India’s economic narrative often revolves around unemployment—the stark reality of millions unable to find jobs. With a labor force of over 500 million and a youth unemployment rate hovering around 23% (as per recent CMIE data), it’s no surprise that joblessness dominates headlines. But lurking beneath this crisis is another, less discussed issue: underemployment. While unemployment leaves people jobless, underemployment traps skilled workers in roles that underutilize their education, skills, and potential. It’s a systemic failure that raises tough questions about India’s education system, industry demands, and societal priorities.
The Scale of Underemployment
Underemployment is harder to quantify than unemployment, but its impact is no less profound. It manifests in two primary forms: visible underemployment (working fewer hours than desired) and invisible underemployment (working in jobs that don’t match one’s qualifications or skills). In India, the latter is particularly pervasive. According to the International Labour Organization (ILO), over 30% of India’s employed youth are overqualified for their jobs—a figure that reflects the mismatch between education and employment.
Consider the examples: graduates from prestigious institutions like BITS Pilani working as quality assurance (QA) testers, IIT engineers building dashboards in Power BI, or investment bankers churning out PowerPoint presentations. These are not isolated anecdotes but symptoms of a broader trend. A 2023 study by the Azim Premji University found that nearly 40% of engineering graduates in India work in jobs that don’t require their specialized training. Civil engineers pivot to software development, not out of passion but because the job market for their field is saturated or underpaid. This isn’t just a personal tragedy—it’s an economic inefficiency that stifles innovation and growth.
Why Are Graduates Underemployed?
The roots of underemployment lie in a confluence of structural and systemic issues:
- Misaligned Education System: India’s higher education system, particularly in engineering and technical fields, is often criticized for being outdated and theoretical. Curricula at even top-tier institutes like IITs and NITs emphasize rote learning over practical, industry-relevant skills. For instance, a civil engineering graduate may excel in structural analysis but lack exposure to modern software tools or project management—skills that employers prioritize. Meanwhile, the tech industry, which absorbs over 50% of engineering graduates, demands coding proficiency, often irrelevant to non-computer science disciplines.
- Skewed Admission Processes: India’s hyper-competitive entrance exams (JEE, NEET, etc.) prioritize rote memorization and rank-based admissions. Students who don’t score high enough for coveted branches like computer science often settle for fields like civil or mechanical engineering, only to find limited opportunities post-graduation. This forces them into unrelated roles, like software development, where they must upskill from scratch.
- Industry Expectations vs. Reality: Corporate India often prioritizes cost over talent utilization. Roles like QA testing or dashboard creation are low-cost, repetitive tasks that companies assign to highly qualified graduates to cut expenses. Investment bankers spending hours on PowerPoint decks aren’t honing their financial acumen—they’re filling a gap in operational efficiency. This reflects a broader corporate mindset that values immediate output over long-term innovation.
- Economic Pressures and Job Scarcity: With India’s GDP growth slowing to around 6% in 2024 (per IMF estimates), job creation hasn’t kept pace with the 12 million young people entering the workforce annually. Graduates from elite colleges, facing intense competition, often accept “safe” jobs that don’t match their skills rather than risk unemployment. For instance, software roles, even low-skill ones, offer better pay and stability than core engineering jobs, pushing civil or mechanical engineers to pivot.
The Human and Economic Cost
Underemployment isn’t just a statistic—it’s a personal and societal loss. Graduates who spend four years and lakhs of rupees on a degree only to work in unrelated, low-skill jobs face disillusionment and mental health challenges. A 2022 survey by Deloitte found that 60% of Indian Gen Z workers felt their jobs didn’t align with their career goals, contributing to burnout and disengagement.
Economically, underemployment squanders human capital. When an IIT graduate spends their day building basic dashboards, their potential to innovate or solve complex problems is wasted. This inefficiency hampers India’s ambition to become a $5 trillion economy. Moreover, it perpetuates a cycle where students chase “safe” degrees (like computer science) over passion-driven fields, further skewing the talent pool.
Is the Education System to Blame?
The question of whether college education is being “used” in jobs is central to this crisis. If an IIT graduate’s role could be performed by someone with a short-term coding bootcamp, what was the point of their rigorous education? This disconnect prompts a deeper question: should India’s education system pivot to better match industry expectations?
The answer isn’t straightforward. On one hand, aligning curricula with industry needs—emphasizing skills like coding, data analysis, or project management—could reduce underemployment. Some institutes, like IIITs, have already integrated industry-oriented courses, with partnerships from tech giants like Infosys or TCS. On the other hand, a purely utilitarian approach risks stifling creativity and critical thinking, which elite institutions are meant to foster. A civil engineer shouldn’t have to become a software developer, but the system must ensure their skills are valued in their own field.
Reforming the curriculum is only half the battle. Entrance exams need an overhaul to prioritize aptitude over rote learning. Industry must also step up, creating roles that leverage specialized skills rather than funneling graduates into generic tech jobs. Government policies, like incentives for core engineering sectors (e.g., infrastructure or manufacturing), could balance job distribution across fields.
A Broken System, But Not Hopeless
India’s underemployment crisis is a symptom of a misaligned ecosystem—education, industry, and policy working at cross-purposes. It’s tempting to call the system “fucked,” as frustration mounts among graduates who feel cheated by their degrees. But the issue, while systemic, isn’t intractable.
Solutions lie in multi-pronged reforms:
- Education: Update curricula to blend theoretical rigor with practical skills. Introduce flexible tracks allowing students to explore interdisciplinary fields.
- Industry: Encourage companies to create roles that utilize specialized skills, supported by tax incentives or public-private partnerships.
- Policy: Invest in sectors like infrastructure, renewable energy, and manufacturing to absorb core engineering talent.
- Career Guidance: Provide better counseling to align students’ interests with market realities, reducing the pressure to chase “safe” degrees.
Underemployment may not grab headlines like unemployment, but its toll on India’s youth and economy is undeniable. It’s time to stop treating graduates as cogs in a machine and start valuing their potential. Only then can India turn its demographic dividend into a true asset, rather than a source of frustration.
