State of Working India 2026 Report: Key Highlights
Overview
The "State of Working India 2026" report by Azim Premji University highlights significant challenges in job absorption among India's youth, particularly graduates. With 367 million individuals aged 15-29, integrating this educated workforce into the labor market is crucial for India's economic prospects.
Graduate Unemployment
- Nearly 40% of graduates up to age 25 and about 20% of those aged 25-29 are unemployed.
- The problem has persisted due to a sharp increase in graduates, with about 5 million added annually between 2004 and 2023, compared to only 2.8 million employed.
- As of 2023, around 11 million out of 63 million graduates aged 20-29 were unemployed.
- The main issue is the lack of salaried jobs, not education itself.
Job Market Trends
- India added 83 million jobs between 2021-22 and 2023-24, but nearly 40 million were in agriculture, indicating a trend towards informalization.
- Much of the increase came from women entering self-employment or agriculture with low earnings.
- Salaried earnings and the graduate earnings premium have stagnated, suggesting a mismatch between graduate supply and job creation.
Education System Challenges
- Expansion of higher education institutions from 1,644 at the time of liberalization to over 70,000 today has often compromised quality.
- Many graduates lack market-relevant skills, and regional disparities persist, with states like Bihar and Jharkhand lagging.
- While access to higher education is more democratized, financial barriers remain, with wealthier students dominating high-paying fields.
Social and Policy Implications
- Caste- and gender-based occupational segregation has declined, and migration has increased as young people seek opportunities in more developed states.
- India's employment challenge involves not just job creation but ensuring quality jobs.
- There is a need for better alignment between education and industry demand, enhanced vocational training linked to local industry, and improved job-matching systems like the National Career Service.
- The manufacturing sector's underperformance is a key factor in job creation challenges.
- The report underscores the importance of translating educational enrolment into employment as India's demographic dividend approaches its peak around 2030.
