DNA Money Edit: Rise in number of fresh graduates looking for work adds to lay-off woes

First, it was the IT giants including Infosys, Wipro, Capgemini and Microsoft which reportedly handed out pink slips to employees on account of rigorous technological advancements and US headwinds. Then the new-age firms such as Snapdeal, Practo, Craftsvilla and YepMe, touted to be the showpiece of huge employment potential till recently, followed by job-cut spree. Now it seems there is an alarming rise in fresh graduates looking for work.

A report by brokerage JM Financial titled 'What do I do with my degree?', citing the labour department figures, has said the ratio of the number of degree-holders (undergraduates and above) to new jobs created has worsened from 9x for the three-year period FY11-13 to 27x for FY14-16. "The gap between demand for labour and its supply can only increase as the number of graduates far outnumber the jobs being created," it says.

In a silver lining, Nasscom, an apex body of software exporters, has predicted there will be 250,000 tech start-up jobs created by 2020, but the question is: will that be enough? Even Reserve Bank of India governor Urjit Patel had said he was not "overly pessimistic" about employment scenario in the IT sector as he believes as start-ups can compensate for the job losses.

However, the problem is more structural. Nothing can work if the current and coming workforce misses out on right skills, at a time when demand remains almost stalled in comparison to the number of people seeking jobs. The government has taken up a laudable initiative of Skills India to equip youngsters to face the new-world challenges. Instead of focusing on traditional college education, the focus should be fostering entrepreneurship and right skills.