meant for workers’ welfare. This has the risk of underreporting by the employers, in the absence of any external regulatory check, and thus, could evade employer accountability. The Code also reduced the rate of cess and interest.
    • The statutory entitlements to workers under the BOCW Act are now subject to prescription by the Union government, under the new code. This means that there is no right to workers to these facilities, if not prescribed. 
  • No Recognition for Invisible Labour: 
    • Childcare, household work, looking after elderly are some examples of unpaid work and constitute invisible labour. They go unnoticed, unrecognised and are thus unregulated. The labour codes are silent about invisible labour. 

Read More: Analysis of Labour Codes 

Way Forward

  • Vocational Training: Establish accrediting agencies & vocational training institutes to provide skill-based training to the labour workforce.
  • Social Security: State governments should codify laws for implementation of the new labour codes and the welfare of unorganised workers.
  • Create centralised employment platforms to register workers, and connect workers with potential employers, to match the demand-supply gap. 

Along with these, it is also essential that we adopt a futuristic approach when it comes to protecting workers and handling disputes regarding Automation and Robotics, AI-powered workforces, and bioengineering, which may hamper workers' rights in the future.

The H-1B Visa Debate 

Context: With Donald Trump becoming President of the USA, there are rumors that the US administration is going to limit the H-1B visa program. In this context, let us understand the merits of this program and the issues arising in recent times.

Relevance of the Topic:Prelims: Key facts about H1B visa. 

About H-1B Visa Program

  • The H-1B is a temporary (non-immigrant) visa category in the US that allows employers to hire highly educated foreign professionals to work in specialty occupations requiring at least a bachelor’s degree or the equivalent. 
  • Jobs in fields such as mathematics, engineering, technology, and medical sciences often qualify. 
  • The initial duration of an H-1B visa is three years, which may be extended for another three years (maximum of 6 years). 
  • Due to high demand, an annual cap of 65,000 regular visas is put in place, a computerised lottery selects the applicants.

Merits of the H-1B visa program

  • Talent utilisation: The program provides an opportunity for skilled workers to contribute to advanced sectors like IT, engineering, and other specialised fields in the U.S.
  • Economic contributions: H-1B visa holders add significant value to the U.S. businesses through their expertise, helping companies maintain technological control and competitiveness globally.
  • Addresses labour shortages: It helps address labor shortages in specialised fields by filling gaps that U.S. workers cannot meet, ensuring the smooth functioning of industries that rely on highly skilled labor.
  • Mutual benefits for workers and firms: Workers gain exposure to advanced environments and career growth opportunities, while companies benefit from their technical skills and innovation.
  • Global talent integration: By attracting global talent, the H-1B program enriches the workforce with diverse perspectives and ideas, fostering innovation and collaboration.
  • Educational and professional integration: Many H-1B visa holders are alumni of U.S. universities, and the program helps retain this talent, which has already been trained within the U.S. education system.
  • Bringing the skill back home: E.g., Several CEOs have previously worked in the US and brought their knowledge and skills back to India.

Demerits of the H-1B visa program:

  • Corporate control over workers: H-1B workers are tied to their sponsoring employers, creating dependency. This dependency allows companies to exploit workers by paying them lower wages and imposing strict conditions.
  • Lower wage standards:
    • The program legally permits companies to pay H-1B workers less than the prevailing wages for their roles, undercutting both migrant and local workers. 
    • By relying on H-1B workers as a cheaper labor pool, corporations avoid paying competitive wages to American workers, creating downward pressure on overall wage levels.
  • Fear of job loss and deportation: H-1B workers face the constant threat of losing their visa status if they lose their job. This makes them more vulnerable to accepting poor working conditions and exploitation.
  • Underemployment through loopholes: Companies often misuse the system by creating job classifications that allow them to skirt wage norms or hire workers for roles beneath their qualifications.
  • ‘Best and brightest’ myth: Critics have argued that the program is not designed to attract the best talent but rather to serve as a low-cost labour source for corporations. This undermines the original intent of the program.
  • Body shops and exploitation networks: Many H-1B workers are recruited by intermediaries or "body shops" that profit from their placement. These entities take advantage of workers by charging illegal fees, arranging fake resumes, and providing subpar job conditions.

Conclusion: Although there are systemic issues within the H-1B program that compromises the well-being of both migrant and local workers, any policy in this regard must take into account the human costs associated with the immigration policy and advocate for a stable and predictable immigration policy.

