Young, educated, and jobless: Is India’s unemployment crisis ‘waiting to explode’?

Prime Minister Narendra Modi is under growing pressure to create jobs, particularly for India’s educated youth.

After months of rising unemployment and higher-education scandals, some young Indians say they’re losing faith in getting ahead through merit. And some opposition leaders say India could be heading in the same direction as Bangladesh. 

Neighboring Bangladesh has been wracked by weeks of violent protests, led by students frustrated by limited job prospects. Both India and Bangladesh face persistent unemployment and inequality despite overall economic growth, and until this week, both were run by long-ruling prime ministers who’ve been accused of authoritarian practices in recent years.

“What happened in Bangladesh … has given a message to people in power,” said Uddhav Thackeray, former chief minister of Maharashtra, after Bangladesh’s prime minister fled the country. “Don’t test the patience of people.”

Mr. Modi’s ruling Bharatiya Janata Party (BJP) has described such comments as incendiary and even anarchist, and political analysts note there are important differences between India and Bangladesh, including the former’s size and sprawl. Nevertheless, jobs are a major part of Mr. Modi’s platform; his government’s recently proposed budget includes $24 billion for job creation over the next five years.

“The situation [in Bangladesh] does put pressure on the government to address the employment issue more carefully, which they have not been doing effectively,” says economist Arun Kumar, who calls the budget announcement “more of a show.”

But for him, watching both countries grapple with similar issues highlights the relative strengths of India’s democracy. Compared with Bangladesh, where the opposition boycotted the most recent elections citing political suppression, India has a robust opposition and more freedom for dissent.

“In Bangladesh, a combination of factors created an explosive situation, something that has not yet occurred in India,” says the retired Jawaharlal Nehru University professor. “While unemployment in India is acute and the youth are frustrated, there are still avenues for expression.”

Employment crisis on the brink?

Unemployment has exceeded 5% every month this year, reaching an eight-month high of 9.2% in June before dipping to 7.9% in July, according to the Centre for Monitoring Indian Economy. This was a key issue for voters during India’s recent general election; a prepoll survey by the Delhi-based Lokniti-Centre for the Study of Developing Societies found that 62% of respondents believed finding a job had become harder compared with five years ago.

It’s a burden young people feel acutely. The India Employment Report 2024, released by the International Labour Organization and the Institute for Human Development in March, found that India’s youth comprise nearly 83% of the unemployed workforce. The proportion of unemployed youth with secondary or higher education nearly doubled, from 35.2% in 2000 to 65.7% in 2022.

Mr. Modi’s supporters have dismissed this data as misleading. BJP spokesperson Syed Zafar Islam said at a recent press conference that India is a leader in job creation, citing the latest Reserve Bank of India report, which states that 50 million jobs were created in 2023-24 alone.

International Monetary Fund Executive Director Krishnamurthy Subramanian has also pushed back on the idea that young people are unhappy with India’s job market. “There is no doubt that we need to create more jobs, that is because we are a young population,” the former chief economic adviser told The Quint this week. “But just because there is an emphasis on employment and job creation does not mean in a binary manner that jobs are not being created. … That’s important to keep in mind.”

Indian economist Jayati Ghosh accuses the Modi government of manipulating data to meet political objectives. She describes the unemployment crisis in India as “waiting to explode,” citing a jobless growth economy where the gross domestic product increases but the employment rate does not. 

She says students sell family assets and take loans to obtain degrees and diplomas, “only to find that there are no jobs available for the 10 [million] to 15 million graduates” entering the workforce each year. And this year, that desperation was exacerbated by cheating scandals that disrupted India’s extremely competitive undergraduate and postgraduate entrance exams. 

Trust wanes in exam system

Arpna Mishra is preparing to take one of the biggest exams of her life – again. 

In late June, Dr. Mishra made the hours-long bus ride to Chandigarh, India, where she was scheduled to take the National Eligibility cum Entrance Test (NEET) for postgraduate medicine. But when results from the undergraduate version of the NEET showed an unusually high number of perfect scores and other signs of exam tampering, the National Testing Agency was forced to cancel her test the night before, derailing the plans of more than 228,000 candidates. 

“When corruption or controversies like this occur, it puts our degrees at risk,” says Dr. Mishra, who currently works in a government hospital but hopes to secure a better job by specializing in her field. “No doctor wants their qualifications questioned. … It’s disheartening.”

The scandal and subsequent investigations resulted in over a dozen arrests across states, the removal of the testing agency chief, and weeks of uncertainty for more than 2.5 million test-takers.

This isn’t the first time government-run exams have been caught in cheating scandals, and though Dr. Mishra’s exam was eventually rescheduled to Aug. 11, the incident has further eroded trust in India’s higher education system. 

Students’ “distrust is fueled by experiences where they’ve seen examinations being manipulated and rigged,” says Professor Apoorvanand Jha, an Indian political academic and author. Still, many see the NEET as their only chance to succeed – an environment that, in turn, encourages cheating. 

“There is so much unemployment that students even bribe officials to clear such tests,” says Vishal Kumar, who is jobless after finishing his bachelor’s degree in commerce and marched with other students last month demanding the resignation of India’s education minister. “The government needs to control it by strengthening the laws.”