India: Why are young graduates still struggling to get jobs?

Only about half of India's graduates are considered employable, according to a recent survey highlighting the disconnect between India's rapid development, its massive youth population, and the needs of its quickly evolving labor market.

The India Skills Report of 2024 interviewed hundreds of thousands of final-year students and postgraduates, judging their skills based on an employability test and the data gathered from some 150 organizations from various industries. Ultimately, only 51.25% were deemed competent enough to be hired.

For some, this is a reason to be optimistic — the latest figures show a massive jump from less than 34% employability in 2014. But many economists say it is clear that a large number of Indian universities still don't equip their students with real-world skills.

"Mere degrees are not enough for getting jobs because job readiness is closely correlated to the development of skills and apprenticeship. What is more, many engineering graduates are not industry-ready," Lekha Chakraborty, professor and chair of the National Institute of Public Finance and Policy told DW.

Still not enough doctors and nurses

Chakraborty, who has studied the issue closely, points to India's healthcare sector, particularly filling the positions for doctors and nurses. Despite having a large pool of trained individuals there is still a dearth of specialist doctors at rural health centers, and the crisis has worsened over the years.

As of March 2023, only 4,413 specialist doctors were available for community health centers when almost 22,000 were needed, a survey showed.

"The current training programs often do not adequately prepare graduates for the realities of the healthcare system or align with the needs of local populations. This leads to inadequacies in resource allocation and workforce distribution," Chakraborty said.

Waiting for a 'white-collar' job

This year's India Employment Report also shows that nearly 83% of the country's unemployed workforce is made up of youth aged 15-29. Strikingly, nearly two out of three unemployed people in India in 2022 were young and educated — meaning they have secondary or higher education.

Chakraborty believes that this can be partly explained by highly trained youths holding out for a high-status job.

"The aspirations for their desired white-collar jobs pre-empt the educated youth from entering job markets faster," added Chakraborty.

Education system 'needs to be set right'

Arun Kumar, a retired professor of economics at the Jawaharlal Nehru University, told DW that the government has not made sufficient investments in the health and education sectors and has yet to recognize their critical roles in improving national outcomes.

"The education system is flawed and that needs to be set right first. We produce 50,000 world class students and most of them go abroad while the rest stay back while what we need are millions. If we must be a powerhouse of skills and technology, then we must cast a serious eye at why," said Kumar.

Kumar's concerns about India's future seem particularly relevant in light of the latest Annual Status of Education Report (ASER) that assesses the critical trends in education, particularly focusing on enrollment, learning outcomes, and dropout rates.

While surveying youth aged 14-18, the report revealed that 42% cannot read simple sentences in English, and more than half struggle with basic division problems.

It also revealed that over 96% of 14-year-olds are going to school, but only 67.4% remain there by the age of 18, showing a massive dropout rate for teenagers.

"Prime Minister Narendra Modi has spoken about India taking on a leadership role in global affairs as 'Vishwa guru' [world's teacher] given its population and scale of economy but that cannot happen unless we change matters," added Kumar.

Waiting for 'demographic dividend'

Millions of young people enter the labor market every year in the world's most populous country. And with the median age in India being 28, the nation is nearing the "demographic dividend" stage — an era in a society's history where young working population is high and the number of dependents — including children, the elderly and the unemployed — is relatively low, leading to an economic boost.

However, some experts believe that India must align educational outcomes with market demands in order to reap the benefits.

In the last budget, the government announced several key initiatives related to apprenticeships aimed at enhancing skill development and employment opportunities. The reforms aim to help 10 million young people over five years.

But the challenge lies not only in addressing current mismatches but also in preparing for future shifts in the labor market due to technological advancements and changing economic needs.

Millions apply, only 100,000 accepted into medical school

Maheshwer Peri, chairman and founder of Careers360 platform, which provides career counseling and information on colleges, told DW that millions of students who have graduated are underemployed especially in the health and engineering sectors and thus unable to maximize their potential.

"We have 2.5 million students applying for 100,000 medical seats in India in a competitive exam. Look at the pressure and what becomes of the rest who do not make the cut?" Peri told DW.

"There has to be a real-time tracking of training outcomes to effectively bridge the gap between job availability and workforce skills," he added.

Edited by: Darko Janjevic