QS World Future Skills Index 2025

Context: Recently released QS World Future Skills Index 2025 highlights India’s strong position as a forward-thinking nation with significant potential. However, challenges in its current economic and academic systems could slow progress.

Relevance of the Topic: Prelims: QS World Future Skills Index 2025

QS World Future Skills Index

  • QS World Future Skills Index evaluates how well countries are equipped to meet the evolving demands of the international job market. 
  • Aim: To empower governments to align education and skills with future demand, fostering innovation, sustainable global competition and talent development.
  • Released by: London-based Quacquarelli Symonds (QS).

Key criteria in the QS Future Skills Index:

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India Spotlight on QS World Future Skills Index

  • India’s overall rank: 25th 
    • India’s overall ranking puts it as a future skills contender.
    • Comparison: Countries like US, UK, Germany, Australia, Canada and others in top 10 have been categorised as ‘future skills pioneers’.
  • Skills Fit:
    • India’s rank: 37th 
    • In this indicator, India scored 59.1, which is the worst among the top 30 countries overall.
  • Academic Readiness:
    • India’s rank: 26th
  • Future of Work:
    • India’s rank: 2nd only behind the US.
    • This indicator measures how well the job market is prepared to meet the growing demand for digital, AI, and green skills.
    • The assessment of this indicator has been largely done from the demand side. i.e., job postings. On supply side indicators, India’s ranking leaves much to be desired. 
  • Economic Transformation:
    • India’s rank: 40th 
    • India scored a full score of 100 on account of economic capacity.  
    • India fared the worst when it came to ‘future-oriented innovation in sustainability’. 
      • India’s score: 15.6/100
      • Comparison: G7 countries- 68.3, EU countries- 59, APAC countries- 44.7, African countries: 25.4.
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Challenges for future skills in India

  • Poor performance in Green Readiness:
    • Green readiness is an area of relative underperformance for the Indian economy versus G20 peers.
    • Whilst rising demand for green occupations and green skilled workers is clear through India's strong Future of Work score, India places 176 in the Environmental Performance Index.
  • Inadequate investment and innovation: 
    • Gaps in investment and innovation capacity pose challenges that could slow long-term growth.
  • Lack of relevant skills: 
    • India’s graduates are struggling to keep up with the pace of change in relevant skills required. 
    • India has a particularly large skills gap in ‘entrepreneurial and innovative mindset’.
  • Need for higher education reforms: 
    • Employers across India highlighted a critical gap in the workforce’s ability to meet the demands of a rapidly changing economic landscape. 
    • This highlights a broader challenge for India’s higher education system which is struggling to keep pace with evolving employer needs.

Way Forward: Tapping the potential of Future Skills in India

  • Invest in green skills development: Address green skill gaps by aligning curricula and learning modes to nurture the green skills necessary.
  • Higher education reforms: Universities must prioritise embedding creativity, problem solving and entrepreneurial thinking into their curricula.
  • Collaboration and Coordination:  Industries must foster stronger collaborations with universities to better align education with workforce demands. 
  • Government policy intervention:  Focused strategies are required to re-engage workers in continuous and lifelong reskilling programs. This ensures that skilled workers remain relevant and productivity contributors.  

To fully realise its potential, India must align economic momentum with robust higher education reforms and skills development, ensuring a dynamic and competitive position in the global economy. 

Startup Sector in India

Context: India’s startup ecosystem has grown exponentially, emerging as the world’s third-largest hub for innovation and entrepreneurship. From just 400 startups in 2015-16 to over 1,30,000 today, the ecosystem is a testament to India’s entrepreneurial potential and supportive policies.

Relevance of the Topic: Mains: Startup sector- Present status, Challenges, Issues, Strategies

Present Status of Startup sector in India

  • Global position: India is the world’s third-largest hub for innovation and entrepreneurship.
  • Remarkable progress: Today, India has over 1,30,000 recognised startups- up from approximately 400 in 2015-16.
  • Successful funding and ecosystem expansion: 
    • Startup funding has grown 15 times.
    • The number of investors has increased nine-fold.
    • The number of incubators has risen seven-fold.

Scope for further growth of Startup Sector

  • Emerging areas: India stands at the threshold of a technological revolution, presenting immense opportunities in areas such as
    • Artificial intelligence (AI)
    • machine learning (ML)
    • big data
    • electric vehicles (EVs)
    • quantum computing
    • genomics
    • 3D printing
    • Robotics
    • Drones
    • space exploration.

