India has made remarkable progress over the past four decades in expanding access to higher education for its youth, enabling a steady shift from agriculture to industry and services, while also reducing gender and caste-based disparities, according to the State of Working India 2026 report.
The report highlights that young Indians today are more educated, informed, and aspirational than ever before. Indu Prasad, President of Azim Premji University, described these gains as significant achievements, reflecting improved access to opportunities across diverse social groups.
However, the study also warns that challenges persist. The real test lies in how effectively this growing, educated workforce is absorbed into the labour market. With India’s demographic dividend expected to peak soon — and the working-age population share projected to decline after 2030 — job creation in the coming years will be crucial to converting this demographic advantage into sustained economic growth.
Over the years, youth participation in education has increased significantly, particularly among women. India’s tertiary enrolment rate now stands at around 28%, comparable to countries with similar income levels. At the same time, access to colleges has improved, with availability rising from 29 colleges per lakh youth in 2010 to 45 in 2021, largely driven by private institutions.
Despite these gains, concerns remain about quality and equity. Faculty strength has not kept pace with rising student numbers, leading to high student-teacher ratios — especially in public institutions. Similarly, while the number of Industrial Training Institutes (ITIs) has nearly tripled, quality issues, particularly in private institutes, have emerged.
The report also notes a worrying trend among young men, whose participation in higher education declined from 38% in 2017 to 34% in 2024, with many citing financial pressures and the need to support their families.
Economic inequality continues to influence educational choices. Students from wealthier backgrounds are far more likely to pursue expensive degrees like engineering and medicine, while those from poorer households face significant financial barriers, despite some improvement in representation.
On the employment front, challenges remain stark. Graduate unemployment among those aged 15–29 is close to 40%, and only a small proportion secure stable salaried jobs within a year of completing their studies. While graduates generally earn twice as much as non-graduates, wage growth for young male graduates has slowed, even as gender pay gaps have narrowed.
Encouragingly, younger workers are moving away from agriculture more rapidly than older generations, finding opportunities in manufacturing and services. Young women, in particular, are increasingly entering sectors such as IT, automobile manufacturing, and business services.
The report also highlights a gradual breakdown of traditional occupational patterns linked to caste and gender, along with rising youth migration that helps balance regional economic disparities — with poorer states supplying labour and richer states relying more on migrant youth.
Overall, while India’s progress in education is noteworthy, the report underscores that the country’s future growth will depend on its ability to create sufficient, quality jobs for its increasingly skilled and ambitious young population.
