India’s demographic dividend is one of its greatest strengths. Over 65% of the population is under 35. With such a young and aspiring workforce, one would expect economic dynamism and prosperity. But, millions of educated Indians remain unemployed or underemployed, creating a peculiar challenge for the country.
Why does this happen? Why do degree-holders struggle to find work? Is the education system failing them, or is it a deeper structural issue? More importantly, how do we fix it?
Let’s dive in.
Educated unemployment refers to a situation where individuals with formal education (graduates, postgraduates, or even doctorates) fail to secure jobs that match their qualifications. This issue is especially prominent in India, where lakhs of students earn degrees every year but struggle to find meaningful employment.
The key aspects of educated unemployment in India include:
While unemployment in itself is a global problem, educated unemployment is particularly worrisome in India because it signals a deeper systemic failure.
One of the biggest ironies of India’s higher education system is that it prepares students for exams, not for real-world challenges. Universities focus on rote learning and theoretical knowledge, leaving students with limited problem-solving abilities, creativity, or industry-ready skills. Take engineering as an example. India produces over 1.5 million engineers every year. But only about 60% are employable, and only about 45% meet industry standards (Times of India).
For many of Indian families, a government job is still the ultimate career aspiration. This leads to a peculiar kind of unemployment, where talented graduates spend years preparing for competitive exams instead of joining the workforce. Many students complete a basic degree (often without real interest in the subject), and then spend their 20s attempting UPSC, SSC, banking, or railway exams. This creates a bottleneck where talent and the prime young age are spent in an endless loop of exam preparation rather than productive work.
India has too many graduates and too few quality jobs. While lakhs of students graduate with degrees in commerce, arts, or science, the industries absorbing these graduates aren’t growing at the same pace. We have some stark realities. In 2023, India’s unemployment rate for individuals with advanced education was reported at 13.32%. (Trading Economics). For every 100 graduates, fewer than 20 get jobs in their studied field.
In countries like the U.S. or China, a large chunk of job creation comes from startups and small businesses. In India, entrepreneurship is still not the first career choice for most educated youth due to various challenges and barriers to entrepreneurship in our country. Even in a smaller country like Israel, the spirit to innovate and take risks is very high. The fear of failure, lack of early funding, and social stigma against business failures make young graduates chase jobs rather than create them. This risk-averse mindset limits job creation and increases dependency on corporate and government hiring. This is changing due to the popularity of Shark Tank India, new-age entrpereneurs, availability of venture funding, and policy push. Yet, we have a long way to go given our large population.
The consequences of educated unemployment need to be noted. The government invests billions in higher education, yet many graduates fail to contribute productively to the economy. The brain drain issue persists, as talented youth move abroad for better opportunities if the opportunities domestically are not commensurate with their expertise.
Further, unemployment fuels resentment. It makes youth vulnerable to radicalization, political exploitation, and social unrest. Jobless graduates often delay marriage, home ownership, and financial independence, affecting societal stability. It can also leed to anxiety, depression, and identity crises are rising among educated youth who can’t find jobs.
The most important is a shift from Degree-Centric to Skill-Centric Education. Universities must focus on applied learning, experiential education, and real-world problem-solving (World Economic Forum). Internships, apprenticeships, and hands-on projects should be mandatory. This is also proposed by the University Grants Commission to make the students ready for the workplace.
In the Indian context, it is fundamental to make entrepreneurship a first career choice. Entrepreneurship here doesn’t mean a cutting-edge tech startup alone. Any business, small or big, that creates wealth and jobs in society, or at least leads to self-employemnt, is an entrepreneurial initiative.
Finally, we have to bridge the industry-academia gap. This is often spoken about but a lot needs to be done. Rishihood University has actively brought in senior people from the industry as full-time and visiting faculty. It has also done formal partnerships with companies to bring the real-world insights into the curriculum. Universities should co-develop courses with industry leaders.
At Rishihood University, we believe education should not be about preparing students just for the first jobs but for leadership and problem-solving, core capabilities to succeed in life. For example, in the Makers Undergad (BBA) at Rishihood, students learn by working on real-life projects. Many students are pursuing startups with the support of incubation at Rishihood and the $5 Million Makers Fund.
This is not the just an expectation but a responsibility of educational institutions. India is at a crossroads. We can either keep producing unemployed degree holders or invest in a generation of nation-builders. The choice is ours.
CEO, Rishihood University
Students in India struggle to find jobs mainly due to a lack of skills that meet market expectations and intense competition
Universities and colleges must focus on the overall skill development of students. Curriculums should emphasise entrepreneurship, real-world problem-solving, and the integration of data and technology to empower students, making them self-reliant and capable.
Rishihood University in Haryana is not just a conventional college or university but a modern institution that blends Indic knowledge systems with 21st-century skills in a multidisciplinary curriculum. Every course, including BBA, B.Design, B.Sc. Psychology, and B.Tech, integrates these principles to provide a well-rounded education.
Students also get the opportunity to work on their ideas and transform them into businesses through incubation programs. Additionally, our compulsory paid internship program ensures students gain real-world experience and workplace readiness, preparing them for successful careers.
