Nobel laureate Rabindranath Tagore once said, “Don’t limit a child to your own learning, for she was born in another time.” In the context of India’s education system, this quote is particularly resonant today. India’s education system is outdated. We are preparing students for jobs that are rapidly disappearing or evolving.
Meanwhile the future of work is being shaped by emerging technologies, led by Artificial Intelligence (AI), being the most disruptive of them all. AI is reshaping how we work and think, with our research suggesting that up to 70% of current jobs, globally, will be impacted, and up to 30% of tasks in many current jobs will get completely automated. A plethora of new jobs related to AI development and implementation are being created as we speak. This technological shift via AI is already changing the world and the job market, whereas the curriculum update cycle in our schools and colleges runs in three-year cycles. This is incremental at best, leading to many students being left behind if we do not up-skill, cross-skill and re-skill them.
India’s ‘demographic dividend’ has long been touted as a key driver of the nation’s future growth. With more than 800 million people below the age of 35, the country boasts of having one of the largest youth populations anywhere. This demographic ‘asset’, however, is increasingly under threat of becoming a ‘liability’, as the gap between education and real-world skills, and degrees and employability widens. If this gap is not addressed, India’s demographic dividend could morph into a demographic time bomb — a paradox at scale.
The stark reality is that while India is producing millions of graduates every year, many of these graduates remain underemployed and are increasingly becoming unemployable. Despite popular belief, this is not merely a problem facing social science or non-STEM (science, technology, engineering and mathematics) students. Over the past decade, data show that 40%-50% of engineering graduates from Indian universities have not been placed in jobs, highlighting the worrying gap between academic education and industry requirements. More and more youngsters are going to college or university, yet employers report increasing difficulty in finding talent with the right skills. Belatedly, educators are acknowledging the problem, with 61% of higher education leaders today agreeing that curricula are not aligned with rapidly changing job market needs.
The mismatch begins in high school
As the AI revolution accelerates, India faces a deepening skills crisis. According to McKinsey, nearly seven out of every 10 Indian jobs are at risk from automation by 2030. This means a massive and unprecedented change could be affecting the nation in just the next five years. Of course, it is not all bad news. The World Economic Forum predicts that AI and other new tech will create 170 million new jobs by 2030. The problem is that in the same period, more than half of this number of newly created jobs (92 million) will be displaced. Consequently, skilling must become a critical national priority.
The challenge lies in how Indian youth are entering the workforce. A significant number are doing so with outdated or irrelevant skills. This misalignment begins in high school, where students are largely unaware of the multitude of career paths that exist. A Mindler Career Awareness Survey from 2022 revealed that 93% of Indian students between classes 8 to 12 are aware of only seven career options, most of which are traditional roles such as doctor, engineer, lawyer, or teacher. In contrast, the modern economy offers over 20,000 career paths. Surprisingly, a mere 7% of students report receiving formal career guidance during their schooling years. This lack of awareness leads to millions of our best and brightest, pursuing degrees that do not match their aptitudes or market needs. Do not take our word for it. According to the India Skills Report 2024, more than 65% of high school graduates pursue degrees that are not aligned with their interests or abilities. This alarming reality means that students emerge from their degrees ill-equipped for the rapidly changing job market, further exacerbating India’s unemployment crisis.
Digital tools, but analog mindsets
While most students in India now have access to some technology as smartphones have become much cheaper, and the government has also tried to roll out computer and AI labs, most schools still follow traditional, examination-centric curricula. There is limited focus on career exploration or the development of job-ready skills. As a result, students graduate with degrees but lack the practical experience required by employers. In fact, the Graduate Skills Index 2025 produced by Mercer-Mettl found that only 43% of Indian graduates are deemed job-ready. In our experience with interns and fresh graduates, this figure, if anything, underestimates the scale of the problem.
EdTech platforms primarily focus on test preparation and rote learning, rather than career discovery or skill development. Coursera, Udemy and other look-alikes have tried to address this problem, but the certificates obtained from these are becoming increasingly commoditised. School curricula remain disconnected from the evolving job market, leaving students unprepared for the challenges ahead. Only a few State boards and central bodies have introduced career readiness frameworks, and even fewer integrate emerging career pathways into their curricula.
The Indian government, to its credit, has launched several initiatives that are aimed at bridging the skills gap, the most prominent being the Skill India Mission, which aimed to train over 400 million individuals by 2022. Despite large-scale funding, the mission fell far short of this target. Multiple systemic issues have contributed to this failure: besides the Skill India Mission, an acronym soup of other policies has also been launched which includes the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Pradhan Mantri Kaushal Kendras (PMKK), Jan Shikshan Sansthan (JSS), Pradhan Mantri Yuva Yojana (PMYY), Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP), Prime Minister’s Internship Scheme, and many others,
What India needs is a cohesive strategy that aligns education and skill development with industry demands. We have undertaken deep research and devised a platform for just that. We are in conversations with NITI Aayog, the Association of Indian Universities (AIU), and the Skill Ministry to translate this solution into reality. Collaboration between the government, private sector and educational institutions will be essential to create a robust ecosystem for skill development.
The decisive decade
India’s ambition to emerge as a global digital powerhouse rests on its ability to integrate technology, education and employment into a coherent national framework. India’s youth will either be equipped with the skills to thrive in an AI-driven world or be left behind. This is not just an education or employment crisis; it is a crisis where our entire social contract could come undone. The student civil disobedience during the Mandal Commission days in 1990 bear witness to the havoc that youth-led protests can create, escalating into violence, clashes with police, property destruction, and, in some cases, fatalities due to police firings. If India fails to act now, it risks creating a generation of highly literate, even educated but unemployable youth that can become a ticking time-bomb. The World Bank Economic Review has ably captured this paradox at scale in an article by Lant Pritchett, “Where Has All the Education Gone?”. The ramifications of such a crisis are dire. The good news is that this is an entirely fixable problem. India must prepare its youth not for the jobs of yesterday, but for the careers of tomorrow. The clock is ticking and it is up to us to convert India’s demographic dividend into an asset or a liability.
Martin Whitehead is a behavioural economist and former Partner, PwC. Amar Anand Singh is currently Chief Investment Officer of Auroville Investment Management Limited and Founder of the Auro Group of Companies. He was Managing Director and part of the founding team at Tybourne Capital. He previously held roles as an Analyst at McKinsey & Company and Vice President at Citigroup in New York, and Associate Director at Cinven Private Equity in London. Ritu Kulshrestha supported the initial stages of the article, specifically with data content and drafting
Published – August 29, 2025 12:16 am IST