Unemployment rate is higher amongst highly educated rural Indians

Worst fears that there exist huge disparities in the quality of education between rural and urban India (aka Bharat and India) have finally come true. Labour Ministry data indicates that higher education and degrees are not helping rural job aspirants to get their coveted jobs.

Not only unemployment among rural graduates and post-graduates is higher, but also they lack basic skill-sets to fill the demands of market economy. The dangerous trend, if anything, may offset the gains by India at the literacy front.

While the country has added more literates in rural India from 58.7% in 2001 to 68.91% in 2011, the job market hasn’t kept pace with the growing demands of job seekers from villages.

The bigger cause for concern according to the labour ministry data is: the unemployment rate among rural educated youths is higher as compared to their urban counterparts. It stands at 13.9% for rural areas against 7.6% in urban areas.

The ministry data, released on July 18 this year confirms worst fears of expanding education sector not being able to deliver quality higher education and that there existed huge gaps in skill sets acquisition in rural India.

Elaborating the rural-urban gap in job sector is further in the country Ambarish Raghuvanshi, Chief Financial Officer (CFO) at Naukri.com says, “There is less number of industries in rural areas thus fewer options are available for an educated person in rural areas.”

While the unemployment rate amongst illiterate populace rural India is just at 1.15% during 2011-2012, the percentage amongst rural populace is higher at 13.9% and 11.0% with post-graduate and graduate degrees in respectively.

Unraveling the factors behind higher unemployment rate amongst educated rural Indians, Kris Laxmikant, Chief Executive Officer, Headhunters India, explained, “After facing lot of hardships when people staying in rural remote areas acquire education, expectation for good jobs develop and restrictions occur. People who are either illiterate or less educated who could not afford education will take up any job as their family constraints are higher in comparison to those who are highly qualified.”

That economic slowdown is taking toll on job creation and disparity is not lost upon experts. Ambarish Raghuvanshi, Chief Financial Officer (CFO) at Naukri.com reckons, “Many young professionals from rural areas earlier used to get jobs in sectors like insurance that usually had more jobs but unfortunately as the economy is not doing well, these sectors are low with opportunities. So, the educated aspirants who used to get a job easily in an insurance company not sits empty handed.”

If anything, it indicates not only the lack of quality in higher education in rural areas but huge gaps in requisite skill sets to fill the requirements of job market.

Talking on the skill requirement, DK Joshi, Chief Economist at CRISIL says, “Unemployment rate is higher amongst rural Indians with higher degrees because Indian education system is flooded with educational institutions with vast number of courses which mostly do not fit into the requirements of industry. We can say that the skill which is available doesn’t match the required skill.”