Government Initiatives to promote Startups in India

  • Fostering growth in Emerging areas:
    • National Quantum Mission
    • India AI Mission
    • Semiconductor Mission
  • Promoting Research & Development: 
    • Union Budget 2024-25 allocated a substantial Rs. 1 lakh crore to the Anusandhan National Research Fund for research and development (R&D).
  • Progressive policies:
    • Opening up new sectors to the private players like space, geospatial technology, defence, and drones. Encouraging startups to venture into cutting-edge domains.
  • Facilitating Funding:
    • Fund of Funds for Startups (FFS): launched in 2016, it has committed Rs 11,688 crore through 151 Alternative Investment Fundas (AIF).
    • This has catalysed a capital pool of Rs 81,000 crore, creating a multiplier effect.
  • Minimal regulatory interference:
    • Startup India prioritised avoiding excessive regulations that could hinder startups.

Challenges and Concerns in Startup sector

  • Funding Issues:
    • Lack of long-term investments: Indian startups, particularly in deep tech sectors, face challenges in accessing long-term capital. 
    • Inadequate domestic funding: Although Indian startups raised over $12 billion in 2024, about 75% of this funding came from international sources.
  • Corporate mismanagement:
    • Recent incidents of corporate mismanagement and governance issues in startups such as Byju’s, Dunzo, and BharatPe have raised concerns.
  • Inadequate Innovations and IP Development:
    • India produces approximately 24,000 PhD graduates annually, yet lags behind in Intellectual Property (IP) earnings. 
    • India paid $14.3 billion in IPR royalties in 2024, while earning only $1.5 billion. This highlights a significant gap in innovation.

Strategies needed to tap into potential of Startups

  • Collaboration: 
    • Coordinating and collaborating among policymakers, entrepreneurs, and educational institutions.
    • Collaboration between academia and industry to ensure that educational programmes align with market needs.
  • Funding: 
    • Creating a specialised fund of funds for deep tech startups that require long-term investments.
    • Increasing domestic capital sources: Large domestic institutions like insurance companies and pension funds can allocate a portion of their surpluses to support startups. 
  • Management:
    • Startups must adopt self-regulation frameworks that emphasise accountability, transparency, and ethical conduct. This involves strong mentorship, professional boards, and sound financial management. 
  • Skilling, Reskilling and Upskilling:
    • Leverage India’s premier educational institutions (IITs, IIMs, and IIIT) to address skill shortages in product development, data science, and AI-ML. 
    • Programmes for internships, apprenticeships, and recruitment can attract talent to startups and bridge existing skill gaps.
  • Balancing risks with regulation:
    • Regulatory framework must balance innovation with oversight, enabling startups to thrive while mitigating risks associated with unregulated growth. 
  • Boosting innovations:
    • Creating a vibrant ideas ecosystem that rewards and protects intellectual property.
  • Supporting new regional hubs:
    • Nearly 50% of India’s startups originate from Tier II and Tier III cities. Emerging hubs like Indore, Jaipur, and Ahmedabad offer immense potential. 
    • Supporting these regional hubs with infrastructure, educational opportunities, and inclusivity (increasing women’s representation in leadership roles).

As India works towards its vision of Viksit Bharat by 2047, startups will play a pivotal role in driving economic growth, creating jobs, and positioning the country as a leader in innovation. 

Trends of Women’s Workforce Participation in India

Context: The National Sample Survey Office’s (NSSO) most recent annual report of Periodic Labour Force Survey indicates an increase in aggregate employment rates, after a prolonged period of decline since 2011-12. 

This is dominantly due to a significant rise in women’s work force participation. However, this spurt in women’s workforce participation must be interpreted with great caution.

Relevance of the Topic: Mains: Women’s workforce participation- Trends, Concerns, etc.

Analysis of Women’s Workforce Participation

  • Dramatic rise in women’s workforce participation:
    • Men’s work participation rates have risen slightly from 71.2% in 2017-18 to 76.1% in 2023-24. 
    • However, for women, it rose from 22% in 2017-18, to reach 40.3% in 2023-24. 
image 59
  • Rural females vs. Urban females:
    • Women’s workforce participation increased in both rural and urban areas
    • The increase was particularly sharp in rural India. 
image 60
  • Persistence of Jobless Growth:
    • NSSO includes ‘unpaid helpers in family enterprises’ in its classification of workers.
    • It is in this category where most of the increase in women’s “employment” occurs.
    • This indicates that the benefits of GDP growth have not translated into higher employment, hence persisting jobless growth.

