Employment generation picked up during 2009-10 to 2011-12, as 13.9 million people were added to the workforce, according to the Economic Survey 2014-15.
The pick-up in employment generation, however, did not keep pace with the increase in labour force, wherein 14.9 million people were added to the labour force.
Moreover, the results of the latest quarterly summary on employment, shows that job creation increased by 182,000 during the quarter ended June 2014 over the quarter ended March 2014.
According to the survey, a major impediment to the pace of quality employment generation in India is the small share of manufacturing in total employment.
However, data from the 66th National Sample Survey round indicates a revival in employment growth in manufacturing from 11 per cent in 2009-10 to 12.6 per cent in 2011-12.
"Promoting growth of micro, small, and medium enterprises (MSME) is critical from this perspective", the survey said.
Meanwhile, the services' share in employment at 28.5 per cent in 2011-12 is higher than in industry at 24.4 per cent.
"The main issue to address then is not just providing employment but increasing the employability of the labour force in India", the survey said.
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As per the Labour Bureau Report 2014, the current size of India's formally skilled workforce is just around 2 per cent, whereas even smaller countries like South Korea and Japan report figures as high as 96 and 80 per cent respectively.
The slow pace of quality employment generation assumes significance as by the year 2020, India is projected to be the youngest nation in the world in terms of size.
While this youth bulge provides great opportunities, it also poses challenges, the survey said adding that these young people need to be healthy, suitably educated, and appropriately skilled to contribute optimally to the economy.
Under the Deen Dayal Upadhyaya Grameen Koushalya Yojana, a total of 51,956 candidates have been skilled, of which 28,995 have been placed till November during 2014-15.