Only 8.25% graduates in jobs matching their degrees, NITI Aayog report flags skills gap
The report, citing data from the Economic Survey 2024-25, said only 8.25% of graduates are employed in roles aligned with their qualifications.
- Aug 27, 2026,
- Updated Aug 27, 2026 5:00 AM IST
India’s graduate workforce is facing a widening gap between what students study and the jobs they eventually take up, with NITI Aayog calling for major changes to generic degree programmes and the country’s skilling system, according to a report by The Indian Express.
In its report, ‘Reimagining Skilling for Viksit Bharat’, released on Saturday, the government think tank said only 8.25% of graduates are employed in roles aligned with their qualifications. It also flagged high unemployment among educated youth and said degrees such as B.A., B.Sc. and B.Com. often have weak links to jobs.
NITI Aayog said India’s higher and technical education system faces a “fundamental disconnect” between what is taught and what the labour market demands. It said outdated curricula often fail to translate degrees, diplomas and certificates into employability.
The report, citing data from the Economic Survey 2024-25, said only 8.25% of graduates are employed in roles aligned with their qualifications.
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Generic degrees dominate undergraduate education
NITI Aayog highlighted the large number of students enrolled in traditional undergraduate courses. Of the 3.4 crore students enrolled in undergraduate programmes, 1.13 crore are studying B.A. alone. Combined enrolment in B.A., B.Sc. and B.Com. exceeds 2 crore, the report said.
The think tank has recommended redesigning these courses around industry needs, suggesting applied specialisations such as B.A. Hospitality, B.Sc. Applied Technology and B.Com. Analytics.
It also called for scaling up Apprenticeship Embedded Degree Programmes (AEDP) and Work-Integrated Degree Programmes (WIDP) to give students greater exposure to workplaces while they study.
The problem is also reflected in graduate unemployment figures. NITI Aayog said unemployment among graduates stands at 13%, while 20.4% of graduate women are unemployed. Both figures are significantly higher than the national unemployment rate of 3.2%.
The State of Working India report by Azim Premji University had also flagged rising unemployment among educated youth. It showed that unemployment among graduates below the age of 25 rose from 35% in 1983 to 39% in 2023. Among graduates aged 25 to 29, it increased from 12% to 20% during the same period.
Finance Minister Nirmala Sitharaman had also highlighted the gap between degrees and employability in an interview with The Indian Express on August 17. She said the education system was producing certified or degree-holding youngsters who were not yet ready to handle themselves either as employees or entrepreneurs. “That’s the fix we need,” she said.
Skilling can mean higher starting pay
The NITI Aayog report also highlighted the financial impact of additional skilling.
Citing Boston Consulting Group’s Higher Education Survey, the report said a person with a generic undergraduate degree but no additional skilling earns an average starting salary of Rs 22,000 per month.
For a generic undergraduate who also undergoes skilling, the average starting salary rises to Rs 29,000 per month. Both categories were estimated to have annual salary growth of 3.2%.
This Rs 7,000 monthly starting salary gap can become significant over time. NITI Aayog said the difference could compound into a total income gap of Rs 9.7 lakh over 10 years.
The report said information about these potential returns from skilling “rarely reaches learners when choices are being made”, even though the difference can have a significant impact on lifetime earnings.
Social stigma keeps young people away from vocational courses
NITI Aayog also identified social attitudes as a major barrier to skilling.
Vocational education, Industrial Training Institutes (ITIs) and diploma courses are often viewed by parents, students and peers as “second-tier” options, the report said.
It added that career decisions are often driven by examination scores, family preferences and the perceived cost of acquiring additional skills instead of aptitude, interests or long-term career opportunities.
The lack of information about available courses and training programmes is another concern.
The report said about 47% of women and 43% of youth are NEETs, while 36% of higher-education students, 52% of formal workers and 55% of informal workers do not pursue skilling. Lack of awareness about the right programmes is among the top three reasons for this, it said.
NITI Aayog also said 8.7 crore individuals aged between 15 and 29, or 11% of the population outside the labour force, fall under the NEET category.
The Aayog later clarified that this figure should not be interpreted as a measure of unemployment. It said the NEET category in the report refers to people “not seeking employment” and therefore cannot be added to the unemployment rate.
The clarification added that unemployed people are a separate category drawn from a different population base.
NITI Aayog wants skilling linked directly to jobs
The think tank said existing skilling programmes need to move beyond measuring enrolment and course completion. Greater emphasis should instead be placed on placements, income and career progression, it said.
NITI Aayog recommended moving towards demand-driven, industry-backed programmes and expanding general employability and entrepreneurship training.
This should include digital literacy, financial literacy and workplace readiness, according to the report.
It also called for targeted reskilling for workers in sectors facing technological disruption or structural decline, including parts of mining and traditional automobile manufacturing.
For these workers, skilling may need to be combined with transitional income or unemployment support to help them move into new jobs, the report said.
The think tank also recommended greater focus on high-growth sectors such as green industries and electric vehicles, along with more apprenticeship opportunities.
More autonomy for ITIs, stronger industry partnerships
NITI Aayog said industry needs to play a bigger role in shaping education and skilling programmes.
It recommended setting up greenfield public-private partnership (PPP) skilling universities, similar to the World Skill Center in Odisha, and dedicated PPP skilling hubs within existing public campuses.
The report also called for reforms in existing colleges through partnerships with industry to co-design academic tracks.
For ITIs, NITI Aayog recommended greater academic autonomy so institutions can update their courses based on local demand. It also proposed administrative autonomy to allow ITIs to contract trainers and simplify the procurement of tools.
