By Dr. Gyan Pathak
Even as employment among the graduate-level or higher education have registered about 21 million increased in the last one year, share of working graduates in the labour market of India fell to 5 years low in September 2026 with fall in Labour for Participation to 52.26 per cent. Moreover, adding to this mystery is the drop of 30 lakh graduates who have stopped actively searching for a job.
The new data released by Centre for Monitoring Indian Economy (CMIE) shows that LFPR fell to 52.26 per cent in September 2026 after October 2021. The data also shows that, in the month of September 2026, around 10 crore persons having graduation or higher degree were employed, as against around 7.9 crore in September 2025.
LFPR rate of graduates and above workers in October 2021 was 61 per cent, which fell to 60.3 per cent in February 22, but slowly rose up to 62.5 per cent in February 2024. It has been falling since then, the data of the CMIE shows.
As for the active job seekers having graduation or above degree have sharply dropped int the last one year since September 2025. About 30 lakh fewer people are found to be actively seeking for a job. It is clear indication that graduates are above are not finding matching jobs in the labour market. Therefore, there were only two options available for them – either accept any job irrespective of quality or education, or just stop searching for jobs.
Employed graduates in October 2021 were 50.2 million while unemployed graduates actively seeking for employment ware 12.4 per cent. These figures in September 2026 are respectively 100.3 million and 9.6 million.
During the last three years, the population with graduate level or higher education grew by a compound annual rate (CAGR) of 28.6 per cent, but the matching employment grew by only by CAGR 26.8 per cent, including in farming or wage labour. According to the data salaried employment grew by just CAGR 11.9 per cent across all level of education, the CMIE data shows.
The current government data is not available, because government publishes such data in it annual report of the Periodic Labour Force Survey (PLFS). The latest available PLFS 2025 shows that among male aged 15 years and above, about 82.7% of those with a diploma/certificate, 79.1% of those with graduation and 83.1% of those with post-graduation and above as their highest level of education were in the workforce. The data is however not comparable with the earlier data since PLFS methodology has been revamped.
CMIE has given a longer comparable data, which clearly suggest a declining trend in labour participation among the persons having graduation and above degree. It clearly indicates that India has been producing more graduates than jobs.
According to a report prepared by Centre for the Study of the Indian Economy (CSIE) of the Azim Premji University, titled “State of Working in India 2026”, formal job creation has lagged far behind the influx of degree holders. It said that around 40% of young graduates in India remain unemployed.
Several other reports suggest that the proportion of working and job-seeking Indian graduates in the labour market has faced a severe structural mismatch since 2014, marked by rising graduate expansion and high youth/graduate unemployment.
The share of graduates in India’s workforce and adult population has expanded rapidly, reaching around 15% of the total labour force, but the graduate population growing by roughly 28.6% in the last three-year window alone until September 2026.
Women are disproportionally impacted, several reports suggest. About one-third of India’s 140 million graduates (roughly 45 million) are completely out of the labour force, a trend heavily driven by women where nearly 60% of female graduates remain out of the workforce due to domestic and care responsibilities.
Even the PLFS unemployment figures for 2025, shows that male graduates face an unemployment rate of 19.2 percent, roughly six times the rate among those who have not completed primary school. For female graduates, the figure is even more striking at 29.4 percent. These are not young people who have been disengaged from the labour market. They are actively seeking work. Nearly half (49.4 percent) of women with graduate and above level education (Diploma or College degree) are NEET (Not in Employment Education and Training).
According to PLFS 2025, across the broader economy, regular wage and salaried employment stands at 23.6%, self-employment accounts for 56.2%, and casual labour makes up 20.2%. This situation reveals the quality of job available for India’s workers in general and for graduate workers in particular.
It is a very serious matter especially when AI is impacting employment scenario and large number for educated persons are losing their jobs. (IPA Service)
