‘Jobless Growth’ Fuels India’s Unemployment Crisis

With a staggering 40% of its youth out of work, the world's most populous country faces profound economic challenges

‘Jobless Growth’ Fuels India’s Unemployment Crisis
An unemployed youth looks for work in Hyderabad, India, on Aug. 25, 2021. (Noah Seelam/AFP via Getty Images)

Addressing a room full of job seekers — mostly young men, with a lone woman huddled at the back — “Pinky Singh from Banaras” introduced herself. She stood out in the crowd, dressed in a suave pant suit with black heels rather than a traditional Indian salwar kameez or saree. An employee at Pukhraj Health Care Private Limited, Singh then introduced her workplace: “We’re a 24-year-old company with branches in 17 states. We’re hiring for branch manager posts. Workday will be 8 hours and posting is in Banaras itself. We’re looking for applicants between the ages of 18 and 25. Minimum qualification is 10 plus [10th grade graduates], maximum can be whatever. Anyone interested can come register with us.”

As soon as she started to walk away, she realized that she forgot to convey some vital information. “Before you start, there will be 180 days of training, where we will teach you about conversation, body language and dressing. During the training period, food and accommodation will be free. No expenses from your side,” she said, adding that the stipend would be between 8,000 rupees and 15,000 rupees ($97 to $182) per month, with a salary of 25,000 rupees ($304) after the training.

The response from the crowd of over 50 people was tepid. Pinky was the first recruiter to speak at this bimonthly job fair organized by the government employment office in the city of Banaras (also known as Varanasi). These fairs are common in small towns and cities across India and are the government’s way of ensuring that unemployed youth are afforded opportunities for work, at least theoretically.

Next in line was Shashikant Chaubey, a human resources associate at Bombay Intelligence Security Limited, which had 300 openings for security guards, security supervisors and bouncers in different parts of the country. “We’re hiring for Gujarat on an immediate basis,” Chaubey said, referring to a state on the western coast of India that is over 900 miles away from Varanasi. “We’re looking for high school graduates with a height of at least 165 centimeters [5 foot 5 inches].” The monthly salary ranged between 11,000 rupees and 18,000 rupees ($134 to $219).

Just then, a student raised his hand. “Sir, do you have any postings in Banaras itself?”

Chaubey exchanged a glance with Deep Kumar Singh, the officer at the employment office, and replied hesitantly, “We give jobs in Banaras as well,” but the salary on offer is lower — between 9,000 rupees and 10,000 rupees ($109 to $121).

Undeterred, the student nodded in satisfaction.

But Deep Kumar felt the need to jump in. “Look, I keep telling all of you again and again. You should be ready to leave Banaras. You can’t stay here all your life. The kind of opportunities you will get outside, you won’t get here. It’s not like they’re asking you to leave the country. You can come home anytime.” He then wished them luck and, with that, the job fair officially began.

Of the 1,000 or so job seekers who attend these bimonthly fairs, approximately 10% succeed in getting a job. But neither recruiters nor recruits seem to be excited about the employment prospects on offer. Recruiters are of the view that the youth who attend these fairs are mediocre college graduates with few or no skills. Recruits, on the other hand, think of themselves as part of an educated, degree-holding elite who deserve secure, salaried employment at wages much higher than those available. Both end up participating in a mutually accepted compromise: They are here because, in a country of 1.4 billion people and nowhere close to as many jobs, they have no other option.

Last month, India overtook China as the world’s most populous country. It also has one of the youngest demographics in the world: 66% of the population is below the age of 35, and 1 in 5 young people in the world is Indian. This has fueled discussions about how India might generate employment for this growing workforce and harness its “demographic dividend.” The country’s youth are supposed to be the engine propelling it forward. Instead, they are the ones finding it hardest to get a job in the current economic climate.

