Economic Survey 2024-25 Highlights Urgent Need for Skill Development Amid Growing Salary Gaps

The Economic Survey of 2024-25, released by the Government of India today, has spotlighted a concerning disparity in the salary distribution across India's workforce, primarily driven by differences in education and skill levels. According to the survey, a significant portion of the workforce remains underpaid due to a lack of vocational training and relevant skills.
The findings of the survey reveal that while 4.2% of the workforce with advanced education and specialized skills earn between ₹4 lakh and ₹8 lakh annually, nearly 46% of workers—predominantly low to semi-skilled laborers such as agricultural workers, clerical staff, and factory workers—earn less than ₹1 lakh annually. This stark contrast underscores the urgent need for upskilling initiatives to equip the workforce with the skills required for higher-paying, specialized jobs.
The survey also highlights a major issue in India's workforce: 65.3% of the total workforce has received no form of vocational training, which severely limits their ability to move beyond low-skilled roles. Technical and Vocational Education and Training (TVET), which provides targeted skill development for specific industries, remains underutilized despite its importance. The mismatch between academic qualifications and job market demands is a critical challenge, with over 53% of graduates and 36% of postgraduates being underemployed in roles that do not match their educational backgrounds.
Furthermore, while the report shows some progress in upskilling initiatives, particularly among youth, with 4.9% of those aged 15-29 receiving formal vocational or technical training and 21.2% receiving informal training, much remains to be done. The increase in the proportion of skilled workers across rural, urban, and gender classifications from 2018-19 to 2023-24 is a positive sign, but the overall pace of improvement is slow.
The report emphasizes that technological advancements—such as automation, AI, and digitalisation—are rapidly transforming industries and creating new job opportunities. However, these technological shifts also require a workforce that is equipped with new and emerging skill sets, making it essential for India to adopt a dynamic and forward-looking approach to skill development.
As the gap between low and high-income earners continues to widen, addressing the skill deficit in the workforce is crucial for fostering inclusive growth and ensuring that India's labor force can meet the demands of an increasingly digital economy. The survey's findings stress the importance of scaling up vocational training and education reforms to equip millions of workers with the skills they need for higher-paying, sustainable jobs.