India’s famed demographic dividend has curdled into a nightmare of underemployment. Tens of millions of young graduates churn out of colleges every year, only to find no suitable jobs. Instead, the highly educated are forced into menial posts. In 2025, for example, 24.76 lakh candidates (including dozens of PhDs and MBA graduates) applied for just 53,749 peon (office attendant) positions in Rajasthan. In neighbouring Haryana, 18 lakh youths competed for 18,000 low-level government vacancies, and 25 lakh for 6,000 clerks.
Even a single sweeper vacancy in Haryana drew nearly 40,000 applicants (including 6,112 with postgraduate degrees). In Uttar Pradesh, over 93,000 people – among them 3,700 PhD holders and 28,000 postgraduates – vied for just 62 messenger jobs that require only a fifth-standard pass. Such extreme oversubscription is now routine: two million candidates once queued for 1,100 Mumbai police posts; 12.5 million applied for 35,000 railway jobs. The numbers are chilling: millions of graduates literally out-number job seats by dozens.
These queues of applicants – often including engineers, doctors, lawyers and PhDs – speak to a broken system. As former RBI governor Raghuram Rajan recently noted, “19 million [19,000,000] applying for 60,000 railway jobs… PhDs applying for peon positions” exposes a labor market that is “simply not creating enough jobs”. In other words, even a top degree no longer guarantees a white-collar job. One frustrated aspirant summed up the desperation: “If nothing else works out, even a peon job is better than staying unemployed”. Another young woman, despite a master’s and BEd, said she’d rather “serve even water” in a government office than miss the chance of any secure job.
Shocking statistics: Over 20 million Indians once applied for ~100,000 railway posts; 2 crore (20 million) applied for about 1 lakh jobs. In Rajasthan’s 2025 exams, 129 engineers, 23 lawyers, one chartered accountant and 393 postgraduates turned up to interview for peon posts. In Haryana, 5,700 graduates and postgraduates were in the running for 13 peon/chowkidar vacancies. Such figures – documented in news reports and Right-to-Information disclosures – are hard to fathom outside India. They capture a mass misallocation of talent and hint at deep systemic rot.
A Broken Pipeline: Failed Schools and Vocational Training
The root of the crisis lies in India’s education and training system. Schooling has failed millions. Surveys find that barely 25% of Indian third-graders can perform basic subtraction they should have mastered by grade 2. By high school, the gap widens further: a large fraction of students graduate virtually innumerate. In effect, many children enter the workforce without basic literacy or numeracy. As one analyst bluntly observed, if most high-schoolers struggle with simple math, expecting them to handle industrial or technical jobs is fantasy. The education pipeline (especially government-run schools) is “particularly bad,” as even Bloomberg–Economics Times warns.
Vocational and technical training – the supposed bridge from school to industry – is equally dysfunctional. India boasts over a thousand Industrial Training Institutes (ITIs) and polytechnics, but their graduates rarely find jobs. Government think-tanks concede that less than 0.1% of ITI trainees were recorded as placed by companies. State reports confirm similar failure: for instance, in one year 2 out of 7,634 ITI trainees in Haryana got placed, and only 2 of 3,137 ITI graduates in Odisha were employed by industry. In effect, most ITI programs leave graduates adrift. Critics say most courses are outdated, with no real ties to employers. Without active campus placement or industry partnerships, an ITI certificate is more paper than pathway.
Even when Indians do acquire marketable skills, rewards are low, blunting incentives. The Labour Bureau’s wage survey finds that a skilled machinist in auto manufacturing earns only about 20–25% more than an unskilled factory hand. In other words, the premium for training is meager. High school graduates and some college-educated workers often receive nearly the same pay as those with no education. Why invest years and money in extra schooling when the pay-off is so small? This wage compression means many graduates see no economic benefit to skilling up. They’d rather queue for secure government jobs than pay tuition for uncertain private-sector gains.
The Human Toll: Despair and Anger
Behind the statistics lie anguished human stories. Many educated youth speak of heartbreak and shame. In Mumbai, 27-year-old biology graduate Mahesh Bhopale described living on odd jobs while cramming for exams. “Our only way out of this life is to get a government job,” he said, adding that it would finally let him “get married and start a family”. Another applicant complained, “Educated people from villages like us can’t get high-paying private sector jobs,” so a government position – however lowly – is the dream.
The despair can be soul-crushing. In New Delhi, a college student protesting high unemployment carried a heartbreaking plea: her mother Saraswati told reporters that her daughter Neelam often said, “I should just die – as despite studying so much, I am unable to earn two meals”. The sense of futility is palpable. Hundreds queued for menial jobs carrying graduate degrees; others weep in front of their families, blaming themselves for wasted years. Suicide attempts over joblessness are reported, and even those with elite qualifications (pharmacists, MBAs, doctors) have applied for cleaning and clerical roles.