India’s economy has long suffered from what experts call “jobless growth,” as a growing workforce struggles to secure employment even as GDP continues to rise. The unemployment rate has consistently increased over the last two decades — from 2% in 2010 to 5% in 2015 and 6.1% in 2018. According to the Center for Monitoring Indian Economy, the latest figure is around 8% — the highest it has ever been. The situation is particularly dire among young people, where unemployment is recorded at a staggering 40%. Educated youths have been hardest hit, especially college graduates from outside India’s largest cities, who have studied subjects like agriculture, history, English, philosophy and communication. Jobs catering to their qualifications are difficult, and increasingly impossible, to come by.

On the one hand, they find themselves overqualified for manual labor jobs. On the other, they lack the technical skills required for high-paying jobs in IT and professional services. To make matters worse, jobs that social science students generally gravitate toward — in journalism, academia, consultancies and think tanks — are few and far between outside metropolises like Delhi, Mumbai and Bangalore. In the absence of suitable employment in the private sector, many turn to government jobs to fulfill their aspirations. The government is the single largest employer in most small towns and cities — and youngsters spend years applying for job openings in the civil service, railways and teaching. But a rapid increase in the supply of educated youth, coupled with a gradual reduction of public-sector vacancies has resulted in stiff competition for even the most junior positions in government offices.

Between 2021 and 2022, 18.7 million people applied for central government jobs in India. Of these, only 38,850 were hired. That’s a success rate of 0.2%. Individuals with doctoral degrees and engineering and MBA graduates are among the thousands who apply for jobs as a street-sweeper or an orderly for the police — positions that require only a fifth-grade education.

Unsurprisingly, protests have been occurring across the country with increased frequency, with youth at the forefront leading the rallies, chanting anti-government slogans and blocking roads and railway tracks to demand employment opportunities they believe they deserve. The youth who were once heralded as India’s dividend are increasingly becoming its biggest liability. No one — from parents to university administrators and government officials — knows what to do with this workforce that has no work.

The city of Varanasi in the north Indian heartland is one of the oldest in the country and the beating heart of Hinduism. Situated in the state of Uttar Pradesh (UP), the city attracted attention in 2014 when Narendra Modi, then the prime ministerial candidate for the Bharatiya Janata Party (BJP), decided to fight the elections from here. Since he took office, there has been a massive push to “develop” Varanasi, to boost tourism and increase jobs and revenue.

In many respects, Varanasi is a typical second-tier city — an urban center, relatively large compared to its surroundings, but not as developed as the major metropolises. Its economy comprises a mix of jobs — traditional occupations passed down in the family for generations such as boatmen, temple priests, weavers, cremation workers; service sector jobs in the budding tourist industry, including hoteliers, restaurateurs, shopkeepers and rickshaw pullers; and government jobs in administration, schools, colleges and railways. The city has also been an educational hub with leading universities, which attract students from surrounding areas of the state as well as from across the country. All of this makes it a microcosm for studying the crisis of youth unemployment in India.

Akanksha Azad is pursuing another degree in political science after completing her undergraduate and graduate studies at Banaras Hindu University (BHU), a prestigious public university and one of the oldest in UP. “Everyone is impressed by the outward shine of the university. But people who are studying here know the reality,” she said, explaining that the quality of education at the university depends on luck. “If you get a good professor, they’ll take regular classes. But if you get a bad professor, and there’s a lot of bad professors out there, then it’s a problem. They will send a WhatsApp message saying class is canceled today due to this reason or that.” Consequently, students are left to study large parts of the syllabus on their own.

Of the 100 students in Azad’s cohort, two have government jobs and five have been admitted to doctoral programs. The rest are just waiting around for some opportunity to materialize. Azad wanted to do a doctorate in subaltern studies, but with only 12 spots in the department and hundreds of applicants, she didn’t get in. She has instead settled on a master’s degree and is waiting until next year when she can apply again. “Everyone is trying to find stability in one way or another,” she said. “First they try for a government job, but they don’t get it. Then they come back and try for a Ph.D, because of the stipend and your next five years are set. But they’re not getting that either.”

Concern about a quality education is common among students at public universities in India. Shivam Rai, a senior studying mass media at Mahatma Gandhi Kashi Vidyapeeth University, issued an obligatory disclaimer that he didn’t want to insult his professors, but said that most of them have no practical experience of the world. In the media department, almost none of the professors are working journalists. “So how can you expect them to teach us anything about the real world?” he said.

