Over nine decades since the noted engineer and statesman M Visvesvaraya highlighted the alarming rate of unemployment among the educated, the issue of youth unemployment in India still remains predominant. Even with an overall decrease in the unemployment rate from 6.1% in 2017-18 to 3.2% in 2022-23, significant disparities persist, with the highest unemployment rates being observed among young, highly educated workers. This trend seems to be a systemic feature of the Indian economy, displaying difficulties in creating job opportunities for young graduates.

It is also noted that individuals possessing a higher education have consistently faced higher unemployment rates, a trend that has been characterizing the Indian economy since the early ’90s. Data reveals that from about a 9% unemployment rate amongst graduates in the ’90s, the rate dropped to 7.66% in 2011-12, only to soar to approximately 17% in 2017-18 and then slightly reduce to 13% by 2022-23.

The unemployment rate for young workers aged 18 to 29 with a graduate degree has seen a similar fluctuating pattern. From 1993-94 to 2004-05, nearly 20-25% of all young individuals holding graduate degrees faced extended unemployment periods of six months or more. The rate declined to 20% in 2011-12 but then skyrocketed to an alarming 36% in 2017-18. As of 2022-23, the rate has been trimmed to 27% of young graduates.

As enrolment rates continue to increase, a larger percentage of the labour force will consist of graduates, thereby boosting the collective rates of unemployment. This problem amongst young job-seekers is not a one-off issue but rather a concerning characteristic of the Indian labour market. More efforts are urgently needed to identify the underlying problems causing high unemployment rates amongst the highly educated, and to devise corresponding solutions. These might include addressing the education system’s shortcomings in providing relevant skills, or the economy’s inability to generate enough jobs.

This examination underscores the critical need to effectively harness the potential of the demographic dividend to ensure the aspirations of the youth are met and their potential realized. The overcoming of this challenge will require additional research, progressive policy-making, and concerted effort from multiple stakeholders.