India’s Economy Faces a Jobs Crisis as Degrees Turn into Despair
A public meeting of RJD leader Tejashwi Yadav in Bihar.(Image Tejashwi Yadav on X)
As U.S. tariffs hit India’s exports and domestic investment falters, economists warn that a 6.5% GDP growth rate is masking a deeper unemployment crisis—especially among the youth and skilled graduates.
By AMIT KUMAR
New Delhi, October 27, 2025 — When former Finance Minister P. Chidambaram writes about the Indian economy, policymakers should pay attention. In his recent Indian Express column, he issued a sharp warning: if India’s growth continues to hover around 6–6.5%, the economy will fail to generate enough jobs. His argument is simple yet alarming—GDP growth without employment is no growth at all.
India’s infrastructure projects may be multiplying in number, but their quality, he argues, leaves much to be desired. Roads that collapse after one monsoon are not a sign of development but of decay. “Quantity without quality,” Chidambaram cautions, “creates an illusion of progress.”
Tariffs, Textiles, and Trouble
Recent U.S. tariff actions have only worsened the situation. The 50% tariff imposed by the Trump administration on Indian textile exports has hit manufacturing clusters in Surat and Tiruppur hard—two regions heavily dependent on the American market. As a result, thousands of jobs, especially for young and semi-skilled workers, have vanished almost overnight.
In contrast, Bangladesh’s textiles continue to enjoy low tariff access, making their products far cheaper in the U.S. market. The result: India’s export edge has eroded, and with it, one of the country’s most labor-intensive job engines.
Technology and the Great Layoff
The story is no better in the IT sector. As global companies double down on artificial intelligence investments, many have trimmed human staff to cut losses. India’s IT workforce—once the pride of a rising middle class—is facing large-scale layoffs, further squeezing job opportunities for engineering and management graduates.
Degrees Without Jobs
The crisis is perhaps best symbolized by a haunting image from Madhya Pradesh: PhD and MBA holders lining up for police constable positions paying ₹25,000 a month—jobs meant for Class 10 or 12 graduates.
As former CAG official P. Sesh Kumar wrote in anguish, it was “a scene straight out of a tragicomic film”—young men and women with advanced degrees standing in serpentine queues, clutching neatly folded certificates, desperate for any employment they could find.
Private Investment Freeze
Chidambaram’s critique extends beyond joblessness. He highlights how India’s private sector, sitting on record cash reserves, is refusing to invest domestically. Corporates are expanding abroad but not at home—suggesting a deep crisis of confidence in the policy environment. Gross Capital Formation, a key metric of productive investment, has sharply declined since the UPA years. Without renewed private investment, job creation will remain a mirage.
The Politics of Populism
As unemployment deepens, political parties are responding with cash transfers and pre-election “lollipops”—₹3,000 monthly allowances, pension hikes, and loan waivers. These may soothe public anger in the short term, but they do not fix the structural rot. When welfare replaces work, the warning lights of an economy begin to flash red.
A Nation at an Economic Crossroads
India’s 6.5% growth rate may look stable on paper, but beneath the numbers lies an uncomfortable truth: millions of educated youth are directionless, industries are losing competitiveness, and private capital is in retreat. The economy is coasting on momentum, not expanding in spirit.
If these warnings go unheeded, India risks entering a decade of jobless growth—where its young, qualified citizens stand in long queues not for opportunity, but for survival.
(This is an opinion piece, and views expressed are those of the author only)
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