India is witnessing an unprecedented expansion in higher education. Over the past decade, thousands of new colleges and universities have been established, producing millions of graduates every year. Yet unemployment of the educated remains a growing concern. Nearly one in three graduates are unemployed. Is India producing more graduates than what the economy can absorb? Rajan Wadhera and O.R.S. Rao discuss the question in a conversation moderated by M. Kalyanaraman.Edited excerpts:
Is India producing more graduates than the economy can absorb?O.R.S. Rao: The numbers point to a widening gap between the growth in graduates and the growth in jobs. In engineering alone, the number of graduates has risen sharply over the past few years while job creation has not kept pace. Earlier, the IT services sector was the principal employer of engineering graduates. Today, hiring by IT services firms has slowed considerably, even though sectors such as banking and financial services, manufacturing, defence and space technologies have expanded their recruitment. The challenge is that these new opportunities have not grown fast enough to absorb the increasing number of graduates entering the labour market.
