India needs to rethink not just its education system but also how it prepares, hires and retrains its workforce as new technologies challenge traditional models, said Sanjeev Sanyal, a member of the economic advisory council to the Prime Minister (EAC-PM).
In an interview with Mint, Sanyal, one of three full-time members in the 15-member EAC-PM, also argued there was no evidence of India’s unemployment rate rising and rejected the concept of jobless growth.
His critique comes against the backdrop of increasing concerns over exam integrity, unemployment and the future of India’s young people in an artificial intelligence (AI)-driven economy.
Indian universities should increasingly focus on practical application, cutting-edge research and innovation rather than classroom lectures, Sanyal said from his second-floor office at federal policy think tank Niti Aayog.
He added that for many young people, beginning work at age 18 while pursuing degrees alongside employment may become a more relevant model because “the application and the experience” matter more than classroom instruction.
“Remember, going to university is a purely 20th-century idea. Before the 20th century, universities were meant for an extremely small elite. It was even true as recently as 1950. It’s only from the 1950s onwards that middle-class people began going to university as a routine practice,” he argued.
The traditional model of spending several years in university attending lectures is becoming obsolete as knowledge is increasingly available online and AI can act as an effective teacher, according to Sanyal, who has authored several books, including a 2018 compilation of his essays and columns spanning economics, urban development and other topics, titled ‘India in the Age of Ideas’.
“AI is an amazing teacher... this old lecture-based system... is already outdated at multiple levels,” he said, adding that AI will simultaneously eliminate some jobs while creating new categories of work, making continuous retraining essential.
According to Unesco’s 2026 sustainability development goals report, India’s education spending remains below the levels envisaged under the National Education Policy 2020, accounting for about 14.2% of the Union government’s total public expenditure and 4.1% of gross domestic product (GDP).
Employability vs employment
The economist also argued that India’s larger problem is employability rather than the availability of jobs.
“In most countries, educated youth in the early to mid-twenties tend to have somewhat higher unemployment rates than others. It evens out, by the way, by the time they are 30 (years of age). But there is a phase when they tend to be somewhat more unemployed,” Sanyal said. “In the specific case of India… there are many reasons this happens. One of them, of course, is that this is a phase where many, many educated people take time out to write various kinds of government and other exams like UPSC, etc.” he explained.
The Union Public Service Commission (UPSC) is a constitutional body that conducts exams to recruit officers for All India Services and Central Civil Services.
India’s unemployment rate for people aged 15 years and above remained unchanged at 5.5% in June compared with May, according to the Periodic Labour Force Survey-Monthly Bulletin released in July. Urban unemployment rose to 6.6% in June from 6.4% in May, with unemployment rising among both men and women. Rural unemployment, meanwhile, eased to 5.0% in June from 5.1% in May.
In June 2025, India’s unemployment rate for people aged 15 years and above was 5.6%, while urban unemployment was at 7.1% and rural unemployment at 4.9%.
“This throwaway term that the unemployment rate is increasing… [there] is no evidence of this,” Sanyal said. “The unemployment rate, if anything, has come down over the last few years. There was a spike during Covid-19 and every indicator of unemployment suggests that it has come down, even for the group that typically has somewhat elevated unemployment, which is the educated youth.”
“The problem in India is actually not an employment-unemployment problem. It is largely an employability problem,” he countered, adding that industries continue to report difficulty in finding suitably qualified workers.
Jobless growth
On reports of India going through a phase of jobless growth, Sanyal argued that “there is no such thing as jobless growth. Ever in history. You go back and look at any period in history, and [whenever] there has been a sustained period of job creation it has also been associated with a sustained period of growth. And vice-versa. Any period of sustained growth in the history of any country has also generated jobs. They are the same thing”.
Jobless growth is a term coined by economist Nick Perna in the 1990s for a scenario of GDP expansion without commensurate job creation or with increasing joblessness.
Sanyal also said while examination systems must retain their credibility the greater challenge lies in preparing people for a world in which careers and skills constantly evolve. “Certification systems, exam systems and their integrity have to be respected and maintained,” he said. “If we are going to have to re-educate ourselves multiple times throughout the course of our lives, this is not something only for the youth.”
People are likely to remain healthy enough to work much longer than previous generations, making repeated reskilling inevitable, according to Sanyal. “Most of us, including those in the audience, will live into our 80s... which means that most of us will be fit enough to work into our 70s.”
Retirement itself could become less relevant outside traditional government employment, with people potentially entering entirely new professions later in life after acquiring fresh qualifications, he added.
He also predicted significant changes in hiring practices, saying companies increasingly need workers who can adapt quickly to rapidly changing technologies, but traditional human resources systems still rely heavily on conventional educational credentials.
“HR departments are usually not the cutting edge on the shop floor,” he said, adding that many organizations would increasingly shift hiring decisions closer to operational teams as technology-driven business models evolve.
Edited excerpts (watch the video for the full interview):
Consumer inflation has started rising after falling close to 2%. How do you view the inflation trajectory and the monetary policy response?
Consumer price inflation is heading towards 5% but still within the 2–6% range. But if it goes outside the range, then the Monetary Policy Committee will be entirely within its right to tighten monetary conditions.
I think the inflation-targeting framework is the appropriate anchor. If you look at the history of inflation in India, we have had far more stable inflation under the inflation-targeting regime than we had in earlier decades. So, I think the framework has served us well.
It also means you have to allow the exchange rate to adjust rather than trying to defend a particular currency level. With an open capital account, a country cannot simultaneously target both monetary policy and the exchange rate. This is called the “impossible trinity” problem in economics. In my view, the inflation target should remain the anchor for monetary policy.
