India is grappling with a significant youth unemployment problem as a downturn in white-collar jobs within the information technology (IT) sector has left many recent graduates and young individuals without employment opportunities.
According to data from the Centre for Monitoring Indian Economy, unemployment among Indian youth aged 20 to 24 rose to 44.49% in the October to December period of the previous year, up from 43.65% in the preceding quarter. Similarly, unemployment among 25- to 29-year-olds increased to 14.33% during the same period, compared to 13.35% in the previous quarter.
Chandra Garisa, CEO of recruitment firm Foundit, highlighted the decline in white-collar job availability, particularly within the IT sector, as a significant factor contributing to the issue. He noted that hiring in the IT and services segment has significantly slowed down, attributing this trend to the adoption of automation and artificial intelligence, rendering many roles redundant.
Foundit’s data revealed a substantial drop in online hiring for both IT hardware and software sections by 18% compared to the previous year. The IT sector experienced the most significant decline in hiring activity among the 14 sectors analyzed, with an overall 5% drop in job postings in 2023 compared to the previous year.
Suyash Rai, deputy director and fellow at Carnegie India, underscored the widening gap between job demand and supply, describing it as a growing social issue in India. He pointed out that while the IT sector employed an estimated 5.4 million people in the fiscal year ending March 2023, there is a transitory mismatch of skills contributing to youth unemployment.
Garisa emphasized the need for a shift in perception among youth regarding career opportunities in sectors beyond IT. He noted that while job opportunities are growing in industries like manufacturing, there remains a perception among youth that IT careers are superior, leading to a skills mismatch.
As job postings in the manufacturing sector rise, particularly for positions requiring AI skills, Garisa stressed the importance of aligning skills with evolving job demands to address the youth unemployment crisis effectively.
