Dharmendra Pradhan was forced to resign as India's education minister last month after angry Gen‑Z protesters took to the streets over repeated entrance exam paper leaks.
His departure allowed Prime Minister Narendra Modi to handle the immediate crisis, but keeping youth discontent in check may become a long‑term challenge. Modi quickly announced fast‑track courts to prosecute those accused of leaks and appointed tech billionaire Nandan Nilekani to lead a reform of the examination system.
Interviewed by the BBC, veteran economist Santosh Mehrotra highlighted the stark reality: “The labour market has become brutal over the last decade. Non‑farm jobs are not growing and real wages have stagnated.” He added, “India has a structural problem—our economy is weak, demand for labour is limited, and our education system cannot supply employable workers.”
India’s GDP growth, fueled by heavy infrastructure spending, has long been the government’s shield against criticism about uneven development. Yet the recent upheaval may finally push the administration to confront the education crisis and the problem of youth unemployment.
The State of Working India 2026 report from Azim Premji University shows that while educational enrolment has risen, the transition from education to employment remains a major challenge. Unemployment rates among young people are nearly four times higher than for non‑youth and exceed global averages. Graduate unemployment has hovered around 35‑40% for 25 years, now reaching 67% in 2023.
“Between 2004‑05 and 2023, five million graduates were added each year, yet only about 2.8 million found employment,” the report notes. “Very few graduates secure white‑collar work, with under 7% landing permanent salaried jobs.”
Manufacturing’s share of GDP fell from 17% in 2015 to 14% today, and manufacturing employment dropped for five years post‑2015. Agricultural employment rose by 80 million people after 2020, showing disguised unemployment.
The software industry, once a pillar of India’s middle‑class dreams, now faces AI‑driven disruption. Goldman Sachs estimates 8‑12% of non‑farm jobs risk replacement by AI. It has resulted in slower IT hiring, rising contract work, and stagnant wages.
In a recent event at HCL Technologies, hundreds of employees chanted “we want a hike,” reflecting frustration. “Young graduates will have to rewire their brains to the new reality that white‑collar knowledge jobs are shrinking,” CEO Vishakumar said, echoing commentary from CEO Neeti Sharma who emphasized that hiring has shifted from degrees to actual skills.
Industry expert Devina Mehra warned that a generation that cannot expect a lifestyle better than their parents could lead to a “disaster” for the Modi government. The challenge is not for quick fixes but for a new industrial and educational policy that balances skill‑based training with evolving technology demands.
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