Business is booming in India’s $117 billion education industry and new colleges are popping up at breakneck speed. Yet thousands of young Indians are finding themselves graduating with limited or no skills, undercutting the economy at a pivotal moment of growth.

Desperate to get ahead, some of these young people are paying for two or three degrees in the hopes of finally landing a job. They are drawn to colleges popping up inside small apartment buildings or inside shops in marketplaces. Highways are lined with billboards for institutions promising job placements.

It’s a strange paradox. India’s top institutes of technology and management have churned out global business chiefs like Alphabet Inc.’s Sundar Pichai and Microsoft Corp.’s Satya Nadella. But at the other end of the spectrum are thousands of small private colleges that don’t have regular classes, employ teachers with little training, use outdated curriculums, and offer no practical experience or job placements, according to more than two dozen students and experts who were interviewed by Bloomberg. 

Worldwide, students are increasingly pondering the returns on a degree versus the cost. Higher education has often sparked controversy globally, including in the US, where for-profit institutions have faced government investigations. Yet the complexities of education are acutely on show in India.

It has the world’s largest population by some estimates, and the government regularly highlights the benefits of having more young people than any other country. Yet half of all graduates in India are unemployable in the future due to problems in the education system, according to a study by talent assessment firm Wheebox.

An outsized problem

Many businesses say they struggle to hire because of the mixed quality of education. That’s kept unemployment stubbornly high at more than 7 per cent even though India is the world’s fastest growing major economy.  Education is also becoming an outsized problem for Prime Minister Narendra Modi as he attempts to draw foreign manufacturers and investors from China.  Modi had vowed to create millions of jobs in his campaign speeches, and the issue is likely to be hotly debated in the run up to Lok Sabha elections in 2024. 

“We do face a challenge in hiring as specific skill sets required for the industry are not currently easily available in the market,” said Yeshwinder Patial, director for human resources at MG Motor India.

The complexities of the country’s education boom are on show in cities like Bhopal, a bustling metropolis of about 2.6 million. Massive billboards with private colleges promising young people degrees and jobs are ubiquitous. “Regular classes & better placements: need we say more,” says one such advertisement.

Promises like this are hard to resist for millions of young men and women dreaming of a better life in India’s dismal employment landscape. Higher degrees, once accessible only to the wealthy, have a special cachet in India for young people from middle and low-income families. Students interviewed by Bloomberg cited a string of reasons for investing in more education, from attempting to boost their social status to improving their marriage prospects to applying for government jobs, which require degree certificates from applicants.

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One Bhopal resident, twenty-five-year-old Tanmay Mandal, paid $4,000 for his bachelor’s degree in civil engineering. He was convinced the degree was a pathway to a good job and a better lifestyle. He wasn’t deterred by the fees that were high for his family, which has a monthly income of only $420. Despite the cost, Mandal says he ended up learning almost nothing about construction from teachers who appeared to have insufficient training themselves. He couldn’t answer technical questions at job interviews, and has been unemployed for the last three years.

“I wish I had studied from a better college,” said Mandal. “Many of my friends are also sitting idle without a job,” said Mandal.  He still hasn’t given up. Even though he didn’t find his last degree useful, he wants to avoid the disgrace of being unemployed and sitting idle. So, he’s signed up for a master’s degree at another private institution because he believes more degrees can at least enhance his social status. 

In the heart of Bhopal is a bustling market with institutes training for civil services, engineering and management. Students said they had enrolled in these courses to upgrade their skills and boost chances of better career opportunities after regular degrees didn’t get them the jobs of their choice. 

One of Bhopal's educational institutions came under a particularly sharp spotlight in recent years because it was involved in a case that went all the way up to India's highest court. In 2019, the Supreme Court barred the Bhopal-based RKDF Medical College Hospital and Research Centre from admitting new students for two years for allegedly using fake patients to meet medical college requirements. The college initially argued in court that the patients were genuine, but later submitted an apology after an investigative panel found that the purported patients weren’t really sick. 

‘’We have noticed a disturbing trend of some medical colleges in projecting fake faculty and patients for obtaining permission for admission of students,” the court said in its judgement. The medical college didn’t respond to request for comment.

