Context

India, despite being one of the world’s largest producers of graduates, faces a persistent paradox: millions of educated youth remain unemployed or underemployed due to a mismatch between academic output and industry requirements.
Recent data from the Employees’ Provident Fund Organisation (EPFO) and key employment reports underscore the urgent need for skilling, reskilling, and systemic reform to equip India’s workforce for a rapidly changing job market.

Understanding the Formal Employment Landscape

EPFO as a Proxy for Formal Employment Trends

• EPFO is a key barometer of formal employment, managing retirement savings for over 70 million workers, making it one of the largest global social security agencies.

Post-COVID Trends (as of March 2025)

• Youth aged 18–25, especially the 18–21 age group, make up 18%–22% of new EPFO subscribers.
• This indicates a positive trend in formalisation of employment and a steady increase in net new enrollments, particularly among first-time job seekers.

India’s Youth Unemployment and Employability Crisis

Insights from the India Employment Report 2024

• Published by the International Labour Organization (ILO) and the Institute for Human Development (IHD).
• Youth constitute 83% of India’s unemployed population.
• Ironically, the highest unemployment rates are among the educated, especially those with secondary and higher education qualifications.

Economic Survey 2023–24 Findings

• The key issue is unemployability—only 50% of graduates are job-ready.
• There''s a significant skills gap, particularly in digital proficiency, professional competencies, and soft skills.
• Technological shifts like AI and automation are further threatening existing job roles, especially in IT-related fields.

Digital Skills Deficit in the Workforce

India Employment Report 2024 – Digital Literacy Gaps

• 75% of individuals struggle to send emails with attachments.
• 60%+ are unable to perform basic file operations.
• 90% lack skills in using spreadsheets and formulas.

This stark skills mismatch threatens India’s ability to leverage opportunities in a digital-first economy.

World Economic Forum – Future of Jobs Report 2025

• By 2030, 170 million new jobs are expected to be created (14% of employment).
• 92 million jobs could be displaced (8%), leading to a net job creation of 78 million (7%).
• Without urgent skilling initiatives, India risks missing out on this window of opportunity.

Structural and Policy Reforms Required

1. Strengthening Education-Industry Linkages

• Make industry-academia collaboration mandatory in all higher education institutions.
• Tie institutional accreditation to placement performance and industry engagement.
• Hold educational institutions accountable for employment outcomes of graduates.

2. Curriculum and Pedagogy Overhaul

• Introduce Idea Labs and Tinker Labs as mandatory across schools and colleges to promote innovation.
• Include soft skills, foreign language training, and liberal arts education as essential components of curricula.

3. Preparing Youth for Global Workforce

• Develop training programs aligned with international job markets, particularly in ageing economies in the West.
• Example: The India-EU Link4Skills project, run by the International Institute of Migration and Development, as a model for cross-border skilling and placement.

4. Reforming Education Governance

• Establish an Indian Education Services (IES) cadre on the lines of the IAS to bring top talent into education policy and administration.
• Enable industry experts to teach part-time or full-time in academic institutions to bridge the gap between classroom theory and practical application.

The Way Forward: Moving from Degree to Deployment

India’s demographic dividend can quickly become a burden unless the youth are made employment-ready through:

• Stronger education-to-employment pipelines
• Scalable digital and vocational training
• A focus on future-ready job skills
• Greater accountability in public and private education systems
• Global skilling partnerships to tap into international labour demands

Conclusion

Addressing India’s employment crisis is not just about creating jobs — it is about ensuring that graduates have the skills, mindset, and adaptability to succeed in the 21st-century job market.
This calls for coordinated action across government, academia, and industry to transform India from a degree-rich but skill-poor nation into a workforce-ready global powerhouse.