India graduate job mismatch- Overlooked Problem
Imagine spending years earning a degree, only to end up working in a job that doesn’t require it. This is the harsh reality for a majority of Indian graduates today. According to the latest report by the Institute for Competitiveness, only 8.25% of Indian graduates are working in roles that match their qualifications. Shockingly, more than 50% are in lower-skilled jobs, performing tasks far below their education level—clerks, salespeople, machine operators, and the like.
These are not just numbers; they reflect widespread frustration, wasted potential, and untapped opportunity. Graduates, who are supposed to be our future leaders and innovators, are being underutilized, which is deeply concerning for economists, educators, and policymakers alike.
Understanding Skill Levels: When Education Doesn’t Equal Employment
India uses the National Classification of Occupations (NCO) to rank jobs by skill levels—1 through 4. Ideally, someone with a higher education degree should be in a Level 3 or Level 4 job. But the Periodic Labour Force Survey (PLFS) paints a different picture.
Take Skill Level 4, for instance. It includes highly skilled professions that demand strong educational credentials:
- 63.26% of people in these roles are appropriately qualified.
- But 38.23% of graduates are still stuck in lower-skill jobs.
- An alarming 28.12% of those in Skill Level 4 jobs are overqualified or working beneath their potential.
The pattern continues at Skill Level 3 as well, where a majority of graduates are overeducated for the work they do. These mismatches point to a serious inefficiency in how India uses its educated talent.
When Underqualification Meets Underemployment
It’s not just the overqualified who face issues. At the other end, 8.56% of workers in Skill Level 2 jobs lack the necessary formal education. These individuals may have gotten by with on-the-job learning or informal training, but they lack certification and career progression.
This is where Technical and Vocational Education and Training (TVET) could play a transformative role. However, many TVET programs lack reach, quality infrastructure, and consistent standards. Unless this is addressed, the system will continue to churn out workers without a proper career path or future.
State-by-State Divide: Where the Gaps Run Deepest
India’s youth population is massive—650 million under age 25. But the opportunities and educational outcomes vary drastically from one state to another.
- States like Uttar Pradesh, Bihar, Madhya Pradesh, and West Bengal—which have the largest youth populations—face the greatest mismatch between skills and job opportunities.
- Bihar and Meghalaya still have 60%+ of their workforce in the lowest education category.
- By contrast, Goa and Kerala have far fewer people stuck at Skill Level 1, pointing to more effective education systems.
The danger here is clear: unless reforms are state-specific and targeted, populous regions will suffer brain drain, underemployment, and missed industrial opportunities.
Progress in Primary Education, But Not in Higher Learning
Thanks to programs like Sarva Shiksha Abhiyan, Midday Meals, and NIPUN Bharat, India now has an impressive primary Gross Enrollment Ratio (GER) nearing 100%. But the momentum doesn’t always continue into higher education.
Some regions like Lakshadweep have seen enrollment drop by 90% over a decade, while West Bengal, Kerala, and Jharkhand show promise—especially in female education. These shifts highlight the regional and gender-based disparities that must be addressed if India is to fulfill its education and employment goals.
The Economic Cost of Getting It Wrong
Only 2.17% of Indians have credentials aligned with Skill Level 4 roles. In stark contrast:
- Chandigarh leads with 11.21%.
- Uttarakhand follows with 4.99%.
- But states like Bihar (0.45%), Jharkhand (0.70%), and Odisha (0.87%) are dangerously far behind.
This gap isn’t just academic—it’s economic. Transitioning to higher skill levels could increase individual incomes by 149% and significantly boost India’s GDP. But this requires systemic reform.
The report suggests that India must increase its education spending from 3.06% to 4.89% of the total budget and close an ₹88,000 crore funding gap in higher education. Without this investment, progress will remain out of reach.
The Way Forward: What Needs to Be Done
To truly address the talent mismatch, the report recommends four urgent steps:
- Improve Skill Data Collection – To make policy more responsive and adaptive.
- Regular Skill Gap Analyses – Through Sector Skill Councils and State Missions.
- Update NCO Codes – To reflect the rise of new professions and industries.
- Integrate NCO with PLFS – At a deeper, 4-digit level for precise mapping.
A Race Against Time
According to UNFPA, by 2046, India’s elderly will outnumber children under 15. That means the demographic dividend we enjoy today is short-lived. We must act now to:
- Align the education system with industry needs
- Reform TVET to bridge underqualification
- Customize solutions for high-population states
- Prioritize women in higher education
If not, 90% of India’s workforce may remain stuck in low-skilled jobs, unable to support India’s ambition of becoming a global economic leader.
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