Archive · 17 Aug 2025
Economist: High Salaries Fueling Unemployment in India
An economist, Karthik Muralidharan, explains that the Indian government's salary structure is a mess.
Most government jobs pay way too much, while important leaders are underpaid.
This means the government can't hire enough people, and lots of folks waste time studying for exams instead of getting real skills.
He suggests training programs that combine learning and doing, so people get experience before they get hired.
Economist Karthik Muralidharan says public sector wages are distorted.
95% of government jobs pay far above market rates, underpaying top decision-makers.
This leads to inability to hire, unmanageable recruitment, and misaligned interests.
High salaries fuel unemployment as educated youth focus on government exams.
Muralidharan suggests practicum-based training for frontline roles.
- Who
- Karthik Muralidharan, a development economist.
- What
- Wage distortions and related problems in India's public sector.
- When
- The economist shared his insights during a recent podcast conversation.
- Where
- India.
- Why
- Wage imbalance creates hiring difficulties, unemployment traps and other issues.
Current System
Proposed System
Wages
Current System
High salaries for many jobs
Proposed System
Market-aligned wages.
Job Requirements
Current System
Focus on passing exams.
Proposed System
Emphasis on skills and experience.
- Wage Distortion
- 95% of government jobs pay five times market rate
- Applicants for Peon Jobs
- 2.3 million
- Proposed Solution
- Practicum-based training
- Unemployment Cause
- 80% of educated youth are preparing for government exams
