What's behind high joblessness among India's youth?

Jagdish Pal is a math graduate in Kanpur, a city in the northern Indian state of Uttar Pradesh. The 21-year-old applied for a low-level government job last year. Yet, even for this lowly position, competition was extreme. Pal was one of over 75,000 applicants — many of whom held postgraduate degrees — hoping to land the job.  

"I knew I was overqualified but there are simply no jobs on offer, that's why I applied," he told DW.

Many young people across India find themselves in a similar situation.

The Indian economy is rapidly growing — it expanded 8.4% in the fourth quarter of 2023 — but it has struggled to generate enough jobs for the millions of young Indians entering the labor market every year. 

A reason for this problem is that much of the growth over the past few decades has been driven by an expansion of India's services sector, which is not as labor intensive as its manufacturing counterpart.

"Inclusive growth requires providing jobs rapidly at the bottom of the pyramid, not only at the top of the wage, and skill distribution," Santosh Mehrotra, a visiting professor at the Centre for Development Studies, University of Bath, England, told DW.

Unemployment even among graduates

Unemployment remains persistent in India even for college graduates.

There's also a massive mismatch of skills and expectations, with many jobs being created in fields such as agriculture and construction, which don't meet the demands of a newly educated workforce.

The recently released India Employment Report 2024, by the Institute for Human Development (IHD) and International Labour Organisation (ILO), also painted a grim picture of the employment conditions in the country.

India's youth account for almost 83% of the unemployed workforce and the share of young people with secondary or higher education among the total of unemployed Indians nearly doubled from 35.2% in 2000 to 65.7% in 2022, the report said.

"Youth unemployment rates in India are now higher than the global levels," it pointed out.

"The Indian economy has not been able to create enough remunerative jobs in the non-farm sectors for new educated youth labor force entrants, which is reflected in the high and increasing unemployment rate."

A major election issue?

High youth unemployment presents a major irritant for Prime Minister Narendra Modi's government as India gears up for a general election, scheduled to take place in seven phases over six weeks, beginning on April 19.

Modi's administration has made stewardship of the economy a core aspect of its campaign.

Over the last three years, the government has stepped up spending on roads, bridges and other infrastructure as a way to boost the economy and create jobs.

Despite the efforts, employment creation for youth remains inadequate, as the IHD/ILO report showed.

"Unemployment is a multidimensional problem. You need policy action on various fronts. This is essentially an economic aspect, but it has a lot of social and political dimensions as well," Arun Kumar, an economist, told DW.

"With the spread of education over the last three decades, the Indian workforce is more educated but jobs for them have hardly grown. That is why unemployment for the educated youth has become a huge issue," added Kumar.

Opposition parties have blamed Modi's administration for the problem.

"Our youth is bearing the brunt of Modi government's pathetic apathy… ILO and IHD report conclusively says that the unemployment problem is grim in India," Mallikarjun Kharge, the president of the principal opposition Congress party, wrote on X, formerly known as Twitter.

As the election approaches, the opposition is trying to turn unemployment into a major campaign issue — in a country that has a large young populace, with 65% of Indians estimated to be under 35 years old.

What's the impact on women?

The jobs crisis particularly affects women.

The IHD/ILO report pointed out that among the educated unemployed youth, women accounted for a larger share (76.7%) than men (62.2%). 

It added that India also has one of the lowest female labor force participation rates in the world, at about 25%.

Lekha Chakraborty, senior economist at the National Institute of Public Finance and Policy, said joblessness among the educated, especially among women, is a significant problem in India.

"This is due to three reasons: lack of comprehensive 'care economy' infrastructure policies, rigid social norms, and lack of adequate skills," she explained.

"If we incorporate the care economy in macroeconomic policies, the overall economic well-being of the country will increase. Concrete measures are needed to address labor market discrimination against women and marginalized social groups."

Edited by: Srinivas Mazumdaru