Gen-Z: Why keeping youth discontent in check remains Indian PM Modi’s biggest challenge

India has the world’s largest youth population with over 360 million people between the ages of 15 and 29.

There’s been great progress in education enrolment and the number of private colleges and vocational training institutes have gone up exponentially in the last two decades.

However, “the transition from education to employment remains a major challenge, particularly for graduates”, according to the State of Working India 2026 report , externalfrom Azim Premji University.

Unemployment rates among the young are nearly four times higher than the non-youth and also much higher than global averages.

The problem is not new. Graduate unemployment has hovered around the 35-40% level for the last 25 years.

But it has been “magnified” in recent years owing to India’s demographic surge – or a growing size of the population entering the workforce – and improved education outcomes.

In 1983, 4% of 20 to 29-year-olds were graduates, and 13% of them were unemployed. In 2023, 28% were graduates and among them 67% were not employed.

Quality of education remains a major challenge affecting employability while the expansion in the number of graduates has not been matched by commensurate growth in graduate employment.

“Between 2004-05 and 2023, while approximately five million graduates were added each year, only around 2.8 million found employment, and an even smaller share entered salaried employment, contributing to rising graduate unemployment and slowing earnings growth,” the report finds.

Moreover, there is no evidence that aspiration is being rewarded. Barely 3.7% of graduates or post-graduates found white collar work and under 7% landed permanent salaried jobs, according to the report.