The Lift Line
“Administratively, cash transfers are easier to execute than creating jobs.”
Why This Editorial Matters for Your Exam
Sunaina Kumar, director and senior fellow at the Centre for New Economic Diplomacy, Observer Research Foundation, maps a new trend: State cash allowances for jobless graduates. It supplies scheme names, data and international comparisons for employment and welfare answers. (Yesterday’s IE column on the Graduation Approach looked at cash transfers for the ultra-poor; see the 29 September editorial.)
GS Paper 3: Indian economy and issues relating to employment; inclusive growth. GS Paper 2: Welfare schemes; issues relating to human resources and education.
Background and Context
Selected State programmes, as the column describes them.
| State | Programme | Design |
|---|---|---|
| Karnataka | Yuva Nidhi | Graduates under 35: Rs 3,000 a month for up to two years, with access to skills training |
| Rajasthan | Yuva Sambal | Cash plus skill training and a mandatory internship in a government department |
| Kerala | Connect to Work | Rs 1,000 a month for one year, tied to skill training or preparation for competitive exams |
| Others | Haryana, Uttar Pradesh, Bihar, West Bengal, Chhattisgarh | Broader eligibility from secondary or higher-secondary level; more for graduates |
| Tamil Nadu | Long-running allowance | Upgrade for unemployed graduates announced by the new TVK government |
The data the author cites.
| Indicator | Value |
|---|---|
| Male graduates finding a permanent salaried job within a year | Less than 7 per cent (State of Working India 2026) |
| Graduates in roles aligned with their qualifications | 8.25 per cent (Economic Survey) |
| Graduate unemployment rate | 29.1 per cent, nine times that of those who cannot read or write (ILO, 2024) |
| China, youth unemployment (16-24, excluding students) | 17.9 per cent, July 2026 |
| UK and EU, youth unemployment | 16.2 and 15.1 per cent |
Central schemes the author mentions. Pradhan Mantri Viksit Bharat Rozgar Yojana: up to Rs 15,000 to first-time employees and up to Rs 3,000 a month per new employee to employers. PM-SETU: upgrading industrial training institutes.
The Analysis
1. Youth as a constituency. Like women and farmers, educated youth now get direct transfers; nearly all programmes were launched around State elections.
2. Closer to labour market policy when conditional. Linking cash to training, internships or exam preparation moves these schemes towards active labour market policies, though evidence of their effect is thin; Karnataka’s skilling uptake has been slow.
3. A “wicked problem”. Graduate unemployment comes from queuing (waiting for jobs that match qualifications and aspirations) and from an economy that creates too few formal jobs.
4. Not the global norm. China subsidises employers who hire graduates and expands vocational training; India too has employer-linked incentives. Unconditional transfers to unemployed youth are unusual internationally.
5. Fiscal and incentive risks. Jharkhand spends about half its social welfare budget on unconditional transfers; the Economic Survey questions long-run effects on incentives to upskill. Could allowances lengthen unemployment spells?
6. Purpose decides legitimacy. As a temporary income bridge or a way to invest in skills, the allowances are valid; as a substitute for job creation, they are not.
Data and Institutions Vault
Prelims-grade facts:
Schemes:
- Yuva Nidhi (Karnataka): Rs 3,000 a month for graduates, up to 2 years, age under 35.
- PM Viksit Bharat Rozgar Yojana: employment-linked incentive; up to Rs 15,000 to first-time employees.
- PM-SETU: upgrading government ITIs in a hub-and-spoke model.
Data:
- ILO India Employment Report 2024 (with the Institute for Human Development): graduate unemployment 29.1%.
- Official labour data: Periodic Labour Force Survey (PLFS), NSO, monthly estimates since 2025.
- State of Working India is published by Azim Premji University.
⚠️ Watch the trap: The unemployment rate is the share of the labour force (those working or seeking work) that is unemployed, not the share of the whole population; the LFPR is the share of the population in the labour force.
The Debate
For the author’s view. Cash is easier than jobs, and politically rewarding; without conditions and evaluation, allowances risk becoming a substitute for the harder task of job creation.
The complications. Income support during job search is standard social protection in many countries (unemployment benefits). It prevents distress and lets poor, first-generation graduates search longer for better matches instead of taking the first informal job.
The balanced verdict. Keep allowances short, conditional and evaluated; tie them to apprenticeships and training; and put the real effort into labour-intensive manufacturing, services and education quality.
How to Think About This
Name the purpose before judging the tool. A transfer can be relief, an investment in skills, or a bridge to work. Each purpose implies a different design (amount, duration, conditions). In answers, define the purpose first, then evaluate the design against it.
Diagram-in-Words
Takeaway Box
- Trend: at least 10 States pay allowances to unemployed youth.
- Examples: Yuva Nidhi (Karnataka), Yuva Sambal (Rajasthan), Connect to Work (Kerala).
- Data: graduate unemployment 29.1% (ILO 2024); under 7% of male graduates get permanent jobs within a year.
- Risk: fiscal strain; weaker incentives if unconditional.
- Verdict: a bridge, not a substitute for jobs.
Sources: The Indian Express, ILO, India Employment Report 2024, Ministry of Labour and Employment
Source: Cash Transfers Alone Cannot Tackle Educated Unemployment: The Rise of State Youth Allowances — Ujiyari.com | Free UPSC & State PCS Editorial Analysis
