ANALYSIS Government could easily add 35 million more to the workforce by 2027

Formal job market has been tilting towards youth; 35 million jobs target within two years not a tall ask

The government’s target of adding 35 million people to the workforce over two years through its newly approved Employment Linked Incentive (ELI) scheme may not be overly ambitious, as nearly 30 million individuals below the age of 25 joined formal employment over the past two years.

A Moneycontrol analysis of the data from social security schemes shows that 14.7 million people below the age of 25 entered the formal workforce in 2024–25, compared with 14.3 million in 2023–24.

The ELI scheme, announced in the FY25 Union Budget with an outlay of ₹1 lakh crore, aims to incentivise industries to generate 35 million jobs over a two-year period. Of these, 19.2 million jobs are expected to go to first-time entrants.

Hiring momentum has been stronger in the Employees’ Provident Fund (EPF) scheme, which typically represents higher-paying employment, than in the Employees' State Insurance Corporation (ESIC) scheme. EPF registrations grew 5.1 percent in 2024–25, compared with a 2.3 percent rise in ESIC enrolments.

Youth Dominate Hiring

Post-pandemic trends show a growing preference for young workers in the formal sector. The share of individuals below 25 years of age in the formal workforce rose to a record 52.4 percent in FY25, up from 51.5 percent in the previous year and 47.7 percent eight years ago.

The surge has been particularly strong among those aged below 21, who are most likely first-time job entrants. In 2024–25, this group accounted for over half of all jobs secured by youth, compared with 40 percent eight years ago. FY25 also marked the first time that those under 21 held a majority share of youth employment.