SCARY! India's Graduates Face Job Crunch

Less than half of all graduates were employed, with 48.8 per cent reporting some form of work.

Over two-thirds of unemployed Indians aged 20-29 were graduates in 2023, with the share of degree holders among the unemployed rising sharply from 46 per cent in 2017 to 67 per cent in 2023, according to the State of Working India 2026 report released by Azim Premji University on Tuesday.

The report also found that less than half of all graduates were employed, with 48.8 per cent reporting some form of work.

Among graduates, only 6.7 per cent had permanent salaried jobs, while 3.7 per cent were in white-collar occupations.

Graduate Unemployment Surges in India

"Between 2004-2005 and 2023, while roughly 5 million graduates were added each year, only around 2.8 million found employment, and an even smaller share entered salaried jobs, contributing to rising graduate unemployment and slowing earnings growth," the report observed.

It noted that educational attainment in India has increased over the past decade, with a larger share of young people completing higher levels of education and entering the labour market with graduate degrees.

Low Salaried Jobs Among Graduates

India's demographic dividend is weakening, with the country nearing its final phase, the report said.

Those aged 15 to 29 number about 367 million and account for nearly a third of the working-age population.

Of these, 263 million are not in education and form the potential workforce.

Demographic Dividend Losing Strength

'The ratio of the working-age population to the dependent population is expected to decline from 2030 onwards due to a falling share of youth and a rise in the elderly population,' the report said.

It warned that without faster growth in productive employment, the demographic advantage of a large young workforce could diminish in the coming years.

ITI Training Quality Concerns Rise

The report also highlighted issues in the vocational training ecosystem, including industrial training institutes (ITIs).

It flagged a decline in training quality in several ITIs, citing concerns over infrastructure, instructor availability, and alignment with industry needs.

Need for Job Creation Push

"The number of ITIs has increased by nearly 300 per cent, driven largely by private ITIs.

'But this expansion has been accompanied by a decline in institutional quality, particularly among private providers.

'The link between ITI training and employment remains tenuous, with no perceptible association between the location of ITIs and that of manufacturing firms,' the report said.

It called for expanding the availability of salaried jobs to match the aspirations of an increasingly educated workforce.

The report said the scale of job creation required will depend on labour market priorities, including efforts to raise participation among groups such as graduate women.

It also recommended integrating school and vocational curricula to bridge gaps between education and skills and improve employability.

The report also stressed the need to strengthen the transition from education to employment, including improvements to the National Career Service platform to better connect job seekers with employers.

It also recommended expanding social security systems to support young workers entering the labour market, including migrant youth.

The report added that policies should focus on enabling workers to move from informal to organised sector jobs and on strengthening local labour markets to create opportunities for those unable to migrate.

Feature Presentation: Ashish Narsale/Rediff