Rising Underemployment and Disguised Unemployment in India: A Growing Concern

Post Graduates/PHDs apply for HS level Grade III ADRE Exams” says an officer in a prestigious college in Guwahati.

"There are a different category of Nepotism and favouritism too”, she continued.

An officer from a prestigious college in Guwahati recently pointed out a concerning trend: “Postgraduates and PhD holders are applying for high school-level Grade III ADRE exams,” reflecting the increasing prevalence of underemployment among highly educated individuals. She also noted the existence of nepotism and favoritism in the job market, exacerbating the issue.

India's labor market is facing a dual challenge of underemployment and disguised unemployment, which are hindering the nation's economic growth. Underemployment refers to people working in jobs that do not fully utilize their skills or provide adequate working hours, while disguised unemployment occurs when more individuals are employed than necessary, especially in low-productivity sectors.

According to a National Sample Survey Office (NSSO) report, this surge in underemployment is driven by several factors, including a mismatch between skills and job requirements, economic slowdowns, and rapid technological advancements. Disguised unemployment is particularly prevalent in the agricultural sector, where a large portion of the rural workforce is engaged in low-productivity activities. Additionally, the informal economy—characterized by poor job security, low wages, and inadequate working conditions—further contributes to this challenge.

The government has acknowledged these issues and is implementing measures such as skill development programs, the promotion of startups, and investment in infrastructure. However, experts emphasize the need for scaling up these efforts and improving their implementation. Structural reforms in education, labor laws, and industrial policies are essential to better align the workforce with market demands.

As India strives to become a USD 5 trillion economy, addressing underemployment and disguised unemployment is critical. Comprehensive and sustained reforms are required to ensure that the workforce is effectively engaged, contributing to the nation's overall economic growth and development.