Concerns with Data Classification

  • ILO’s definitions of work and employment make it clear that employment is ONLY that subset of work for which remuneration is received. 
  • Since “unpaid helpers” are clearly not the primary workers who would receive remuneration, they should not really be classified as “employed” at all.
  • Further, NSSO classifies those engaged in Codes 92 and 93 as “not in the labour force”, so they are excluded from the employment data.
    • Codes 92 and 93 include the activity classifications that cover unpaid work done within households.
    • Code 92: engaged in domestic duties — essentially care work within the household.
    • Code 93: domestic duties plus extended SNA activities like fetching fuelwood, fetching water, engaging in kitchen gardening and livestock and poultry rearing, etc.

Work Profile of Rural Women

  • By 2023-24, there was a dramatic decline in unpaid workers (Codes 92 and 93) to half of the 2017-18 level.
  • Significant increase in self-employment, which amounted to 95% of the increase in recorded “employment”.
    • So, the decline in the proportion of unpaid women workers is almost completely explained by the increase in self-employment.
  • The share of both regular and casual workers barely increased at all (together they account for less than 1/10th of rural women).
image 61

Work Profile of Urban Women

  • 8 percentage point increase in women’s recorded work participation and a 6 percentage point decrease in unpaid workers. 
  • The increase in women’s recorded employment was split equally between regular workers and self-employed women. 
  • There was a decline in the proportion of both casual workers and unpaid helpers in family enterprises.
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Changes in Real Wages

  • Real wages for women regular workers fell in both rural and urban areas
    • This suggests that much of this was distress employment. 
    • This could well have been in domestic work and similar occupations (significant sources of employment in urban India for poor women). 
  • However, the decline in real incomes from self-employment for women was even greater.
    • This indicates a crowding of more women workers into relatively limited types of activities.
image 62

Gender Gap in Earnings

  • The gender gap in earnings grew significantly over this period, particularly in rural areas.
  • The gap is shockingly high for self-employed workers.
    • Women receive only around 1/3rd of the incomes from self-employment that their male counterparts earn.
image 63

Overall, this is hardly a picture of dynamism in labour markets that is leading to more employment of women.  It is necessary to move beyond that fairy tale to address the reality of women’s work in India.

India Skills Report 2025 

Context: Kerala continues to shine as one of the most employable States in India, as indicated by the recently launched India Skills Report 2025.

Relevance of the Topic: Prelims- Key facts about India Skills Report and their findings.

Key Findings of India Skills Report 2025:

image 54
  • India’s National Employability stands at 54.8% indicating a significant pool of talent scoring above 60% on the Wheebox Global Employability Test (GET) with Maharashtra leading with 84% employability followed by Delhi (78%), Karnataka (75%), Andhra Pradesh (72%), Kerala (71%) and Uttar Pradesh (70%).
  • Male employability is slightly higher (53.47%) than female (46.53%) with Andhra Pradesh, Karnataka, Maharashtra, and Uttar Pradesh emerging as top states with male employable resources while Rajasthan leads in female employability followed by Gujarat and Kerala.
  • Kerala is one of the top States favoured for employment, alongside Tamil Nadu, Maharashtra, and Uttar Pradesh.
  • 93.22% of users expressed strong interest in internships with Tamil Nadu showing the highest preference for internships, followed by Uttar Pradesh, Kerala, and Karnataka. 
  • The report highlights that over half of Indian graduates are now employable, a significant rise from 33% a decade ago.
    • This 17% increase over ten years underscores India's dedication to developing a future-ready workforce equipped to meet the demands of a rapidly changing global economy.
    • This transformation is further driven by India's emphasis on emerging technologies such as artificial intelligence (AI), cloud computing, and automation, which are redefining traditional job roles and generating new opportunities.

Key Facts about India Skills Report:

  • Published by: Wheebox in association with the All India Council for Technical Education, Confederation of Indian Industry and Association of Indian Universities.
  • It is the culmination of an exhaustive evaluation of candidates who participated in the Global Employability Test (GET) conducted across India. 
  • This comprehensive assessment is designed to benchmark employability skills against global standards, and provides deep insights into the readiness of India's talent pool for emerging job markets. 
  • Significance: 
    • By evaluating candidates across diverse domains, the report captures critical trends in skills demand, sectoral employability, and regional talent distribution. 
    • This will serve as a vital resource for policymakers, academia, and industries.