By Kuldip Sarma.
For years, India’s demographic advantage has been spoken of with optimism. A young population. A growing economy. Expanding industries. On paper, the conditions appear ideal. And yet, beneath this promise lies a contradiction that can no longer be ignored.
India is not running out of jobs. India is running out of job-ready people.
This is not a future concern waiting to surface. It is an ongoing challenge, already visible across sectors and regions. Employers struggle to find talent that can perform from day one, while millions of educated young people struggle to convert degrees into meaningful employment.
What the Data says
The “India’s Graduate Skill Index 2025” report by Mercer Mettl, states only 42.6 percent of Indian graduates are employable as per the existing industry standards. Although there has been some progress in the niche areas of artificial intelligence and machine learning, the level of preparedness is still unbalanced. Technical knowledge exists, but application, problem-solving, and communication skills often do not.
A TeamLease Edtech assessment paints an equally sobering picture. Nearly three out of four higher education institutions in the country are still not considered industry-ready. Fewer than 20 percent of students secure stable employment within a reasonable period after graduation. This is despite the fact that India adds over ten million graduates to the workforce every year.
Even large-scale government skilling efforts reveal the same gap. Since its launch, the Pradhan Mantri Kaushal Vikas Yojana has trained more than 1.6 crore youth. Yet official figures show that less than 15 percent have transitioned into formal employment. The issue, clearly, is not participation. It is conversion.
Why this gap persists
The problem goes deeper than curriculum gaps or outdated syllabi. At its core, India’s education system has historically prioritised content delivery and examinations over capability and application. Degrees became endpoints, not pathways.
Only 27 percent of engineering graduates are deemed employable in core engineering jobs, as per a survey conducted by the Confederation of Indian Industry (CII). About 60 percent of employers also state that new recruits are not equipped with the basic skills required to be work-ready in areas such as communication, teamwork, and problem-solving.
Additionally, the problem is not only faced by young graduates. A large number of the existing workforce in India is also suffering from skill stagnation. Technological advancements are making some skills redundant while new skills are emerging that were not part of the formal education system even a decade ago. This is leaving the existing talent untapped.
Why job readiness matters more than ever
For industry, it slows growth and innovation. Productivity suffers when organisations invest months training new hires before they can contribute meaningfully. For the youth, especially those from rural or disadvantaged communities, it results in underemployment and early labor market disengagement. Economically, it reduces India’s ambition to be a leader in high-value areas such as advanced manufacturing, digital services, clean energy, and emerging technologies.
Job readiness in today’s world is not merely about skills. It is about judgment. It is about flexibility. It is about the capacity to learn and apply that learning in new contexts.
The global workplace training industry’s expansion to nearly USD 401 billion in 2024 reflects the scale of the skill gaps that organisations worldwide are struggling to mitigate. Micro-credentials and modular learning pathways have become essential, particularly in domains where change is rapid and continuous.
More tellingly, the rise of this sector reveals a structural lacuna in higher education itself. Industry is now being forced to do the job that universities and colleges were meant to do: translate education into employability and make talent truly industry-ready.
Rethinking how we prepare talent
The solution does not lie in creating more degrees or launching more short-term courses in isolation. It lies in reimagining education itself. It lies in addressing the long-standing issue of skill-mismatch.
Skill-focused institutions must be strengthened. Conventional Higher Education Institutions must move from theory-heavy models to learning systems grounded in application. Industry consultation for curriculum innovation, projects at industry settings, apprenticeships, and outcome-based assessments for technical proficiency must become the norm rather than an afterthought.
Equally valuable are human and life skills. Communication, critical thinking, teamwork, and resilience are not “add-ons.” They are core employability skills. Without them, technical ability alone is insufficient.
The role of teachers in building employability
The most influential enablers in job readiness are teachers. However, the All India Council for Technical Education (AICTE) surveys indicate that up to 80 percent of teachers have limited interaction with the current practices of the industry.
When teachers understand the skill-to-job connection, they can identify students’ potential early on, mentor them, and create learning experiences that reflect the realities of the job world. Job readiness is thus incorporated into the learning process from the very start, rather than being an afterthought.
Policy, NEP 2020, and the way forward
The National Education Policy 2020 offers a strong foundation for the skill shift. The focus on multidisciplinary education, work experience, flexibility, and lifelong learning is very relevant to the realities of the current job market. Pilot initiatives based on NEP 2020 have demonstrated that women’s participation in the workforce can be increased by 10-15 percent and rural youth employment success by 25 percent.
By removing the rigid boundaries between academic and vocational streams, NEP 2020 recognizes that employability is a process that occurs over a period of time and through different and practical learning experiences. The emphasis on early skill exposure, multiple entry and exit points, and recognition of prior learning provides room for inclusion and mobility.
Government skilling programmes must now build on this intent by strengthening industry partnerships, improving placement mechanisms, and ensuring that outcomes, not enrolments define success. Special focus is needed for women, rural youth, and marginalised communities, for whom skills can be the most powerful tool of social mobility.
Afterword
India’s next talent crisis will not be defined by unemployment numbers alone. It will be defined by whether our people are prepared to contribute meaningfully to a changing economy. If India does not prepare its workforce for the challenges of today and tomorrow, the country will miss out on opportunities, growth will come to a standstill, and inequality will widen.
The solution is simple: together, the education, industry, and government sectors can turn this problem into an opportunity. By integrating skills, flexibility, and opportunities into the learning process, India can ensure that the demographic dividend is a legacy of productivity and prosperity.
– The author is the Co-Founder & Pro-Chancellor, Medhavi Skill University
DISCLAIMER: The views expressed are solely of the author and ETEducation does not necessarily subscribe to it. ETEducation will not be responsible for any damage caused to any person or organisation directly or indirectly.
