CJP-led Protests in Delhi | India's Exam System, Youth Unemployment & the Hidden Economic Cost

[00:00:00]Hello and welcome to Vion world is one.

[00:00:02]I'm Kanushka Sarkar and today we are looking beyond the political headlines of the BJP led protest in Delhi to unpack some of the underlying issues, human capital and economic friction.

[00:00:13]When paper leaks, exam delays and youth unemployment stall millions of job seekers, what does does it actually cost India's broader economy? Joining us today to break down the numbers, the market impact and policy solutions is Mr. Jayant Krishna, senior fellow at the Center for Strategic and International Studies. Uh Mr. Krishna, thank you so much for joining me on Vion today.

[00:00:34]Firstly, the BJP led movement it was sparked partly by public remarks that were made comparing unemployed youth to cockroaches. But before we tap into the deep-seated anxiety over youth unemployment that is among reasons that led to the protest, what are your your first thoughts when you hear the word Gen Z?

[00:00:54]>> See, uh you know, a lot of people uh the people who govern the country uh which includes uh politicians, ministers, uh bureaucracy, they you know, many of them feel that Gen Z is a irresponsible generation. I don't believe so. You know, uh you know, they are at the receiving end and uh of you know, all the issues that happen with the examination. India is a very, very competitive country. Uh you know, some people say for example, exams like IIT-JEE and so on and so forth. You could if you can crack that, you can crack the toughest examinations for engineering entrances anywhere in the world. If you can crack AIIMS entrances, you could perhaps crack the best-in-class uh uh medical institutions anywhere in the world. So, the standards are so high in India uh that, you know, uh uh it is it it it you know, uh it's it's a very, very tough uh situation what the Gen Z faces. Uh you know, jobs not growing at a pace one should grow and and and therefore, you know, you can't blame them at all. Uh you You uh for because they are the ones who face the onslaught from all uh ends, you know.

[00:02:01]>> Right. Now, you've already spoken about the difficulty level of exams, and what follows is unemployment in a lot of cases. In fact, millions of young adults they spend about two to four of their prime years preparing and re-preparing for exams, and that doesn't exactly add to the output or the real GDP. What's the opportunity cost of this delayed labor entry? How much human capital and productivity does the economy lose?

[00:02:28]>> So, there multiple, you know, elements to this these, you know, the economic figures. If you look at, you know, I mean, if you look at the entire coaching industry, the size, which includes both the learning part as well as accommodation, as well as the testing fee, you know, most of the exams have a hefty testing fee. So, all these costs put together, if you look at the Indian [clears throat] households spend about 3.5 lakh crores on on on these expenses put together, right? industry, examination industry, you know, the accommodation, everything put together. So, this is 3.5 lakh crore is not a small sum. It is actually borne by, you know, medium class, lower middle class households, which can barely afford to incur that kind of a cost. But in a competitive country like India, they have no choice but to put their children into such coaching, then a subsequently examinations, and so on so forth, you know. And if the paper leakage which happens or examination is cancelled and redone, right? It becomes all sunk cost.

[00:03:30]Who pays for it, right? I mean, these costs are to be absorbed by the hapless parents, right? So, it is it is, you know, leakage has a huge economic cost to my mind, you know, which, you know, no governments will bear.

[00:03:43]Governments can at best bear the retesting cost, right? But the overall spend by households, by the average family, by middle class people, lower middle class people is many, many, many times the money actually spent by retesting which the government incurs, right? So, I think I think that is the irony and which you know very few people seem to understand in the country, you >> Um Mr. Krishna, like you said, families who send their children to coaching centers, to hostels, they end up spending about 3 and 1/2 lakhs annually on this entire affair. And despite >> 3.5 lakh crores, you know.

[00:04:21]>> Correct. Um >> Yeah.

[00:04:23]>> Now, according to MOSPI survey estimates, despite all of this cost that has gone into it, nearly 40% of secondary students, they now rely on private coaching. Urban families, like you said, they are allocating about 5 to 10% of total monthly household spending on education alone. Now, when these lower and middle-income families take on debt to cover these costs, what are the mental health and financial consequences when systemic paper leaks like this abruptly reset a student's entire timeline?