What are the main risks of a deficit monsoon, particularly as rainfall has started below normal this year?
June was difficult due to El Niño, but rainfall improved in July. The important thing is that we had advance warning. The India Meteorological Department and international agencies had already provided forecasts, so governments and farmers had some ability to prepare.
The rainfall shortfall has now narrowed to around 16% till end July, which I would describe as being in the tolerable range, provided preparations have been made. But we should not look only at the aggregate number. The spatial and temporal distribution of rainfall is equally important. So, there will be some impact but not as much as feared.
Kharif sowing is still lagging behind last year's pace despite improved rainfall. Is that a concern?
There is clearly some lag. Kharif sowing was about 2.65 million hectares below last year’s level, at around 89.4 million hectares as of 31 July. But again, one needs to look at the rainfall distribution and the crop-wise and region-wise picture rather than simply the aggregate number.
The fact that rainfall has improved is encouraging. The question is how it is distributed over time and space, and whether farmers can take advantage of the improved conditions.
You have spoken about India’s demographic transition. What is the emerging challenge?
The emerging demographic challenge is not excessive population growth. It is sharply declining fertility.
Our highest number of births came in 2001, when around 29 million babies were born. In 2025, it was about 22.5 million. That is a very significant change.
Several states already have particularly low fertility rates, including Kerala, Andhra Pradesh, West Bengal, Sikkim, and Punjab. So we need to start thinking about the consequences of this transition.
We will have to deal with school consolidation, ageing populations, internal migration, and potentially the extension of working lives. We also need to phase out some of the outdated population-control programmes that continue in many states.
What is your view on the debate around freebies and their fiscal burden?
First of all, not everything labelled a freebie is actually one. We do need to provide certain kinds of safety nets and other transfers. So in that sense, I am not against any and every kind of transfer to the poor. You do need to create safety nets.
For instance, I’m very much in favour of public health insurance. Having said that, there is always pressure for ever more populist spending, especially at the state level. It is very easy to blame politicians, but remember that we are a democracy. We can’t blame politicians for doing what they have been elected to do.
Voters have to make informed choices. Therefore, it is the responsibility of the intellectual class—economists, media, academia—to make the case for sensible economic policy.
What is your view on cryptocurrencies and India’s approach to treating them as assets rather than currencies?
I think the Indian approach is broadly correct. Blockchain itself is a useful distributed ledger technology, with many potential applications.
But I am less convinced about some of the claims around algorithmically issued tokens. I am not convinced that algorithmic token issuance is as bulletproof as some of its advocates make it out to be.
So, I think crypto should be treated under asset-taxation rules rather than giving cryptocurrencies the status of money. There is a distinction between using a technology such as Blockchain and treating privately issued tokens as a form of currency.
In a world where the rules-based order is under strain, what should India do?
The world and history are complex adaptive systems, and they always change in utterly unpredictable ways. At turning points like ours, it becomes especially unpredictable because the normal anchors have been broken and a new arrangement has not yet been arrived at.
Under those circumstances, the best one can do is, first of all, be flexible. Create buffers where you can. Create bilateral alliances with people you think will, at least in some fields, be on the same page and willing to go on the journey with you.
Basically, you have to create optionality.
How is India trying to create that optionality?
We are negotiating trade agreements with a bunch of countries. We are also trying to diversify our energy sources. We are trying to build internal capacity wherever we can.
Is the current global institutional framework still adequate?
In an ideal world, you would want a set of global rules, and that set of global rules would run the system. That global system is severely disrupted, and has been in a state of breakdown for a while.
Even during the Covid-19 pandemic, for example, the World Health Organization did not provide leadership. So there are now serious issues about global governance.
Although India is an emerging power, we can’t claim to be rule-setters yet. What we can do is try to find forums where we can build alliances on a specific issue, and protect our interests.
India is part of several international groupings. What is the thinking behind this approach?
We operate in a very complex mix-and-match of organizations and relationships. We are in BRICS, we are also in the Quad, we are in G20, we are quite often invited to G7. We have also tried to promote the Indian Ocean Rim Association (IORA).
Why are we doing all of these things? Because we understand the existing global systems are not reliable. The G20 itself seems to have lost momentum. What we are trying to do, therefore, is create various relationships in different spaces—multi-alignment—as a substitute for an overarching global system.
You have also spoken about the need to build domestic capacity in strategic areas. Why is this important?
Atmanirbhar Bharat (the Union government’s vision for a self-reliant India) is not a 1950s view of import substitution and industrial licenses. This is a necessity of our time because of technology and resource dependence. We want to build our capacities as part of global supply chains, to encourage private Indian entrepreneurship and build in scale.
How should India approach China, given strategic concerns and the economic relationship between the two countries?
China cannot be wished away, whether we like it or not. We have to recognize both the strategic risks and the economic realities. China remains an important trading partner for almost everyone, a major supplier of industrial inputs and a significant source of global foreign direct investment.
At the same time, we have to continue reducing our strategic vulnerabilities. That is where Atmanirbhar Bharat becomes important. But self-reliance does not mean that we stop being pragmatic in our commercial engagement.
India recently relaxed some restrictions under Press Note-3 (governing investments from countries sharing land borders with India). How do you view the need to balance strategic concerns with attracting investment?
There is no point in banning Chinese companies from producing something in India when we are actually importing it from the same company outside in China or Vietnam. You might as well let them do it here. The objective should be to reduce strategic vulnerabilities while also encouraging domestic production where possible.
If a company is going to supply the Indian market anyway, there can be an argument for producing within India, subject to appropriate safeguards. So the approach has to be pragmatic. We need to build domestic capabilities and reduce dependence in strategically important areas, but that does not mean pretending that economic realities do not exist.