India’s Youth Unemployment Crisis Runs Deeper Than the Jobless Rate

Youth Unemployment Latest News

• Recent data show that around 9.2 crore young Indians are neither in education, employment nor training, a figure the falling unemployment rate does not capture.

The Official Picture

• The government has often cited the Unemployment Rate (UER) to suggest India is doing well on jobs. 
• The UER measures the number of unemployed people as a share of the total labour force, those currently working or actively looking for work.
• By this measure, the trend looks positive. Data from the Periodic Labour Force Surveys (PLFS) shows the UER falling steadily from 6.1% in 2017-18, a 45-year high, to just 3.1% in 2025, for those aged 15 and above.
• However, relying only on this headline figure obscures three significant problems.

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Problem One: Youth Unemployment Remains High

• Unemployment among young Indians aged 15 to 29 is far higher than the overall rate.
• It fell from almost 18% in 2017-18 to around 10% in 2022-23, but has since stayed stuck at that level.
• More troubling is that unemployment rises with educational attainment. Graduates aged 25 face the highest unemployment rate, close to 40%. 
• This means roughly four out of every ten graduates aged 25 who are looking for work fail to find it.
• Analysis in the State of Working India (SWI) 2026 report by researchers at Azim Premji University found that unemployment among young Indians with education up to graduation or more was actually higher in 2023 than in 1983. 
• Educated unemployment is not new in India, but the situation appears to be worsening over time.

Problem Two: The Quality of Jobs Created

• India’s workforce has undoubtedly expanded. The total number of people employed rose from 43.3 crore in 2017-18 to around 61 crore by December 2025. But a closer look at where these jobs came from raises concerns.
• The SWI 2026 report found that between 2021-22 and 2023-24, India’s employed population grew from 49 crore to 57.2 crore. Employment rates rose from 71% to 74% for men and from 26% to 34% for women.
• However, of the 8.3 crore jobs added in this period, 4 crore were in agriculture, with women accounting for a large share at 3.8 crore. 
• Agriculture is typically low-productivity, low-paying work, and a shift towards it is generally a sign of distress rather than progress.
• The pattern is similar for women’s employment overall. The number of women in the workforce rose sharply from 9.4 crore in 2017-18 to 18.6 crore in 2023-24. But the report notes that the number of women in own-account self-employment has increased nearly fourfold since 2017, while self-employment earnings for women and salaried earnings for both men and women have largely stagnated.
• More people are working, in other words, but not necessarily earning more.

Problem Three: The UER Understates the Problem

• In a developing economy like India, using the unemployment rate to assess labour market stress can be deeply misleading.
• The UER counts only those who are willing to work and actively searching for a job. In India, however, many people who could work do not register in surveys as looking for work. 
• They are therefore counted outside the labour force altogether, and never appear in the unemployment figure.
• As one of the SWI report’s authors explains, this happens particularly with women. Regardless of their education, even after completing graduation, many are not recorded as looking for work, and thus fall out of the labour force entirely.
• If these individuals were counted as unemployed, they would enter the labour force and the unemployment rate would be considerably higher.
• The UER is therefore best understood as the lowest possible estimate of people not being mobilised into the workforce. 
• Beyond it lies a large pool of people outside the labour force, either discouraged workers who have given up searching, or those kept out by social norms, most often women.

The Better Measure: NEET

• A different metric captures this reality more accurately: NEET, or Not in Employment, Education, or Training.
• The logic behind NEET is straightforward. Those pursuing education cannot reasonably be expected to be working. NEET therefore measures how many people are in none of these three categories, not studying, not training, and not working.
• As the SWI report describes it, NEET is a comprehensive measure of labour under-utilisation that excludes those in education or training. It includes not just the unemployed, but also those of working age who are neither in education nor in training nor in employment.

The Scale of the Problem

• According to official PLFS data released in March this year, 25% of Indian youth were classified as NEET.
• Applying this proportion to current population figures produces a striking number. 
• Based on Ministry of Health and Family Welfare projections, India’s youth population in 2026 stands at 36.8 crore, the largest youth population in the world.
• At 25%, this means roughly 9.2 crore young Indians are currently neither in education, nor skilling, nor any form of employment. That is a figure almost equal to the entire population of Iran.

Why This Matters

• The combination of high youth unemployment and an enormous absolute NEET population helps explain the growing youth unrest in the country.
• What makes it more striking is the context. These figures coexist with government satisfaction over the pace of economic growth based on GDP figures, a period some have described as a “goldilocks” phase for the Indian economy.
• The disconnect is the core issue. Headline growth and a falling unemployment rate can both look healthy while a very large share of young people remain entirely disconnected from productive activity.

Source: IE