By Dhurjati Mukherjee
India’s challenge is not just job availability, but job quality. Unemployment and underemployment and whether the government has concrete plans to address the needs remains largely ignored. Additionally, there is a widely acknowledged disconnect between what the education system produces and what the labour market demands. Degrees often do not translate into employability. What measures either the Centre or states propose to take to usher in reform are unknown. Electoral politics tends to prioritise short-term narratives—blame, identity issues, or welfare announcements—over detailed employment strategies. Job creation plans, when presented, are often headline-driven (targets, incentives) rather than backed by transparent roadmaps, timelines, and accountability metrics.
In such a situation, a report titled ‘State of Working India 2026’ noted that between 2004 and 2023 50 lakh-odd graduates were added every year, while the number of employed graduates rose by only around 28 lakh annually, out of which 17 lakh were salaried. Obviously, graduate employment has not kept pace with education because of which educated unemployment and underemployment is a serious spectre across the country.
The share of graduates among unemployed youth (29-29 years) has more than doubled over the past two decades, at a time when India has made substantial progress in expanding access to higher education for its youth, stated a report released by Azim Premji University recently. Data showed that around 67 per cent of unemployed in 2023 (around 1.1 crore) in the country were graduates, up from 32 per cent in 2004 (30 lakh). At same time, share of graduates among youth has risen to 28 per cent in 2023 (6.3 crore) from just 10 per cent in 2004 (1.9 crore).
An issue that has not been covered in the report is what percentage has come from the lower segments of society in relation to both the percentage of graduates and those who got employment amongst them. In both these areas, the privileged sections get maximum opportunities, as an established fact. The report has rightly emphasised on skill training, vocational and technical, to increase the chances of employment generation. The world of work must be made class and caste agnostic.
At a recent conference, Secretary of Higher Education Vineet Joshi, pointed out that India’s education system is changing under the influence of the National Education Policy 2020 and employability and entrepreneurship are now being seen as essential outcomes. But it is difficult to agree with him as the recent budget has not given priority to education and this is evident from the rather poor financial allocation. Moreover, despite all skilling efforts, there is just 20 per cent annual growth in the last three years, forming just 0.3 per cent of the workforce compared to about 4 per cent in the U.K. and Germany.
At the same conference, Prof. Anil Sahasrabuddhe, Chairman, National Assessment and Accreditation Council (NAAC) stated recently that outdated curricula had long been a complaint from the industry and institutions had been forced to move towards more frequent revision and closer consultation with employers. He and other experts called for continuous curriculum reform in tune with the changing demands of industry. In line with this, the skilling policy needs to be linked to broader job creation, specially in manufacturing and related sectors that can absorb both graduate and non-graduate workers.
Thus, one cannot but disagree with the poor quality of education imparted in colleges located in rural and backward districts. Moreover, the poor funding to these institutions has aggravated in recent years. Unless there is a strategic transformation, obviously through more allocation of funds in the education sector as well as making the curriculum more job-oriented and introducing more courses in this direction, there may not be any significant change in Indian education and increasing employability.
The Lokniti-CSDS survey in 2024 found nearly two-thirds of respondents claimed getting jobs harder than five years ago. Many aspire to go abroad for education and better jobs but either lack the resources or opportunities. Moreover, with anti-immigration sentiments rising globally immigration options for India’s Gen Z are getting fewer.
Many young Indians acknowledge that the government hasn’t delivered on earlier promises on ‘achhe din’ or created millions of new good jobs. However, a section credited Modi with strengthening India’s global standing and projecting confidence about the country’s future. Though a section of young scientists, innovators and engineers and coders are creating new technologies and inventing new ideas in different scientific and engineering dimensions, this is just a very small part of the educated workforce. Beneath this layer of highly employable talent lies a much larger group of employable talent struggling to find suitable jobs.
Meanwhile, another side of the unemployment problem is the low payment that is given, even for qualified candidates. The salaries have not kept pace with recent times. On the other hand, though an increasing number of women have been joining the workforce, the payments given to the opposite sex are much lower than their male counterparts. The condition of informal sector workers is even worse.
The crisis has been aggravated with political parties making false promises before elections but not giving sufficient attention thereafter. The critical situation of most states where industries do not find a congenial climate to grow due to various factors has further hampered the prospect of job creation.
Steps to increase employment generation are not quite pronounced. However, the Union Cabinet recently approved spending Rs 33,660 crore ($3.63 billion) to develop 100 industrial parks in joint ventures with state governments and a state-run company. This, of course, is a long-term plan which should have been announced much earlier and the government offering financial support of up to Rs 1 crore per acre for core and social infrastructure sounds impressive. But the time taken for these parks to come about is not known though it is understood to generate about 15 lakh direct jobs after all the parks are developed.
This is not encouraging when job creation needs to be taken up with all urgency. Primarily, as Raghuram Rajan, the former RBI governor rightly pointed out recently, there is a need to expand skilling massively, marrying traditional methods of skilling with modern ones, monitoring provider needs and customer experience and looking for constant improvement. Technological advancement must be inducted into skilling to meet global standards. There is a need to change attitudes towards working with hands, starting in schools. For this the government, both at the Centre and states should prepare an action plan, announcing incentives for small and cottage industries as well as the service sector where there would be considerable job creation.
Finally, it must be acknowledged that most political parties are still not according adequate priority to the urgent challenge of job creation. Prolonged unemployment and underemployment—particularly among the youth—carry within them the seeds of deep social unrest. Such unrest may not always be immediately visible, but its gradual accumulation can eventually trigger a situation that becomes difficult to manage or contain. Ignoring this reality risks not only economic stagnation but also a serious strain on social stability and public trust.—INFA
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