Youth Anger Over Jobs and Education Emerges as a Major Challenge for Modi Government

Public anger over repeated leaks of entrance examination papers has added to worries about the problems facing India’s young people, and has renewed pressure on Prime Minister Narendra Modi’s government.

The controversy led to the resignation of Education Minister Dharmendra Pradhan last month amid widespread protests, mostly by Gen-Z students. The government has responded with measures including fast-track courts for those accused in the leaks and a review of the examination system by technology executive Nandan Nilekani, but analysts say the discontent points to deeper structural problems.

Many young Indians say their worries go beyond exam integrity to include wider issues such as unemployment, stagnant wages and an education system that does not prepare graduates for the jobs that are available. "The labour market has become brutal over the last 10 years," economist Santosh Mehrotra, author of India Out of Work: Rethinking India's Growth Story, told the BBC. Weak demand for labour and shortcomings in the education system have combined to reduce employment opportunities for graduates, he said.

The Modi government has frequently pointed to India’s strong GDP growth, largely driven by public spending on infrastructure, as evidence of economic progress. But economists say recent protests have added to lingering concerns about whether economic growth is translating into enough job opportunities.

India has the world’s largest youth population, with more than 360 million people aged between 15 and 29. There has been a significant increase in access to higher education and vocational training in the past two decades, but not in employment outcomes.

Young people still see much higher unemployment rates than older workers, according to the State of Working India 2026 report by Azim Premji University. Graduate unemployment has been between 35 and 40 per cent for nearly a quarter of a century, the report says.

The study also shows how the challenge has grown with educational expansion. In 1983, only 4% of Indians aged 20 to 29 had university degrees, and 13% of degree holders were unemployed. By 2023, 28% of that age group were graduates and 67% were unemployed.

Researchers say the giant surge in the number of graduates has not been matched by a similar surge in graduate-level jobs. Between 2004-05 and 2023, about five million graduates entered the labour market each year. But only about 2.8 million of them were able to find jobs. This has led to rising unemployment and slower wage growth.

It also pointed to the relatively low number of graduates who found permanent salaried or professional jobs, raising questions about the quality of employment available.

Long-term structural reforms, not short-term policy fixes, are needed to address these problems, say experts.

Mehrotra said that reviving India’s small and medium-sized enterprises could generate jobs, but broader industrial policies to strengthen manufacturing would be needed to create sustained employment. Manufacturing’s share of India’s GDP has declined recently, and employment in agriculture has increased since 2020, a phenomenon economists often link to underemployment and a lack of opportunities in other sectors.

India's technology sector, once seen as a route to middle-class prosperity, is also changing as companies adjust to artificial intelligence.

According to a report by Goldman Sachs, AI-driven automation could affect 8-12% of India’s non-farm jobs. Hiring growth has slowed, contract work has become more common and wage growth has stayed modest, industry observers say.

Concerns such as these were highlighted at a recent event organised by HCL Technologies in Chennai, where employees reportedly disrupted the event with slogans for better pay.

Neeti Sharma, CEO of TeamLease Digital, told the BBC that employers are giving more importance to practical skills than academic qualifications. She said educational institutions may have to place greater emphasis on vocational and technical training as labour market demands change.

These trends could change expectations for many young Indians, making traditional white-collar career paths more competitive while skilled trades and vocational jobs gain in importance, analysts say.

Market analyst Devina Mehra has also warned slower income growth among younger workers could have long-term economic consequences if job opportunities don’t improve.

The recent protests indicate that worries about the quality of education, job prospects and economic mobility are becoming more and more important issues for India's policymakers.