Frustration also turns to anger. In December 2023, Delhi students set off smoke canisters in Parliament, chanting “down with unemployment,” and one mother tearfully told media: “We have all these degrees, and they lead to nothing”. Protests have turned violent at times: in 2022 dozens of unemployed graduates attacked government offices and even torched train coaches in fury over a cancelled exam scheme. One analyst notes this tinderbox of anger helps fuel illegal migration: young Indians increasingly risk smugglers or harsh foreign jobs in desperation.
Why the Mismatch? Private Sector and Policy Failures
Part of the puzzle is that private industry hasn’t risen to the challenge. Even with India’s rapid GDP growth (~8% in late 2023), companies complain they can’t find reliably skilled workers. It’s not (just) about wages: as the Economist warns, firms say “there are too few people to hire,” meaning graduates lack the talents industry needs. In manufacturing, for instance, many line roles remain unfilled because young workers lack training or basic work-readiness. A survey in Haryana found engineers hired to run machines, only to discover half didn’t know how to start them. One business leader quipped that if India hopes to become “the next China,” it must first stop producing millions of unemployable graduates.
India’s own think-tanks and policy-makers admit the failure of Skill India schemes. An RTI-disclosed report showed that although 1.6 million youths were certified under government skilling programs in FY2018, fewer than 30% of them found any job. In FY2017 the placement ratio was barely over 50%, and it fell sharply to under 30% in FY2018. In other words, only 3 in 10 Indians trained under flagship schemes actually landed employment. This abyss between training and jobs highlights wasted spending and misplaced priorities: taxpayer money is dolled out for courses, but there’s no mechanism to absorb graduates into industry.
Instead, the Indian job market has bifurcated. Government and public sector jobs – though few – are coveted for security and perks. Private jobs, by contrast, pay poorly and come with no benefits. One young woman said bluntly: “Private-sector jobs don’t pay enough to make up for the insecurity.” (CFO editorial) With minimal social security (no unemployment insurance, few labor rights), an unstable job can mean poverty.
Thus millions of degree-holders persistently chase the scarce government vacancies (railways, police, clerical work) because those few jobs promise health cover, pensions or at least a fixed salary. Even a Bihar assembly peon earns roughly ₹20,000 per month – more than many private clerks – making such roles irrationally popular. The sheer volume of applicants shows just how outsize people value any state gig, no matter how low.
Government policies have so far missed the mark. Recently the Modi administration rolled out an “employment-linked incentive” (ELI) scheme: companies hiring new workers get ₹3,000/month for two years (₹4,000 for manufacturing) plus social-security contributions. But economists scoff that this $40 monthly per employee subsidy is a drop in the ocean. It presumes labour cost is the only barrier, when in reality firms say they have no suitable hires at all.
The RBI Bulletin notes 80% of jobs are in the informal sector, unmonitored by official data; without structural reform the ELI seems window-dressing on a much larger crisis. Experts argue the government needs a comprehensive social safety net and education overhaul to make risky private-sector skilling attractive. Subsidizing employers by a few dollars a month won’t suddenly create millions of skilled positions.
A Pan-India Crisis with Regional Flavors
This mismatch is nationwide, though some regions suffer more. Official surveys (PLFS 2023–24) show 10.2% youth unemployment overall, versus ~3% official all-ages unemployment – revealing the youth gap. Certain states stand out: for example, Kerala’s youth unemployment is astoundingly high (~30% overall, with young women at 47%), far above the national average. Northeastern states (Nagaland 27%, Manipur 23%) and Punjab (~19%) also top the charts. Even some wealthier states like Gujarat (18%) and a union territory like Lakshadweep (36%) face huge rates.
In contrast, booming tech hubs like Maharashtra or Karnataka (home to Bangalore) have somewhat lower youth joblessness, but still two to three times higher than overall unemployment. Rural India, too, sees worse outcomes: many farmers’ children get degrees but end up in agriculture or migrating. Urban slum-dwellers with diplomas often find only odd jobs. The state breakdown reveals no corner of India is immune.
From Punjab’s farm belt to Tamil Nadu’s cities, the same story recurs: highly qualified youth unable to secure appropriate employment. Local languages add flavor: a young man in Haryana complained of graduating from IIT but fixing bicycles for a living, lamenting that even his engineering skills find no value in the market. A Telangana MBA graduate told reporters she ended up filling water coolers at a government office in Hyderabad, because “a government job, any government job, was our family’s last hope.”