“You talk to some of the youth here, ask them basic questions, and they won’t be able to answer,” said Akash Pandey, Rai’s classmate and friend. After three years, if they don’t get a job — which, unsurprisingly, most don’t — they either apply for master’s degrees or start preparing for one of the many entrance exams to land a government job.

“There has been no [job] placement here for the last three years,” said Rai, referring to the failure of recruitment drives on university campuses. “If any student gets a job, it is on their own initiative.” For him, this signifies universities reneging on their most fundamental responsibility — to provide employment.

However, Raman Pant, an associate professor of statistics at Kashi Vidyapeeth who manages the employment bureau responsible for ensuring campus placements, largely blames the students for the prevalent joblessness. Students, he said, tend to be biased against the private sector and are preoccupied with getting government jobs. “So even when we call private companies to campus, no one shows up.”

Students are not inexperienced, he said, but they lack communication skills. They have ideas, but they don’t know how to express them. Hence the employment bureau has started organizing communication workshops, which might seem basic, but since most students migrate from villages around Varanasi, they have not had this training before, Pant explained.

Even so, the weight of expectation from families and the pressure to land a job takes a psychological toll on students. “Some can’t handle [it] and commit suicide,” said Adarsh Kumar, an undergraduate student of history at BHU. News of suicides has become more frequent on campus in recent years. According to the National Crime Records Bureau, there was an increase of over 30% in student suicides in India from 2017 to 2021.

Caught up in the wave of liberalization in the 1990s, India removed state subsidies and protectionist policies to make way for private and foreign investment. Liberalization did lead to economic growth, but the manufacturing sector in India did not expand. Instead, Indian cities witnessed the proliferation of new kinds of jobs, most notably high-skilled jobs in IT and the IT-enabled service industries, which led to India’s software boom. But this sector employed only a small, elite group of professionals. Other jobs in the service sector tended to be low-skilled ones in hospitality, entertainment, retail, transportation, housekeeping and medical services, which had lower salaries and little job security.

The economic growth of the 1990s went hand in hand with a rapid increase in higher education. In 1950, there were six universities and 40 colleges in UP enrolling roughly 50,000 students. At the start of the millennium, this number shot up to 27 universities and 763 colleges in the state. India was churning out graduates and postgraduates at an unprecedented rate. Images of a newly liberalized India, which promised social mobility and notions of “new middle-class” success, led to the youth to form their own set of aspirations. Liberalization transformed youth unemployment from an issue that had been simmering beneath the surface into a full-blown crisis.

While the Indian economy underwent radical change, the British colonial system of higher education, which prioritizes annual exams and rote learning, has remained. Teachers and students focus on exam preparation and success. This has contributed to a host of graduates in nontechnical subjects who are, in theory, “educated” but are ill-equipped with the practical skills required for the jobs on offer.

Indian education has also created a strange paradox. Employers realize that these quasi-educated youths require considerable training to become “job ready.” But the youth are uninterested or unwilling to undergo the training for jobs that don’t meet their expectations of secure employment in the first place. Hence, many turn to government jobs, not only because these provide the stability and respectability that are absent from the private sector, but also because students are familiar with the selection process, based on competitive, annual exams.

In his memoir “Curfewed Night,” the Kashmiri journalist Basharat Peer shares his experience at Delhi University in the 2000s and highlights why Indian youths are fascinated with government jobs. “My neighborhood was full of students from small towns and villages of India, living very austere lives and preparing for the ‘competition’ or the ‘civils’ — the Indian Civil Service Examination. They dredged through tedious manuals and textbooks for four, five, even six years … dreaming of sitting behind the chair of a district magistrate, being surrounded by armed guards, servants, drivers.”

No less alluring, once a “government servant,” as they are called, there is job security until retirement at the age of 60, after which most of these jobs guarantee a pension.

