Da I Wanmi Rani finished school in 2025, but unlike many others of his age, he chose not to go to college. Having seen some of his graduate friends and relatives struggle to land a job even after securing a degree, he felt that pursuing an expensive undergraduate programme for four years could be pointless.
“These days, you don’t get a job even after a master’s degree,” says Rani.
Instead, the 21-year-old son of a single mother signed up for a cheaper one-year hotel management diploma programme at the North East Skill Centre, a state government-run institution that focuses on vocational skills training, in Guwahati in the north-eastern state of Assam.
It has worked out well. Even though he will complete his diploma programme only in August, Rani has already received a job offer to join a five-star hotel in North India as a guest service associate for a monthly salary of around 20,000 rupees (S$268).
“I am happy as I wanted to start earning as early as possible to support my mother,” he says.
Rani is among a growing number of Indians ditching the pursuit of a seemingly worthless higher-education degree that leads them nowhere in the job market. Many are also being pushed out of higher education as they are unable to afford good-quality programmes at private universities or secure a coveted spot at a public one.
This has led them to instead choose shorter vocational programmes in the hope of landing a job sooner, even if it is low-skilled and low-paying. Others are entering the workforce directly after school in similar roles in the gig economy.
This trend has intensified in recent years, with the number of students enrolled in undergraduate degrees falling for the first time since the government began publishing an annual survey on higher education in 2011. Figures released in July show the number of such students fell by around 93,000 in the year ending March 2024, down from 34.67 million in the previous year.
While the rate of growth in undergraduate enrolment is tipped to fall naturally as India ages, this unexpected premature decline raises worrying questions for India, where nearly half the population is below 25, and which has often touted its youth dividend as a key ingredient for its economic success.
Jobless growth
At the heart of this crisis is an economic growth story that has been unfavourable for India’s graduates. Graduate unemployment in the country has remained stubbornly high – ranging between 35 per cent and 40 per cent – for more than four decades.
But in recent years, this problem has worsened as the graduate population has far outpaced job generation, leaving India with too many graduates and too few jobs.
According to the State of Working India (SWI) 2026 report, approximately five million students graduated every year between 2004 and 2023, but only about 2.8 million graduates were able to secure jobs each year.
“We’ve done a great job in expanding education for our youth and increased educational enrolment rates... but what’s happened is that we’ve not been able to create jobs,” notes Rosa Abraham, associate professor of economics at Azim Premji University.
“The capacity to generate jobs alongside growth has in fact contracted over the last few years,” adds Abraham, lead author of the SWI 2026 report.
Average monthly salaries of Indian graduates have also declined in real terms since 2011, with the fall being especially pronounced among graduate men, the same report shows.
Degrees are not translating into workplace readiness, either. Less than half (42.6 per cent) of graduates are employable, found India’s Graduate Skill Index 2025, a report published by Mercer.
If fewer students find higher education worth their time and money, shrinking the pipeline of researchers, engineers and skilled professionals, India’s long-term productivity and innovation is at risk, not to mention its plans to boost social equity and transition into a developed, knowledge-based economy.
The government acknowledges the importance of cultivating a highly skilled workforce. In 2020, it announced a goal to increase the gross enrolment rate in higher education among the 18-to-23 age group to 50 per cent by 2035. This figure is now around 30 per cent, half that of China.
Which is why this decline in undergraduate enrolment is “most disturbing”, professor Sukhadeo Thorat – a former chairman of India’s higher-education regulator, University Grants Commission – tells me. Given policy goals, “it should increase rather than decrease”, he adds.
While specialised courses, including those in computer science and management, continue to see a rise in enrolment, general undergraduate degrees in humanities, commerce and science have seen the sharpest decline.
With these degrees increasingly perceived as offering poor returns, and specialised ones becoming more expensive, India’s poor are being pushed further out of higher education and deprived of the benefits that come with it.
Buffeted by such headwinds, if more young people opt for short-term vocational education and secure employment, even if in lower-paying and lower-skilled jobs, some would argue this correction is a positive development of a workforce adjusting to job-market demand.
Pushkar, a higher-education sector commentator who goes by one name, says: “It’s a healthy sign to the extent that if the economy is not generating enough white-collar jobs or manufacturing jobs, then why go for a college degree?”
The trouble with lower university enrolment
For those hard-pressed to earn, such as Rani, a shortcut to a job certainly makes sense. But can India, a country that aspires to become developed by 2047, afford such underemployment on a macro level? Can it truly afford to squander its demographic dividend?
This is ultimately a failure of economic planning. If the economy cannot create enough professional jobs, young people will rationally abandon higher education for quicker routes into work.
Rather than accepting this race to the bottom, policymakers should focus on building an economy that rewards higher skills. The cost is not just slower productivity growth but also the ambitions that go unrealised. Even Rani intends to enrol in an undergraduate programme to study commerce one day, convinced that a degree will eventually open doors to better career prospects.
Increased costs of a degree
Shifting towards vocational skill-based training at school-going age instead of fixing the problems around job creation has been an increased government focus that misses the mark. Under the National Education Policy 2020, India mandates vocational education beginning at ages 11 to 12 years.
A heavy focus on early specialisation risks reinforcing India’s class and caste divisions, with students from disadvantaged backgrounds pushed into vocational streams and opting out of higher education, while wealthier students pursue academic pathways.
“The government, it seems to me, is indirectly discouraging students from going for higher education,” says Thorat. He lists a few other possible reasons for the decline in undergraduate enrolment, particularly among lower socio-economic groups. India is transitioning from a three-year undergraduate programme structure to a four-year one, which raises the financial costs of a degree.
The introduction in 2022 of a competitive entrance exam for admission – instead of school-leaving exams – has also raised the bar for entry into public universities, advantaging those with the financial means to afford coaching.
As it is, higher education is already dominated by private providers, with more than 80 per cent of colleges privately run. The best among them are prohibitively expensive, and public universities too have begun charging higher tuition fees for certain popular courses.
“Higher education has, therefore, become increasingly inaccessible for the economically poor and marginalised sections of Indian society,” notes Thorat.
The way out
India now allocates around 1.6 per cent of its gross domestic product (GDP) to higher education, and approximately 4 per cent of GDP to overall education, well short of the 6 per cent target envisioned by the National Education Policy 2020.
Reversing the decline in undergraduate enrolment will require more than simply expanding university places. The government must invest in improving the quality of public universities, keep degrees affordable, modernise curricula and, above all, ensure the economy generates enough high-quality jobs for graduates.
Pushkar notes it is private universities that are usually more agile and able to respond faster to market changes. “The government institutions will see some changes, but not immediately, except at the top institutions,” he adds.
The resulting risk is that the most marketable courses become concentrated in expensive private universities, placing them beyond the reach of poorer students and deepening educational inequality.
Vocational education, too, is no silver bullet and requires an overhaul. Half of the seats at India’s 14,600-plus Industrial Training Institutes go unfilled each year because many fail to equip students with skills employers actually need. Institutions like Rani’s remain the exception rather than the rule.
Ultimately, education reform cannot succeed without labour market reform. For young people to see value in a university degree, India must create more professional jobs worthy of their qualifications. This includes reviving public-sector hiring and strengthening labour-intensive industries that can absorb graduate talent.
“Ensuring you are filling (government) vacancies regularly is one way of bringing in meaningful employment opportunities for graduates,” says Abraham.
India’s demographic dividend is often described as its greatest economic asset. But if young Indians no longer believe higher education is worth the investment, that dividend risks becoming a missed opportunity. The Straits Times
