Statsguru: Youth employability declines amid looming AI disruption

Even as new emerging technologies transform the employment landscape, India is focusing on equipping its workforce with the skills needed for emerging industries to achieve its ‘Viksit Bharat by 2047’ vision. However, a recent report by online talent assessment platform Mercer-Mettl paints a grim picture of Indian graduates’ employability.

 

While the unemployment rate for those aged 15 and above declined by almost half between July-June 2017-18 and 2023-24, the youth unemployment rate (in the 15-29 age group) also declined at a double-digit rate, though not as steeply. More recently, while overall unemployment rate remained intact during 2023-24 compared to the previous year, youth jobless rate inched up (Chart 1). 

 

The unemployment rate for those aged 15 and above with graduate-level education has dropped over the years in both rural and urban areas. While it came down from 20.5 per cent in 2017-18 to 14.6 per cent in 2023-24 in rural areas, the drop was from 14.5 per cent to 11.6 per cent in urban (Chart 2). 

 

Worse, the quality of jobs of these graduates is also under question. According to India’s Graduate Skill Index 2025, Indian graduates’ employability declined from 44.3 per cent in 2023 to 42.6 per cent in 2024, mainly as employability in non-technical job roles dropped from 48.3 per cent to 43.5 per cent (Chart 3). 

 

Graduates in Delhi were found to be most employable (53.4 per cent), followed by Punjab (51.1 per cent), Himachal Pradesh (51.1 per cent) and Uttarakhand (50 per cent) (Chart 4). 

 

Though employability of graduates went down across the three college tiers, Tier-I colleges showed the highest level of employability at 48.4 per cent (Chart 5). 

 

As for soft skills, Indian graduates seemed to fare better in communications (55.1 per cent) and critical thinking (54.6 per cent) but lagged in creative abilities (44.3 per cent) and problem solving (44.6 per cent) (Chart 6). 

 

The Mercer-Mettl report also highlighted that a constant mismatch between existing skills and skills required for jobs could be foreseen as artificial intelligence integrated further at the workplace.