Phantom Factor behind Unemployment: Employability Crisis caused by Higher Education in India

The overall unemployment rate in India was 9.2 percent in June of 2024. A majority of economists highlighted unemployment to be the biggest worry of the world's fastest growing large economy. Analysis from a traditional perspective which focuses on macroeconomic issues may highlight lack of opportunity, skewed population and the fiscal situation as reasons to which this unemployment may be attributed. One of the key elements in the unemployment rate is the employability (crisis) of Indian graduates.

To eliminate any ambiguities, let’s define employability as possession of simple skills which are deemed to be necessary for obtaining, sustaining and excelling in a job. It has now become a fairly studied phenomenon with the current economic survey of India as released by the ministry of finance highlighting an interesting trend in the employability rate, which refers to the percentage of graduates who are deemed employable. The employability rate currently stands at 51.3%, it was just 33.9% a decade ago. We must applaud the growth in the rate, yet a ratio of 51.3% is still alarmingly low. What are the causes that are driving this high unemployability rate?

 Reports often blame the quality of education in India, with a rising number of voices suggesting that college courses actually lack the training of any employable skills. The issues in quality of education is exacerbated in fields such as management and engineering where employers keep finding their recruits under-skilled. The trend regarding the lack of skills crucial to employment is also critical when it comes to male-female disparity as women are more likely to be unemployed than men, making their entry into the workforce even more difficult. We can tackle the unemployment rate by correcting these structural issues: the lack of employability skills in the youth workforce. The same can happen through altering the higher education system and the pedagogy in it.

Another aspect of the same remedy is upskilling of the workforce and giving them hands-on training for industry-relevant skills. While the government has surely addressed this area of intervention, it is crucial that the intervention, its planning and implementation happens in a robust manner. A multidimensional approach, which integrates skill inculcation, tailors higher education course structure and aims to achieve the industry expectations, is the need of the hour as it will focus not only on skills training but also on improving the quality of education, both of which we shall explore further.

We must inculcate technical and vocational education in the domain of higher education in India. With rapid economic growth, most new employment opportunities that are being created have a huge demand for technical skills and employers are often found complaining about the lack of skills.

Interestingly enough, the New Education Policy (NEP 2020) actually attempts to tackle the crisis under the “Reimagining Vocational Education and Skill-building” section of the act where there are various provisions such as formalisation of ‘LokVidya’ and making the National Skills Qualifications Framework more detailed in order to fit the growing demand. When it comes to the formalisation of LokVidya, the scheme aims to provide training to students with vocational indigenous skills, integrating training under local experts with internships. While it is too early to comment on the scheme, there exists a considerable gap in its idea of how to tackle the crisis with other technical skills, which are beyond the ambit of the scheme and when it comes to those skills within the scheme, there can be doubts if those skills are relevant to the modern, technologically superior world. While handling technical skill education, the industry-academia collaboration that has been advocated for decades now, can focus beyond connections of the placement cells of university and rather give suggestions to the academic board that actually makes the curriculum and the pedagogy of the degree/course that the students pursue. This collaboration and implementation of the suggestions in itself might be a significant step as it ensures that the students turn out to be more employable and are not overburdened with industry-irrelevant workload.

Furthermore, the move of the government to introduce more apprenticeship/internships also logically appears to be a great attempt at upskilling. Though it must be highlighted that the specifics of the government scheme, with the ambitious targets that the recent financial budget has set, are still unclear. By exposing the students to hands-on learning experiences, we allow them to not only interact with the realities of the workforce but also enable them to grasp the requirements to excel in the workforce and ultimately learn and acquire those skills. Additionally, the industry must enter into collaboration with the government and extend the platforms like swayam for courses that the students can do simultaneously with the internship program.

While implementing the government scheme on internships, it is crucial to have scrutiny that the students as interns are actually given tasks that match or are congruent to a reasonable extent with the job description. Interns are often given menial work or tasks that are completely unrelated to their actual profile, with a majority of such tasks being marketing-related work. Since students are threatened with not receiving an internship certificate, they end up succumbing to such pressures and end up wasting precious time. Such practices might be counterproductive for the workforce and the government must ensure that such activities are avoided.

While the aforementioned strategies will play their role in solving the crisis, there are new challenges that we might face in the near future - the challenge of advancing technology and more particularly, artificial intelligence and the advent of large language models (LLMs). There exists an ongoing debate as to whether these advancements will replace jobs, reduce jobs or add jobs, with proponents of each possibility having their fair rationales. The debate will not end anytime soon, we must be prepared for either outcome. One of the potential plans is to equip the students with the ability to effectively utilise these LLMs and learn how to incorporate them in their work through training in prompt engineering, without making them dependent on these LLMs. This will not only boost their employability, but on a larger scale will act as a shock-absorber for the economy, if something drastic appears in the technology domain. This will require not only skilled trainers but also sound infrastructure to support these trainings along with considerable scope for increase in power demands as these technologies have an intense use of energy. While this particular challenge may not be our top priority currently, we have to move in that direction soon.

To conclude, while the government has created plans to tackle the situation, there is a considerable scope for making the plan more detailed and sensitive to changes in the skill demand in the job market. It is in proper implementation of this plan that we hold the key to solve the issue of unemployment.