The larger goal, according to the report, is to shift India’s skilling system from a supply-driven model to one that is more closely linked to industry demand, employment outcomes and changing job opportunities.
India’s graduate workforce is facing a widening gap between what students study and the jobs they eventually take up, with NITI Aayog calling for major changes to generic degree programmes and the country’s skilling system, according to a report by The Indian Express.
In its report, ‘Reimagining Skilling for Viksit Bharat’, released on Saturday, the government think tank said only 8.25% of graduates are employed in roles aligned with their qualifications. It also flagged high unemployment among educated youth and said degrees such as B.A., B.Sc. and B.Com. often have weak links to jobs.
NITI Aayog said India’s higher and technical education system faces a “fundamental disconnect” between what is taught and what the labour market demands. It said outdated curricula often fail to translate degrees, diplomas and certificates into employability.
The report, citing data from the Economic Survey 2024-25, said only 8.25% of graduates are employed in roles aligned with their qualifications.
Don't Miss: Expired food, pests, foul smell: Posh Delhi hotels booked for BRICS summit under FSSAI lens
Generic degrees dominate undergraduate education
NITI Aayog highlighted the large number of students enrolled in traditional undergraduate courses. Of the 3.4 crore students enrolled in undergraduate programmes, 1.13 crore are studying B.A. alone. Combined enrolment in B.A., B.Sc. and B.Com. exceeds 2 crore, the report said.
The think tank has recommended redesigning these courses around industry needs, suggesting applied specialisations such as B.A. Hospitality, B.Sc. Applied Technology and B.Com. Analytics.
It also called for scaling up Apprenticeship Embedded Degree Programmes (AEDP) and Work-Integrated Degree Programmes (WIDP) to give students greater exposure to workplaces while they study.
The problem is also reflected in graduate unemployment figures. NITI Aayog said unemployment among graduates stands at 13%, while 20.4% of graduate women are unemployed. Both figures are significantly higher than the national unemployment rate of 3.2%.
The State of Working India report by Azim Premji University had also flagged rising unemployment among educated youth. It showed that unemployment among graduates below the age of 25 rose from 35% in 1983 to 39% in 2023. Among graduates aged 25 to 29, it increased from 12% to 20% during the same period.
Finance Minister Nirmala Sitharaman had also highlighted the gap between degrees and employability in an interview with The Indian Express on August 17. She said the education system was producing certified or degree-holding youngsters who were not yet ready to handle themselves either as employees or entrepreneurs. “That’s the fix we need,” she said.
Skilling can mean higher starting pay
The NITI Aayog report also highlighted the financial impact of additional skilling.
Citing Boston Consulting Group’s Higher Education Survey, the report said a person with a generic undergraduate degree but no additional skilling earns an average starting salary of Rs 22,000 per month.
For a generic undergraduate who also undergoes skilling, the average starting salary rises to Rs 29,000 per month. Both categories were estimated to have annual salary growth of 3.2%.
This Rs 7,000 monthly starting salary gap can become significant over time. NITI Aayog said the difference could compound into a total income gap of Rs 9.7 lakh over 10 years.
The report said information about these potential returns from skilling “rarely reaches learners when choices are being made”, even though the difference can have a significant impact on lifetime earnings.
Social stigma keeps young people away from vocational courses
NITI Aayog also identified social attitudes as a major barrier to skilling.
Vocational education, Industrial Training Institutes (ITIs) and diploma courses are often viewed by parents, students and peers as “second-tier” options, the report said.
It added that career decisions are often driven by examination scores, family preferences and the perceived cost of acquiring additional skills instead of aptitude, interests or long-term career opportunities.
The lack of information about available courses and training programmes is another concern.
The report said about 47% of women and 43% of youth are NEETs, while 36% of higher-education students, 52% of formal workers and 55% of informal workers do not pursue skilling. Lack of awareness about the right programmes is among the top three reasons for this, it said.
NITI Aayog also said 8.7 crore individuals aged between 15 and 29, or 11% of the population outside the labour force, fall under the NEET category.
The Aayog later clarified that this figure should not be interpreted as a measure of unemployment. It said the NEET category in the report refers to people “not seeking employment” and therefore cannot be added to the unemployment rate.
The clarification added that unemployed people are a separate category drawn from a different population base.
NITI Aayog wants skilling linked directly to jobs
The think tank said existing skilling programmes need to move beyond measuring enrolment and course completion. Greater emphasis should instead be placed on placements, income and career progression, it said.
NITI Aayog recommended moving towards demand-driven, industry-backed programmes and expanding general employability and entrepreneurship training.
This should include digital literacy, financial literacy and workplace readiness, according to the report.
It also called for targeted reskilling for workers in sectors facing technological disruption or structural decline, including parts of mining and traditional automobile manufacturing.
For these workers, skilling may need to be combined with transitional income or unemployment support to help them move into new jobs, the report said.
The think tank also recommended greater focus on high-growth sectors such as green industries and electric vehicles, along with more apprenticeship opportunities.
More autonomy for ITIs, stronger industry partnerships
NITI Aayog said industry needs to play a bigger role in shaping education and skilling programmes.
It recommended setting up greenfield public-private partnership (PPP) skilling universities, similar to the World Skill Center in Odisha, and dedicated PPP skilling hubs within existing public campuses.
The report also called for reforms in existing colleges through partnerships with industry to co-design academic tracks.
For ITIs, NITI Aayog recommended greater academic autonomy so institutions can update their courses based on local demand. It also proposed administrative autonomy to allow ITIs to contract trainers and simplify the procurement of tools.
The larger goal, according to the report, is to shift India’s skilling system from a supply-driven model to one that is more closely linked to industry demand, employment outcomes and changing job opportunities.