[00:04:53]>> See, it's it's a very important question you've asked. And and and the solution, you know, the issues are manyfold. For example, the quality of education in most government schools is is is not good enough, right? You know, otherwise, let me tell you that no country in the world has such a large coaching industry as we have in our country. Why children Why families send children for these coachings? Because school teaching is not good enough and they can't crack a competitive exams just by what is taught in school, especially in the government schools. You know, some of the creamy layer of the private schools, that could be an exception. And even there, you know, children go through coaching to to augment their standards and learning and so that they're able to crack the exam. It's a It's a It's a huge burden on on people and you know, and and and many families, as you rightly said, you know, they they you know, you know, took loan against their gold, against their fixed deposits and whatever assets they have and they go through a huge mental crisis, right? But they don't have a choice if their children have to do well, otherwise it becomes almost a generation wasted if the children don't crack these competitive exams. So, you know, the families are you know, have have a it's a Hobson's choice people have, and you know, and imagine, you know, there's no no city of Kota like city anywhere in the world, you know, where children are sent at a very very tender age, and we virtually kill the child in you know, in our in our students, you know, and so I think I think it's it's it's it's a huge cost both the families, the parents, as well as children. We all know about number of suicides that happen in Kota alone. It's a very very pitiable situation, I I would think, you know, and eventually we have to you know, lay a lot of focus in our quality of education that gets rendered, and especially in government schools, you know, of state boards, of CBSE, and CBSE is still state better, but state boards barring a few exceptions, the quality is very very poor, and and and families have to pay a price of poor quality of government education, you know.

[00:06:53]>> Mr. Krishna, you said families are having to pay the price of poor quality education in schools and colleges. You said that there's no other city in the world like we have Kota, and that parents don't have a choice if they want their child to do well. Now, India is among the fastest growing major economies, but the State of Working India 2026 report that's by Azim Premji University, it found that graduate unemployment that still hovers around 40% for uh the 15 to 25 age group, and 20% for 25 to 29-year-olds. Why do you think that educated young people are still struggling to find stable employment?

[00:07:31]Why are they having to take to streets?

[00:07:34]>> So, there are two reasons. One is the poor employability of our graduates.

[00:07:38]That itself is a very very large question, right? They may have degrees, but are they employable? A very small percentage of those people who do who do graduation in the country are actually employable. That's one issue. And second issue is, you know, more and more people knock the doors of you know, seek jobs and and and knock the doors of employment exchange exchanges every year. But, you know, there are very few new jobs getting created, you know. The economy is growing, but the new jobs are not commensurate with the growth in the economy. One reason is most sectors that if we look at if you look at the manufacturing sector, you know, all the investments that the country seem to be getting, they are they are capital intensive. They are not manpower intensive at all because of the huge degree of automation, because of AI, because of robotics, because of internet of things and so on so forth. So, you know, such a huge automation requires very very few people and therefore while you know, it they add to the GDP, these investments, especially in the manufacturing sector, they don't add to the number of jobs. Even in the service sector, IT and IT-enabled sector, which is the largest employer, you know, with the AI with the advent of AI, more and more code is getting generated by AI agents today vis-à-vis the manually generated code by programmers, right?

[00:08:51]So, these are these are huge issues. The elasticity of each sector to generate more employment per unit of investment continues to be poor and it's becoming poorer with with the increased automation and so on so forth. And that's the reason why you see economy growing at 7 7 and 1/2 percent, but jobs not keeping pace with the you know, those jobs. Perhaps what government needs to do is invest more in sectors which are which still continue to be more manpower intensive like leather, like apparel and a few sectors where automation has not created havoc so far.

[00:09:28]>> Yeah.

[00:09:29]Mr. Krishna, you said that many of those who study in the country do not have degrees that make them really employable. Of course, automation is one of the factors, but speaking of degrees and the exam uncertainty that we have been seeing, is that pushing more Indian families toward private education and foreign universities? Could these systemic issues in public examination indirectly increase household debt and accelerate the education-related capital outflows?

[00:09:58]>> Yeah, absolutely. I mean, some estimate I read somewhere sometime back, and it said the total outflow of Indian money that happens every year because of Indians going out to study, right? If all that amount is gets accumulated, it's it's big enough to open a few couple of IITs and a few IIMs every year. That such is the outflow. But, you know, especially people who can afford, you know, foreign education, you know, looking at the difficult standards of entry in our country, and you know, and in other institutions which are not the A and A+ category institutions, there the quality of delivery continues to be poor with poor employability of the graduates that they churn out. You know, people who can afford, they take that easier route of sending their children abroad, you know, and and and and today more and more jobs are getting global, companies are global, they're multinationals, you know, and they want their children to embrace that global, you know, global perspective right from a early stage itself. You know, I think that's the reason why it is happening, but surely, you know, if there are better, you know, universities if we like some of these private universities which have come up in the country, they they they really have a good standard, especially some of those liberal arts universities and and science and technology universities, some of them are very very good. But, the the difference is so huge between an average Indian university and and and the creamy layer of our universities. I think that needs to be addressed. That's very very important to my mind.

