Why in the news?

• In India, only around 42.6% of graduates are deemed employable- a figure that goes beyond mere statistics, revealing a deeper structural fault in the education-to-employment system.

Employability Crisis in India

• What is it?: The employability crisis reflects a significant gap between the skills of the workforce and the requirements of the job market, leading to high unemployment and underemployment, especially among educated youth.
• Causes of Employment Crisis:
  • Skill Mismatch: Graduates lack industry-relevant technical and soft skills, making large numbers unemployable.
    • About 80% of engineering graduates lack employable skills as per Mercer Mettl India Graduate Skill Index 2025.​
  • Educational Shortcomings: The outdated curriculum, poor integration of industry needs in education, and low focus on vocational training worsen the employability scenario.
    • NEP 2020 reforms have not fully addressed these issues.​
  • Economic Factors: Slow industrial growth and insufficient job creation in manufacturing limit opportunities.
    • The agriculture sector is seasonal and low productive, providing temporary employment to a large part of the workforce.​
  • Technological Disruption: Automation and artificial intelligence reduce traditional jobs and demand advanced skills, increasing unemployment risk for those not upskilled.
  • Labour Market Pressure: Rapid population growth adds millions of job seekers annually, intensifying competition in a job-scarce market.
    • Youth workforce entry is about 70-80 lakh per year.​
  • Barrier to Accessibility: Problems like caste discrimination, poor communication skills, and lack of transport particularly affect marginalized groups’ employability.
• Impacts:
  • Unemployment Issues:
    • High educated unemployment, with statistics showing many engineering and professional graduates unable to find suitable jobs.
    • Female unemployment is notably high; about one in five educated women remain unemployed.
  • Economic Impacts:
    • Stunted growth of the industrial sector as well as its impact on GDP.
    • Wage stagnation for fresh graduates.
    • Low-quality jobs in informal sectors, and psychological stress leading to social issues.
  • Political Impacts:
    • Rising brunt of unemployability could lead to anti-government sentiments.
    • It could lead to emigration of unskilled labour to abroad.
• Remedies and Way Forward:
  • Skill Development: Promote skill-building programs aligned with industry demands, including digital and technical skills in emerging sectors.​
  • Education Reform: Modernize curriculum, strengthen vocational training, foster industry-academia partnerships, and encourage practical learning.​
  • Boost Industrial Growth: Spur manufacturing and service sector expansion to create scalable job opportunities.​
  • Encourage Entrepreneurship: Promote startups, MSMEs, and provide easier access to finance to create self-employment opportunities.​
  • Technology Leverage: Use technology for job creation and facilitate lifelong learning and upskilling. And inclusion of AI and Machine Learning.
  • Policy Support: Government policies to incentivize job creation, support informal sector formalization, and strengthen social safety nets.
• Initiatives of GoI:
  • Skill India Mission (2015): Umbrella for PMKVY, Jan Shikshan Sansthan, and National Skill Development Corporation.
  • National Education Policy (NEP) 2020: Emphasises experiential learning and industry linkages.
  • PM Vishwakarma Yojana: Upskilling traditional artisans.
  • Digital Skill Hubs and Gati Shakti Vishwavidyalayas: Promoting sector-specific skills (logistics, railways, etc.).
  • NAPS & NATS: Apprenticeship programmes integrating skill training with employment.