Key data points by state: Kerala (~30% youth joblessness) and small UTs top the list. Large states with many youth (e.g. Uttar Pradesh, Bihar, West Bengal) have slightly lower rates (5–10%) but far more absolute unemployed youth. Rajasthan and Haryana showed up in media as epicenters of “degree-holder for peon” mania. In Odisha, an RTI found only 2 of 3,137 ITI trainees got placed – suggesting that Eastern states’ skills infrastructure is in tatters.
International Perspective: China and Germany
India’s predicament is not universal, and international comparisons highlight its unusual failure. Both China and Germany have also faced youth unemployment issues, but they responded differently. For decades Germany’s vaunted dual apprenticeship system – combining classroom theory with on-the-job training – has kept its youth unemployment very low (~6–7% in 2024) and its skilled workforce robust. German industry actively partners with schools, so vocational graduates seamlessly move into jobs. Countries emulating Germany have seen lower youth joblessness: robust apprenticeships translate into well-matched jobs.
China, by contrast, has recently begun a massive push to upgrade skills. Facing an aging population and shifting industries, Beijing has launched an unprecedented training drive – aiming to upskill 30 million workers by 2027. The goal is two-fold: fill labor gaps in high-tech manufacturing, and provide second-chance training to displaced workers. China’s program links vocational certificates to wages, making trade skills more attractive. India, by comparison, has no similar national campaign; its vocational budgets remain a tiny fraction of GDP.
Yet the problem in China is also serious: in 2024 over 12 million Chinese graduates entered the job market (versus ~13 million in India). Both countries face slack growth in manufacturing jobs even as workforces expand. The South China Morning Post warns that “mass unemployment” is actually worse in India than China. Ironically, China’s state-led approach may help avoid India’s fate – by vastly scaling training and linking it to industry demand, it may prevent millions of underemployed graduates. India, with its limited safety net and piecemeal policies, is already seeing the flipside: educated youth stuck without productive outlets, creating social strain.
In short, neither superpower model has rescued India: it lags behind Germany’s efficient matching and has not even tried China’s mobilization. Instead, policies have favored big industrial projects (solar panels, chips subsidies, auto factories) that are capital- and capital-intensive but create few jobs. Meanwhile, millions of college graduates are left idle. As one demographer puts it, the “dividend” of having so many working-age people is worthless unless jobs for them appear. India’s track record on that count has been abysmal.
Voices from the Ground
“We have these degrees, and they lead to nothing.” This refrain emerges again and again from India’s educated unemployed. Take Kamal Kishore (M.A., B.Ed.) from Rajasthan: he has passed multiple teaching exams but is still jobless. “I have even done IT courses,” he told reporters, “but if nothing else works out, even a peon job is better than staying unemployed”. Young women like Tanuja Yadav (M.Sc.) and Sumitra Chaudhary (M.A., B.Ed.) echo this: they are preparing for elite civil service posts but also apply for peon work – “just in case”, for the security it brings.
A 34-year-old man named Ganesh Gore lamented after his fifth civil service failure: “No party or politician helps us out; they are sitting there to eat money”. He and many others feel abandoned by leaders even as the economy grows. If hopeful graduates vent frustration in Parliament or on streets, it’s because they perceive total neglect. Another youth told The Economic Times bluntly: “Educated people from villages… can’t get high-paying private jobs. A government job is the best kind of job”.
Ranganath Ramakrishnan of TISS university explains it: India’s new jobs have mainly been in agriculture and informal sectors, not in skilled industry. So educated youth rush into the frenetic chase for the few stable government roles. They see peers migrating illegally abroad or taking perilous work in war zones. Just this year, thousands queued to apply for labour jobs in war-torn Israel. It’s a grim testament to their desperation that even conflict-zone work appears attractive compared to back-breaking jobs at home.
At the end, all we are doing is wasting a generation…
India’s case is both tragic and outrageous. Here is a nation with millions of young graduates – and no place for them to go. The educated are treated as collateral damage in a growth story that boosts GDP but not incomes for the many. Children slog through 12 years of schooling only to emerge underqualified for industry and overqualified for the jobs on offer. Parents invest in degrees hoping for upward mobility, yet see their children sulk under piles of unpaid exam applications.
Without urgent change, India risks squandering its best chance at prosperity. The talent of its youth is wasted – PhDs picking tea, engineers pushing brooms. Regional unemployment data and personal stories alike reveal a pool of human potential leaking away. In other countries, such a quagmire might have triggered nationwide reforms decades ago. In India, it has instead become a haunting normality.
