New Delhi, May 11 -- For more than 30 years, India's growth story has rested on the promise of a large workforce of young people - but whether that promise is being realised remains an open question. A new report published by the Centre for Sustainable Employment at Azim Premji University - State of Working India 2026 - takes a comprehensive look at how young Indians move from education into the labour market - and asks whether India is successfully converting its demographic dividend into an economic one. The report documents a striking paradox: even as educational attainment has expanded dramatically, the transition to stable, gainful employment remains uncertain - with high graduate unemployment, limited job creation outside agriculture, and persistent gaps between aspirations and opportunities. The report's lead author Rosa Abraham spoke about their findings on a recent episode of Grand Tamasha, a weekly podcast on Indian politics and policy co-produced by HT and the Carnegie Endowment for International Peace. Abraham, an economist, heads the Centre for Sustainable Employment. Her research focuses on informal work and women's employment, with a particular interest in issues at the intersection of labour statistics and women's work. Before joining the university, she worked as a researcher at the Ashoka Trust for Research in Ecology and Environment and taught at the Madras School of Economics. Abraham told host Milan Vaishnav that India's school-to-work transition is not proceeding as smoothly as it should. "There is both a supply-side constraint and a demand-side constraint. On the supply side, what we have seen is this massive influx of graduates into the job market. That has come because of the huge expansion of colleges, especially after liberalization, with a lot of private universities and private colleges," she said. "If skills are defined just as having a degree, then we have ticked that box. But the constraint is transitioning that skilled workforce into employment." She noted that if one tracks graduates, only about seven percent of them find salaried employment within a year. "On the demand side, we just have not created enough jobs to employ this highly educated workforce," Abraham claimed. "If you look at India's growth story, most of the jobs have been in construction and low-productivity services like retail, wholesale trade, transport, and communication. For a graduate, there is a sense that only certain kinds of jobs are suitable for them. When those jobs are not available, they tend to stay back and not really engage with the labour market immediately." The report also detected a concerning dip in young men's educational attainment. "When I first saw the falling share of men in higher education, my thought was that maybe this was a response to stagnating graduate earnings," Abraham recounted, citing the fact that entry-level salaries for young graduate men have fallen in the past ten years. However, she said that real reason has to do with economic distress. According to Abraham, data from the government's Periodic Labour Force Survey (PLFS) found that in 2017, about 58% of young men who had withdrawn from education said they needed to support household income. By 2023, that number had increased to about 72%. On the question of artificial intelligence (AI) and its potential to disrupt India's labour market, Abraham clarified that she did not think it was the most immediate threat to employment in India. "The sectors where AI is likely to displace workers are probably not major employers in India. If you look at computer and information services, or even high-end manufacturing services, they employ less than 10 to 15% of our workers," she explained. "The real challenge is that we have this supposedly high-skilled, or at least highly educated, labour force, and we are not able to engage them even in basic factory-floor-level jobs." Abraham argued that the more immediate challenge facing India is the degree of high graduate unemployment, "and making sure that we are able to engage this workforce in high-earning and secure jobs, which we just have not been able to do."...