Investing in youth security drives growth

INDIA stands at a demographic turning point. With roughly half the population under the age of 30, the country holds a rare and time-bound advantage: the potential to convert its youthful workforce into an engine of broad-based, long-term growth. Yet this promise is shadowed by an equally significant risk. If India continues to rely primarily on fragmented welfare schemes and short-term subsidies rather than structural investments in human capability, the demographic dividend could fade into a demographic burden marked by low productivity, poor health, and widening inequality.

India does not need less social protection. It needs a fundamentally different social protection — one that strengthens young people’s ability to participate in and shape the economy of the future.

Young people are often perceived as the age group least in need of welfare support. But youth is, in fact, the most volatile phase of life. Individuals entering adulthood face the steepest transitions: moving from school to work, migrating from villages to cities, navigating new skill demands, taking early-career risks, and building the foundations of independence.

These transitions carry high stakes. India’s young adults also face the highest unemployment and underemployment rates, the greatest exposure to informal and gig work without protections, and rising mental and physical health challenges. Without structured protection during these years, short-term shocks — illness, loss of income, or skill mismatch — can have lifelong consequences, limiting future earnings and mobility.

A youth-centric safety net is not a handout; it is economic infrastructure. It gives young people stability during periods of change, supports risk-taking such as migration or entrepreneurship, and helps them build capabilities that drive national productivity. For a young India, the question is not if youth need a safety net, but whether the country can afford not to provide one.

Critics sometimes argue that social protection for youth may lead to misuse — that young people, without the family responsibilities of older adults, might spend support unwisely. But global evidence shows this fear is misplaced. When programmes are well designed — linked to education, training, job search, health, or apprenticeships — young people overwhelmingly use support productively. In fact, such safety nets often lead to higher school completion, better health, improved job readiness and greater entrepreneurial activity. The risks of misuse are far smaller than the economic cost of leaving a generation without the stability required to invest in their own skills and mobility. A youth safety net is not about creating dependency; it is about unlocking potential.

For decades, welfare in India has been equated with subsidies — food rations, fuel support, direct cash transfers, farm loan waivers and various forms of seasonal relief. These interventions are essential for immediate protection, particularly during crises. But by design, they are temporary and do little to address the underlying factors that create vulnerability: poor schooling, fragile health systems, skill mismatches and limited employment opportunities.

Subsidies create a floor but rarely create mobility. They prevent destitution but do not build resilience. If India is to equip its young people for a volatile economy, it must transition from crisis-relief welfare to capability-building welfare.

A resilient safety net for young India must begin with education — the most powerful predictor of lifetime earnings, health outcomes and social mobility. While India has made major strides in enrolment, learning outcomes remain deeply uneven. Many students complete schooling without foundational literacy or numeracy, leaving them ill-prepared for higher education or employment.

A modern safety net must therefore invest in early childhood development, teacher training, digital infrastructure and curriculum reform that emphasises analytical ability, creativity and problem-solving. Without addressing the widening gap between schooling and learning, no welfare scheme can create a future-ready workforce.

Health is often treated as an auxiliary welfare concern, when in fact it is core economic infrastructure. India’s young population continues to grapple with anaemia, nutritional deficiencies, gaps in reproductive health, and rising mental health needs. These conditions undermine productivity and constrain future earnings.

A modern safety net must include stronger primary healthcare, community health infrastructure, nutrition programmes, mental health support and adolescent health services. A nation cannot unlock its demographic dividend if its workforce enters adulthood with untreated health burdens.

The global labour market is undergoing seismic shifts driven by automation, artificial intelligence and the green economy. India’s skilling ecosystem, while improving, remains fragmented and often misaligned with industry needs. Many graduates find their qualifications do not match available jobs.

A youth-oriented safety net must embed continuous learning. This means seamless pathways from school to training to employment; apprenticeships; incentives for industry-led skilling; and opportunities for mid-career reskilling. For a generation that will experience multiple technological disruptions, lifelong learning is essential.

Within India’s social protection architecture, the National Social Assistance Programme (NSAP) remains a vital pillar. It covers over 3 crore beneficiaries, offering income support to the elderly, widows, persons with disabilities and families who lose a breadwinner. The programme’s digitisation, Aadhaar integration and direct transfers represent real improvements in transparency and delivery.

But NSAP was not designed for young people. Its assistance amounts are modest, and its structure reflects the vulnerabilities of the 1990s, not the needs of a 21st-century youth population. Shifting from short-term welfare to long-term human capital investment is not easy. Subsidies deliver visibility; structural investments yield impact over years. But the latter are essential if India is to harness its demographic advantage.

A comprehensive social safety net for young India must rest on four pillars: Universal, high-quality education, beginning in early childhood and extending through secondary schooling.

Accessible, preventive and affordable healthcare, including mental health and nutrition.

A dynamic skilling and employment system, with apprenticeships, lifelong learning and protections for informal and gig workers.

Targeted income support for those genuinely unable to work or in transition — delivered transparently through modern systems. 

This is not welfare expansion. It is an investment in India’s most productive generation.