Curious Case of Educated Unemployment Problem in India

Unemployment is a global issue that affects nations across the world. However, India faces a peculiar problem: educated unemployment. While it may seem paradoxical that a country with a vast pool of educated talent grapples with joblessness, it’s a reality that needs attention and understanding. This paradoxical situation, where individuals with higher education struggle to find suitable employment, stands out as a peculiarity in the country’s job market.

Educated youth struggle for jobs in India. To gain a comprehensive understanding of its gravity, it is essential to delve deeply into various aspects such as unemployment trends, factors contributing to job scarcity, government policies and strategies, and more.

Unemployment rate trend

Educated unemployment has become increasingly prevalent in India, with many young individuals holding qualifications ranging from matriculation to post-graduation degrees facing significant challenges in securing employment opportunities. In the most recent annual report published by the International Labour Organisation, it was reported that the unemployment rate in India experienced a decrease, reaching 8% in the year 2023. The highest recorded unemployment rate during this period was 23.5%, while the lowest stood at 6.5%.

Historical data by date and year in (%)

Historical data by date and year in (%)Source: International Labour Organisation

Key factors contributing to India’s joblessness

  • Population growth vs. job creation
  • Quality of education
  • Skill gap
  • Job mismatch
  • Economic slowdown
  • Preference for government jobs

Why is educated unemployment a peculiar problem in India?

Educated unemployment is often regarded as a peculiar problem in India. This issue reflects the challenges faced by well-educated individuals in securing suitable employment opportunities, prompting a closer examination of its unique dynamics within the Indian context. This issue is characterised by several noteworthy factors that set it apart from other unemployment scenarios:

  • Overqualified: Many educated individuals in India find themselves overqualified for the limited job opportunities available in the job market.
  • Underemployment: A concerning aspect of today’s labour force. Despite acquiring higher education and qualifications, many individuals find themselves in jobs that only partially utilise their skills and expertise.
  • Societal stigma: Indian society often attaches a stigma to an individual without a job, especially among educated youth.

Festive season, a temporary relief to unemployment

India experiences an annual phenomenon known as ‘festive hiring’. India is known for its various festivals, and these celebrations play a unique role in the country’s job market. Businesses, particularly in retail and e-commerce, hire temporary workers to handle the surge in demand during the festive season.

  • Temporary relief: Festive hiring provides a temporary reprieve to some unemployed individuals. They can secure short-term employment during festivals, earning income to support themselves and their families.
  • Not a permanent solution: Festive hiring is not a sustainable solution to the larger problem. These jobs are often low-paying, lack job security, and are limited to the duration of the festive season.
  • Skilled workforce, menial jobs: Festive hiring often involves employing individuals with higher education in roles requiring minimal skills. This situation further highlights the mismatch between qualifications and job opportunities.
  • Festive hiring is cyclical. The rest of the year, individuals continue to struggle to find stable, well-paying employment.

Thus, festive hiring can provide only a temporary job respite, even if it doesn’t entirely alleviate the broader issue.

Policies and strategies

Unemployment in India is a multifaceted problem deeply rooted in factors like population size, the education system, and economic fluctuations. To tackle this challenge effectively, India needs comprehensive reforms in its education system, strengthened social safety nets, increased focus on skill development, and sustained economic growth that generates quality jobs year-round.

Government initiatives such as the PLI scheme and Make in India have created momentum for the creation of new job possibilities in all industries. The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) is anticipated to generate new jobs and encourage employers to support formal employment. Other sectors, such as hospitality and tourism, FMCG, healthcare & pharmaceuticals, renewables, automobile companies with an electric vehicle presence, oil & energy, and infrastructure-related sectors such as steel, engineering, and chemicals, are anticipated to drive white-collar employment.

Furthermore, the Indian government has implemented various initiatives to boost employment. The Skill India campaign, for instance, seeks to equip individuals with the skills needed to enhance their employability. Additionally, various staffing solution-providing firms act as a bridge connecting job seekers with employers across diverse sectors and industries. These concerted efforts, coupled with the nation’s economic resurgence, are poised to improve the employment landscape in India in the foreseeable future. Moreover, digital transformation, automation, IoT, and 5G are expected to open doors to a plethora of roles. We have published an extensive article covering opportunities in the field of telecom jobs, and you may find it engaging: Telecom sector in India: Enhancing opportunities in telecom jobs.

Unemployment remains a unique challenge in India’s employment landscape, requiring multifaceted solutions. While festive hiring provides a temporary job respite, addressing this issue’s root causes is of utmost importance. Addressing job scarcity is not just an economic imperative but also a social and humanitarian responsibility, as it impacts the well-being and future prospects of millions of individuals and families.

At TeamLease, we are committed to our mission of ‘Putting India to Work.’ This mission drives us to invest in education, skill development, and entrepreneurship and foster collaboration between academia and industry. Our relentless efforts are geared towards reducing educated unemployment and ensuring that India’s skilled and educated workforce finds meaningful and fulfilling employment opportunities year-round. Additionally, we strive to enhance the ease of doing business to create an environment conducive to job creation and economic growth.

Contact us to discuss how we can partner in addressing the challenges of unemployment and creating a more prosperous India.

Author

TeamLease Services Limited

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