India’s employment patterns have shifted significantly over the past decade. According to RBI-KLEMS data, the period between 2004 and 2014 witnessed the creation of only 2.9 crore jobs. In the ten years since, more than 17 crore jobs have been generated, marking one of the most rapid expansions in recent history. Formalisation has also grown steadily—EPFO data indicates nearly eight crore formal jobs were added in the last seven years alone.

Social security coverage has expanded at an unprecedented rate. In 2015, only 19% of Indians were covered by at least one social protection scheme. By 2025, that figure has surged to 64.3%, reaching 94 crore people and positioning India as the second-largest social security system in the world. The International Labour Organization (ILO) has recognised this expansion as among the fastest globally.

These trends, however, must now adapt to newer challenges: automation, artificial intelligence, and shifting global supply chains. With 65% of India’s population under 35 years of age, the focus has turned to converting demographic potential into sustainable economic strength.

The new scheme: Scale and scope

Against this backdrop, the government introduced the Pradhan Mantri Viksit Bharat Rozgar Yojana, a ₹1 lakh crore initiative aimed at directly addressing youth employability and enterprise competitiveness.

The scheme is designed to create over 3.5 crore jobs, of which two crore are earmarked for first-time entrants into the workforce. It represents one of the most ambitious employment interventions in India’s history, both in financial outlay and scope of coverage.

The scheme was first proposed in the Union Budget 2024–25 and later highlighted by the Prime Minister during his Independence Day speech.

Dual pillars: Employees and employers

The programme rests on two primary components:

1. Incentives for First-Time Employees (Part A):

New workers will receive up to ₹15,000 in two instalments, providing initial financial support as they transition into formal employment.

2. Support for Employers (Part B):

Businesses hiring new employees will be eligible for incentives of up to ₹3,000 per hire per month. This measure is aimed at reducing hiring costs, particularly for smaller enterprises that often face financial constraints.

Both sets of benefits will be delivered through Direct Benefit Transfer (DBT), ensuring transparency and reducing the possibility of delays or leakages. The scheme also integrates new employees into the social security system from the first day of employment.

Special focus has been placed on the manufacturing sector, reflecting the government’s ambition to boost domestic production and advance the goal of an Atmanirbhar Bharat (self-reliant India).

Towards formalisation and security

Beyond immediate job creation, the scheme carries a long-term vision: nudging India’s workforce further into the formal economy. By mandating social security coverage from day one, it extends protection to millions of workers who might otherwise remain in informal, unprotected employment.

This approach also strengthens the link between workers and employers, creating a structured framework for financial literacy, workplace protections, and long-term career growth.

Complementing broader economic initiatives

The Pradhan Mantri Viksit Bharat Rozgar Yojana has been structured to complement existing national programmes such as:

• Production Linked Incentive (PLI) scheme

• National Manufacturing Mission

• Make in India initiative

Together, these efforts aim to position India as a global manufacturing hub while ensuring that the workforce gains equitable opportunities in a rapidly evolving job market.

Building an employment ecosystem

Policy analysts note that the scheme reflects a shift from isolated interventions toward building a comprehensive employment ecosystem. By incentivising both employers and employees, it distributes responsibility for job creation while addressing systemic challenges in youth employability.

The design also reflects global trends. With developed economies grappling with ageing populations, India’s youthful workforce offers a demographic advantage. However, experts caution that this dividend can only be realised if backed by skills training, robust job opportunities, and reliable social security.

The Pradhan Mantri Viksit Bharat Rozgar Yojana is being closely watched for its ability to balance immediate employment needs with long-term structural goals. While the target of creating 3.5 crore jobs is ambitious, success will depend on efficient implementation, strong industry participation, and continuous monitoring of outcomes.

The scheme also raises broader questions about the future of work in India. As automation and artificial intelligence reshape industries, employment policies will need to evolve continuously. Ensuring that new jobs are not only created but are also meaningful, secure, and sustainable remains a central challenge.

Conclusion

Employment remains a cornerstone of dignity, equality, and national progress. With its dual focus on first-time workers and employers, the Pradhan Mantri Viksit Bharat Rozgar Yojana seeks to lay a foundation for an inclusive, secure, and future-ready workforce.

As India looks toward its long-term goal of becoming a developed economy by 2047, the scheme represents a critical step in aligning youth aspirations with national growth. Whether it can fully harness the potential of India’s Yuva Shakti will be determined in the years ahead.

(The author is Union Minister of Labour & Employment and Youth Affairs & Sports, Government of India)