Like the growth in training schemes to get new hires “job-ready,” the civil service exams have spawned a sprawling industry of tutors and coaching centers to help students land these jobs. Cities like Kota have become “coaching hubs,” where students from across the country anchor themselves for years, dedicating their lives to preparing for these exams.

To make matters worse, the recruitment process for government jobs is wracked with issues. Vacancies in key government sectors are left unfilled for years due to a combination of bureaucratic red tape and inefficiency. Recruitment schedules are erratic, with exams sometimes held each year, other times once every three to five years. Exam papers tend to get leaked every so often, rendering the results void and applicants frustrated. Bribery and corruption permeate every level of the recruitment process, making all selections suspect. Consequently, India’s youth are stuck in limbo, condemned to spend their best years waiting for opportunities that never materialize and vacancies that keep shrinking.

In his book “Timepass: Youth, Class and the Politics of Waiting in India,” Craig Jeffrey explains the impact on young men who are caught in a state of perpetual waiting — for government exams, for results, for a job. They do not see time as an asset but as something they have to “kill.” Without a job, these young men do not become breadwinners, as expected, but remain dependent on their families. Many continue to live at home, sometimes long after the age of 30, and remain single well into their 40s. Bored and disoriented, their lives are characterized by aimlessness and ennui.

Ironically, it was the country’s youth who propelled Modi to power in 2014. They loved his oratory, strongman image and promise of a “new era of economic development” replete with jobs that would fulfill their aspirations. Yet with each successive year, Modi’s promises have sounded hollower and the youth have become more disillusioned.

In 2019, when results from the national unemployment survey leaked before the general elections, showing unemployment was at an all-time high, the BJP-led government responded by clamping down on the news and canceled the release of the report. This, along with a last-minute announcement promising that 10% of government jobs would be reserved for people from lower-income households, saved them. The threshold, set at household incomes below 800,000 rupees ($9,700) per annum, which includes a large proportion of lower-middle-class families, had obvious appeal among voters.

“People are now getting jobs on the basis of election promises,” said Sanjay Bhagat, the head of Sankalp Tutorials, one of the biggest centers in Varanasi, which tutors over 15,000 students for government job exams. “Just look at any state in India. You’ll see that they announce government vacancies only before elections.” Indian academic Amit Basole calls this the “politics of unemployment,” in which the government approaches unemployment as an electoral rather than developmental issue, and strategically times announcements of recruitment drives and job reservations for electoral gain.

This has sparked protests across various sections of Indian society that have been adversely affected by the government’s affirmative action programs. Communities such as Jats, Gujjars, Marathas and Patels, who are not as disadvantaged as the lowest castes, see themselves as being left behind by the system and have taken to the streets. In 2021, army applicants protested against the government’s Agniveer scheme, which transformed positions in the army from full-time jobs to four-year contractual positions. Last year, individuals seeking jobs in the railway sector demanded that the government prevent those with higher qualifications from applying for posts meant for those with lesser qualifications. The government responded in the only way it knew, by announcing more jobs in the government.

Recently, Modi inaugurated a Global Investors Summit in UP, which is said to have attracted investment proposals worth over 32 trillion rupees (around $396 billion) and has the potential to generate 9.2 million jobs in the state. Mukesh Ambani, one of India’s richest men, said that his Reliance group is planning to invest an additional 75 billion rupees ($916 million) in the next four years, which could provide an additional 100,000 jobs to youth. These are big promises, but the effects are yet to be seen. Glitzy bilateral deals and investor summits attract a lot of attention, but they have a poor track record of effecting genuine change.

Youth unemployment in India is a ticking time bomb. According to the World Bank, almost a third of the country’s youth isn’t working, studying or in training. So the question is, what are they doing? India is teeming with young people and political pandering is not going to solve the problem. Any real solution first requires an acknowledgement of the scale and depth of the crisis. To sum up the situation, Rai quoted the Indian freedom fighter Bhagat Singh, who used to say that if you want to destroy a country, destroy its youth — the country will automatically be destroyed. Bhagat Singh, he said, seems to have predicted India’s future.

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