If the rate of population growth in a country equals the rate of employment growth, then the number of people who were unemployed in the previous year will remain unemployed in the new year as well. In other words, if a country's population grows by 100 people in a year, that same number of individuals would have turned 15 during that year and entered the labour market. So even if all of them find jobs, those unemployed from the previous year stay unemployed. Therefore, to eliminate unemployment, employment must grow at a rate higher than the population growth rate. This is not happening in our country, and consequently, the unemployment problem is becoming increasingly severe.
Let us understand this in simple language. Suppose a country has a population of 100. Among them, 80 are of working age, i.e., between 15 and 64 years. Of these, 60 are in the labour force. This means the remaining 20 are not seeking work—they might be studying or engaged in other activities, and thus are not part of the job market. Now, among those 60 in the labour force, those who do not get employment are termed unemployed. So, if 10 out of the 60 do not get a job, the unemployment rate is 10 divided by 60, multiplied by 100, which comes to 16.66 percent. This is how the unemployment rate is measured in India. A higher unemployment rate generally means a higher number of unemployed people, leading to greater social and economic distress in the country.
Rise in Unemployment Rate
Currently available data indicate that the unemployment rate among the youth, that is, in the 15-29 age group, is on the rise. In April 2025, the unemployment rate stood at 13.8 percent, which increased to 16.2 percent by July 2026. During these 15 months, the rate never fell below 13.8 percent; it remained consistently above 13.2 percent. These figures are derived from the government's monthly Periodic Labour Force Survey (PLFS). In 13 out of the 36 states and union territories, the unemployment rate in 2025 was higher than in 2022. For instance, Andhra Pradesh saw a rise from 15.1 percent to 16.2 percent, Delhi from 5.9 percent to 14.4 percent, Telangana from 12.6 percent to 18.1 percent, and West Bengal from 8.4 percent to 10.6 percent. For women, the unemployment rate was even higher than the general rate; in 16 states, the rate for women in 2025 exceeded that of 2022.
Education and Unemployment
On the other hand, a long-standing belief has persisted that higher education leads to better jobs or employment. However, recent statistics reveal that this notion is failing in the market. The 2026 'State of Working India' report from Agnim Premji University states that less than seven percent of graduates in India—those with B.A., B.Com., B.Sc., B.C.A., etc.—secure a permanent salaried job within one year of graduation. This indicates a staggeringly high level of unemployment or employment uncertainty. A large number of graduates remain daily-wage earners, or as it is often said, they earn by the day and spend by the day. When it comes to white-collar jobs—those in offices or shops—the figure is just 3.7 percent.
This shows that even in such roles, permanent employment is not guaranteed after graduation, and it proves that the proportion of casual, irregular employment is continuously increasing. The university's study also said that in 2023, out of 6.3 crore graduates in the 20-29 age group, 1.1 crore youths, or just over 17 percent, were unemployed. Furthermore, the report noted that unemployment among youths in the 20-25 age bracket was 35.2 percent in 1983 and rose to 39.33 percent in 2023. This means that those who are newly entering the job market are facing rising unemployment.
Rising Unemployment in the Unorganised Sector
Employment creation in the unorganised sector is also declining, which is an even greater cause for concern. In the year ending September 2024, only 74.5 lakh new people found employment in the unorganised sector, compared to 1.1 crore new jobs created in the previous year. Thus, in one year, 35.1 lakh fewer jobs were generated in this sector. These details come from a government annual survey by the Ministry of Statistics and Programme Implementation. It also reveals that wages in this sector grew at 13 percent the previous year, but only at 3.9 percent in the following year. If we consider the inflation rate to be even five percent, it means that wages did not even keep pace with price rises. Consequently, real wages declined, leading to a lowering of their standard of living.
The unorganised sector comprises people whose employment is not permanent, who are self-employed, and whose earnings are uncertain. They include roadside vendors, hawkers, cart-pullers, clerks, carpenters, cobblers, plumbers, mechanics, construction workers, and labourers or clerks in small factories. The rising unemployment rate across these categories indicates that opportunities for self-employment have diminished in the market.
The above details show that over the last 15 months, unemployment has increased among both the highly educated—graduates and above—and the less educated. It is worth recalling that according to the University Grants Commission (UGC), out of 100 students who enrol in Class 1, only 28 go on to college, while the rest drop out after Class 12. In Gujarat, this ratio is even lower, at 24 students. Thus, there seems to be little connection between education and employment.
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*Academic based in Gujarat
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