India’s Jobs Challenge Goes Beyond Skilling

A young woman in Mulugu, Telangana, has an engineering degree, professional certifications and the ambition built through years of education. Two years after graduating, she is still searching for work. The roles for which she is qualified are concentrated in Hyderabad, but relocation is beyond her family’s financial means and circumstances.

Her experience does not point to a lack of skills. It points to a missing bridge between education and employment. Field observations across rural Telangana and Andhra Pradesh reveal the same pattern: graduates leave district colleges with qualifications and ambition, yet remain disconnected from the labour markets where suitable jobs exist.

India’s employment debate has long centred on the skills gap. 

That remains important, but it is no longer sufficient. The challenge is increasingly an opportunity gap, or the distance between possessing qualifications and being able to convert them into decent work.

Over the past decade, India has invested heavily in human capital through programmes such as the Skill India Mission, the National Education Policy 2020 and the National Apprenticeship Promotion Scheme. Access to higher education has expanded, including for women and first-generation learners. Yet educational expansion has not produced comparable employment outcomes.

The Periodic Labour Force Survey 2025 puts the labour force participation rate for people aged 15 years and above at 59.3% and the worker population ratio at 57.4%. Unemployment among people with secondary education or above was 6.5%, more than twice the overall rate of 3.1%. These figures do not by themselves establish a shortage of opportunities, but they underline the difficulty educated workers face in securing productive employment.

Amartya Sen’s capability approach helps explain the disconnect. 

Development is not only about building people’s capabilities; it must also give them the freedom and institutional support to exercise those capabilities. Naila Kabeer’s work on gender and empowerment adds another dimension: social norms, access to resources and bargaining power influence whether formal qualifications translate into economic agency. In that sense, education builds capability, while labour markets, institutions and social conditions determine whether it becomes a livelihood.

Unequal Access
Telangana illustrates both the gains from skilling and the limits of a development strategy centred mainly on it. Hyderabad has developed into a major hub for information technology, global capability centres and high-value services. Institutions such as the Telangana Academy for Skill and Knowledge and Young India Skills University seek to strengthen industry-oriented training and employability, particularly for first-generation graduates and women.

The connection between education and employment, however, remains uneven. Higher education has expanded across districts such as Karimnagar, Nizamabad, Khammam, Mahabubnagar and Adilabad, while knowledge-intensive employment remains concentrated in Hyderabad. This creates a spatial mismatch: human capital is produced across the state, but suitable jobs are clustered in one metropolitan centre.

For graduates from smaller towns, access to a job often depends on much more than qualifications. It can require relocation, affordable housing, reliable transport, professional networks, information about vacancies and sustained family support. These barriers are especially restrictive for women, whose mobility and employment choices are often constrained by unpaid care responsibilities and family circumstances. Labour force participation, therefore, cannot be treated as synonymous with equal access to quality employment.

Evidence from Round 7 of the Young Lives Survey in Andhra Pradesh and Telangana reinforces this point. Young people are entering the labour market later as educational participation increases. Yet many of those who find work remain in poor-quality jobs without written contracts or with long working hours. Early-life disadvantages linked to gender, household wealth and parental education continue to shape employment trajectories.

Education has become necessary for securing quality employment, but it is not sufficient. Geography, mobility, employer networks and institutional access increasingly influence who can turn a qualification into a viable career. Aggregate labour-market indicators can miss this gap because higher participation may coexist with unequal access to productive and secure work.

Policy Reset
Recognising the opportunity gap requires a corresponding shift in policy. Continued investment in education, vocational training and digital skills remains essential, but it must be matched by stronger links between institutions and employers. Universities and colleges outside metropolitan centres need structured partnerships with industry, expanded internships and apprenticeships, decentralised campus recruitment, mentoring and career guidance.

Policy must also reduce the cost of reaching opportunity. Regional innovation and services hubs can distribute knowledge-intensive employment more widely. Better transport, affordable housing, reliable digital infrastructure and accessible childcare can make relocation or commuting feasible for graduates who would otherwise be excluded. These are not peripheral welfare measures; they are part of the labour-market infrastructure required to convert human capital into employment.

Employability programmes must also be judged differently. The number of people trained or certificates issued is an input, not an outcome. Evaluation should focus on the quality of jobs secured, retention, earnings progression and whether women, rural youth and first-generation graduates gain equitable access.

India’s employment challenge has entered a new phase. The country must continue to improve the quality and relevance of education, but it must also build labour markets that allow capable people to use what they have learnt. Telangana shows both the strength of India’s skilling effort and the limits of concentrating opportunity in a few urban centres.

The demographic dividend will depend not only on how many degrees and certificates India awards, but on whether they open credible pathways to sustainable livelihoods.