(Oct 22): India’s Finance Minister Nirmala Sitharaman said the nation faces a significant challenge skilling its vast young workforce to meet the requirements of the job market.

“The biggest challenge that we had is the employability level or the skill set which is so required,” Sitharaman said at an event hosted by The Economic Club of New York on Monday. Businesses often feel that graduate students don’t have the appropriate skills for the job at hand, she said. “For being employed, they need something more and it is that gap that the government of India is trying to now fill,” she added.

Sitharaman highlighted a problem that economists have often warned as a long-term threat to India’s economic growth, currently the fastest among major economies. While India’s young population — more than half of its 1.4 billion people are below the age of 30 — is seen as a driver of growth, poor schooling means the economy won’t benefit fully from that demographic dividend. An International Labour Organization report shows educated youth in India are nine times more likely to be unemployed than for those who can’t read or write.

Sitharaman said upgrading industrial training institutes and equipping youth with skills in emerging technologies like artificial intelligence will help bridge the skills gap.

Joblessness, especially among young people, emerged as a key concern for voters in India’s election this year, contributing to Prime Minister Narendra Modi’s worse-than-expected showing at the polls. Sitharaman pledged in her post-election budget to spend US$24 billion (RM103.84 billion) over five years to boost skills and train two million people.

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