The medical school is part of RKDF Group, which has wide network of colleges in areas from engineering to medicine and management. The group faced another controversy last year. In May last year, the Hyderabad police arrested the vice chancellor of RKDF Group’s Sarvepalli Radhakrishnan University as well as his predecessor for alleged involvement in giving out fake degrees. Still, students could be seen flooding into several of RKDF’s institutions in Bhopal. One branch had posters of their “Shining Stars” — students who were placed in jobs after graduating.

The SRK University and RKDF University of the RKDF group didn’t respond to multiple requests for comment. On its website, the group says it provides quality education through teaching and imparting practical skills while making an effort to provide strong infrastructure and facilities. 

Elsewhere in Bhopal, was another college operating out of a small residential building. One of the students who studied there said it was easy to secure admission and get a degree without attending class. 

Education sector’s outlook

India’s education industry is projected to hit $225 billion by 2025 from $117 billion in 2020, according to the India Brand Equity Foundation, a government trust. That’s still much smaller than the US education industry, where spending is estimated to be well above $1 trillion. In India, public spending on education has been stagnant at about 2.9% of GDP, much lower than the 6 per cent target set in the government’s new education policy. 

The problems at colleges extend across the country, with a string of institutions in various states drawing official scrutiny. In some parts of India, students have gone on hunger strikes protesting the lack of teachers and facilities at their institutes. In January, charges were filed against Himachal Pradesh-based Manav Bharti University and its promoters for allegedly selling fake degrees, according to a press release from the Directorate of Enforcement. Manav Bharti University didn’t respond to request for comment.

While institutions publicize campus placement to students, many aren’t able to fulfill the promise. In 2017, one institution in the eastern state of Odisha gave fake job offers during campus placements leading to protests by students.

Anil Swarup, a former secretary for school education estimated in a 2018 article that of 16,000 colleges handing out bachelor’s qualifications for teachers, a large number existed only in name. 

“Calling such so-called degrees as being worthless would be by far an understatement,” said Anil Sadgopal, a former dean of education at Delhi University and a former member of the Central Advisory Board of Education, which guides the Centre. “When millions of young people are rendered unemployable every year, the entire society becomes unstable.”

All that’s a challenge for big business. One study by the human resource firm SHL found that only 3.8 per cent of engineers have the skills needed to be employed in software-related jobs at start-ups. 


“The experience of everybody in the IT industry is that the graduates need training,” said Mohandas Pai, the former chief financial officer of Infosys Ltd. and a board member and co-founder of private equity firm Aarin Capital. One of the companies in the Manipal Education & Medical Group that Pai is on the board of "trains a lot of people for banking. They are not job ready, they need to be trained."

Also read: Upskilling, reskilling of workforce top priority for executives in India Inc

Even though companies are looking to recruit in areas like electric vehicle manufacturing, artificial intelligence and human-machine interface, the smaller Indian universities still teach outdated material such as the basics of the internal combustion engine, said Patial. “There is a gap between what the industries are looking at and the course curriculum they have gone through.”

India has regulatory bodies and professional councils to regulate its educational institutions. While the government has announced plans to have a single agency that will replace all existing regulators, that’s still at the planning stage. The education department didn’t respond to a request for comment. 

New education policy

The Union government is also trying to address the shortcomings in the education sector in its 2020 new education policy, committing to improve the quality of its institutions. It’s also begun the process of allowing leading foreign universities to set up campuses and award degrees in the country. 

In the meanwhile, finding work for this generation remains a challenge. Unemployment is a ticking time bomb because close to a third of the nation’s youth aren’t working, studying or under training, according to the World Bank.

More read: The New Education Policy is positive on intent, but pedagogical questions remain 

Pankaj Tiwari, 28, says he paid ₹1,00,000  for a master’s degree in digital communication because he wanted a job and higher status in society. That was a big outlay for his family, which has an annual income of ₹4,00,000. Though his college had promised campus placements, no company turned up and he’s still unemployed four years later. 

Read more: 87.7% of students think new education policy will bring positive change: Survey 

“If I had received some training and skills in college, my situation would have been different. Now, I feel like I wasted my time,” said Tiwari. “I just secured certificates on paper, but those are of no use.”