[00:11:26]Otherwise, this flight of talent and flight of capital away from India for overseas education will continue. The government of India under new education policy has thrown on thrown open the doors to foreign universities of a certain standard and above to come and set shops in our country. That's also beginning to happen. Not the very best of them, but some of them are setting up campuses here, you know, and and that will only partly address the problem, not fully. The real solution lies in our own universities moving up the value chain and and and and improving their standards big time.

[00:11:58]>> Yeah, I was actually going to bring that up. You know, people moving to foreign universities, there's of course a privilege that only a few affluent people have. It's not for everyone. So, coming back to the public infrastructure then, examining infrastructure like the NTA or CBSE, they operate on state budgets and vendor contracts, right? So, in terms of cancellation, legal battles, and then there's re-examinations, they carry direct fiscal and operational costs. Who pays for that?

[00:12:25]Beyond the emotional cost for students, what's the direct financial cost for the government and also for the taxpayers?

[00:12:32]>> So, so one is one is the cost of redoing the exam. That may not be much. That would be 1,000 crore a couple of 1,000 crores. That's what the government will spend if the exam is canceled and they have to do it again. But, let's not forget there's a much much bigger component component of the cost which families have to bear in case of cancellation and re-exam and so on and so forth, you know.

[00:12:51]Large percentage of India lives in villages and kasbas and so on and so forth, right? Which are not the places where the examination centers happen.

[00:12:58]The logistics challenges, the re-preparation, you know, the continuation of coaching to to to account for the learning gaps. I think all these costs are much much much higher than what the government has to incur if if a re-exam has to happen. So, I think I think you know, we have to look at the overall cost and not Let's not forget the cost which recruiter pays, you know. The the people who are for whom the exam is being conducted, you know.

[00:13:25]You know, it became the onboarding of students post re-exam becomes uh more difficult. It becomes prolonged. And and and you know, they are deprived of a full cycle, you know, where they work on these candidates in terms of their their education and so on so forth for you know, and so you know, everybody pays the price. The households, the families, students themselves, the government as well as well as recruiters you know, for whom these exams are you know, it could be medical colleges, it could be engineering colleges or eventually even even even the corporate sector pays the price for it, you know, and I think I think it it it warrants a very very serious discussion in a country like India, you know, that that's that's what I feel.

[00:14:12]>> You know, we've spoken about all of the challenges that exist in the education system. But do you think India can really achieve its demographic dividend without fixing education and jobs? What do you think are the most urgent reforms that are needed to ensure that this young population becomes an economic strength instead of you know, a source of frustration at this point in time?

[00:14:33]>> See, that's that's a good question. You know, we've always been battling with this that how does India ensure that our population does not remain a curse, it becomes a blessing, right? How do we educate our people better? How do we skill our people better? See, let's let's you know, this entire opportunity this dividend demographic dividend that we keep on talking about, right? It is not a endless window of opportunity unless we leverage it in in 20 in two decades or so, you know, India's population growth rate has already come down and after two two and a half decades perhaps it will the growth will become negative which means the population will start shrinking, right?

[00:15:11]So, it's a limited window that we have on which you know, we have to improve the quality of education. We have to bring take more and more students towards skill development rather than a traditional university education, right?

[00:15:23]Because because uh you know, jobs are happening in that sector. Not only that, we have to as a country we have to work at formalizing the job sector. See, jobs are getting created in India, but the problem is most of those jobs are in unorganized and informal sector, which are not aspirational jobs for people.

[00:15:40]So, I think India has to fight a million mutinies, you know, when it comes to education and job sector and so on and so forth. And and the very best of talent in the country needs to uh you know, they need to put their uh minds together. There's no there are no easy solutions, but you know, I think it's very important that, you know, people uh the best-in-class people collaborate and and and work towards reforms in our education system. Big ticket reforms, not just marginal reforms here and there, as well as improving the employability of our students. And uh and and and how do we ensure that more jobs are created for a ever-expanding number of people who knock the doors of the job market every year in the country.

[00:16:19]>> Right. Uh Mr. Krishna, thank you so much for joining me today and helping with all of those inputs. We'll continue to track the story with you.

[00:16:26]>> It's been a pleasure.

[00:16:28]>> All right, that wraps up this discussion. The economic ripple effects of youth anger and testing exam systems reach far beyond the headlines, affecting everything from consumer spending to long-term labor productivity. We on will keep bringing you updates as the story unfolds. Thank you for watching.

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