Abstract
India is facing a problem with young people not having jobs. The country has one of the growing economies in the world but a lot of graduates do not have jobs with around 40 per cent of them being unemployed. This is an issue.
I. Introduction
India has a lot of people with over 65 per cent of the population being under 35 years old. This is what economists call a dividend, which means that the country has the potential to grow economically because of its young and productive workforce.1 This could turn into a disaster if the young people do not have jobs.
The number of people without jobs is very high with 9.9 per cent of people between 15 and 29 years old being unemployed according to the Periodic Labour Force Survey Annual Report 2025.2 In cities the situation is even worse with 13.6 per cent of people being unemployed. For graduates the situation is particularly bad with some reports saying that up to 40 per cent of them are unemployed.3
Key Youth Unemployment Figures
| Category | Unemployment Rate |
|---|---|
| People Between 15 and 29 Years | 9.9% |
| Urban Youth | 13.6% |
| Graduates | Up to 40% |
Most of the research on this issue has focused on picture problems, such as not enough jobs being created too many informal jobs and the fact that what people learn in school does not match what they need to know to get a job. One thing that has not been talked about much is the role of technology, specifically Artificial Intelligence in deciding who gets a job.
Artificial Intelligence in Hiring
Now many big companies in India use Artificial Intelligence to help them hire people. They use tools like automated resume screeners, ranking systems and interviews done by chatbots. These tools decide whether a persons job application will even be seen by a human.
- Automated resume screeners
- Ranking systems
- Chatbot-based interviews
- AI-powered hiring assessments
Structure of the Article
This article will be divided into four parts.
| Part | Focus Area |
|---|---|
| Part II | How Artificial Intelligence is being used in hiring in India |
| Part III | The gaps in the law that leave job applicants without any options |
| Part IV | The European Unions Artificial Intelligence Act and lessons for India |
| Part V | A proposed law suited to Indias specific situation |
Need for Regulation and Transparency
Indias youth unemployment crisis is a problem that needs to be solved and Artificial Intelligence is one of the things that is making it worse. India needs to do something to make sure that Artificial Intelligence is used in a way that’s fair and transparent.
The use of Artificial Intelligence in hiring is an issue that needs to be addressed and India needs to find a way to make sure that it is not hurting young peoples chances of getting a job.
II. Artificial Intelligence in Indian Recruitment: The Invisible Gatekeeper
The use of Artificial Intelligence hiring tools in India has increased a lot over the ten years. Reports from the industry show that big IT companies, banks and e-commerce companies now use automated systems to sort through the number of job applications they get every year.4 These systems look at resumes analyse video interviews and use scoring models that were created using data from hiring decisions to rank and filter candidates.
Growing Use of AI Hiring Tools in India
The increasing use of Artificial Intelligence hiring systems has changed the recruitment process in India. Many organisations now depend on automated tools to reduce hiring time and manage large volumes of applications.
- Resume screening and filtering
- Video interview analysis
- Automated candidate ranking systems
- Data-driven hiring decisions
| Sector | Use of Artificial Intelligence in Recruitment |
|---|---|
| IT Companies | Automated resume screening and candidate ranking |
| Banks | AI-based candidate evaluation systems |
| E-commerce Companies | Large-scale applicant filtering and interview analysis |
Bias in Training Data and Hiring Patterns
The main problem with these systems is something called bias in the data used to train them. When a computer program is trained using data from companies that have mostly hired people from schools like the Indian Institutes of Technology or the Indian Institutes of Management it starts to prefer those people too.5 The program does not mean to be unfair. It is unfair in a subtle way because it is repeating the same patterns that have been used for decades. This means that the Artificial Intelligence system is making millions of hiring decisions that are biased.
Artificial Intelligence systems often rely on historical recruitment data. As a result, the same hiring preferences and social advantages can continue through automated decision-making systems.
Social Inequality and AI Recruitment in India
In India this bias is connected to the classes that have been around for a long time. A persons name can give away their caste the college they went to can show where they are from and how money their family has and gaps in their work history can affect women more because they often take care of their families.
The Artificial Intelligence system does not see the person it just sees a pattern. It likes patterns that are similar to the people who have been hired in the past, who are often from privileged backgrounds. This means that Artificial Intelligence hiring is not just reflecting the inequalities that already exist it is also making them worse and it is doing this faster and on a larger scale than any human recruiter could.
Impact of AI Hiring on Underprivileged Candidates
The use of Artificial Intelligence in hiring is a problem because it is making the existing inequalities in Indian society even worse. Artificial Intelligence hiring tools are being used by companies in India and they are affecting the lives of many people.
- Candidates from privileged educational backgrounds are often preferred
- Women may be affected due to career gaps linked to family responsibilities
- Applicants from socially disadvantaged groups may face hidden discrimination
- Automated systems can reinforce long-standing inequalities
The Indian Institutes of Technology and the Indian Institutes of Management are a few examples of the top schools that are preferred by these systems. The Artificial Intelligence system is not fair to people who do not have the background or education.
III. The Legal Vacuum: Constitutional And Statutory Gaps
3.1 Constitutional Dimensions
The Constitution of India has some things to say about equality.
Articles 14 and 16 of the Constitution of India say that everyone should be treated under the law and have an equal chance to get a job.
Article 15 says that no one can discriminate against someone because of their religion, race, caste, sex or where they were born.
Article 17 says that no one can treat someone badly because of who they are.
All these articles together show that the Constitution of India is committed to making sure everyone is treated fairly.
Key Constitutional Protections
| Constitutional Article | Main Protection |
|---|---|
| Article 14 | Equality before law |
| Article 16 | Equal opportunity in employment |
| Article 15 | Prohibition of discrimination |
| Article 17 | Protection against discriminatory treatment |
These rules are mostly for the government and companies that work for the government.
Private companies, which are where most people work do not have to follow these rules unless they are doing something that affects the public.6
The Supreme Court has a view of what affects the public so most private companies do not have to follow these rules.
This means that if a private company uses a computer program to hire people and the program is biased the company is not breaking any rules.
3.2 Statutory Gaps
The laws about employment in India are old. Do not cover new technology.
There are laws like the Industrial Employment Act of 1946 the Contract Labour Act of 1970 and the Labour Codes of 2019-2020 that talk about working conditions but do not say anything about how companies choose who to hire.
The Equal Remuneration Act of 1976 says that men and women should get paid the same. It does not say anything about biased hiring.
There are also laws like the Information Technology Act of 2000 and the Information Technology Rules of 2011 that talk about protecting peoples information but they do not say anything about computer programs that make decisions.
The Digital Personal Data Protection Act of 2023 is a law that gives people some rights over their personal information but it does not say anything about explaining why a computer program made a certain decision.7
It also does not regulate how personal information is used in computer programs that hire people.
Major Gaps In Indian Laws
- No law specifically regulates AI-based hiring systems.
- No mandatory bias testing for hiring algorithms.
- No requirement to inform applicants about automated hiring.
- No legal right to receive explanations for automated decisions.
- No clear appeal mechanism against computer-generated rejection.
- Existing labour laws mainly focus on working conditions.
- Data protection laws do not address algorithmic discrimination.
Comparison With Global Frameworks
This is a problem because other countries, like the European Union have laws that protect people from biased computer programs.
For example the European Unions General Data Protection Regulation says that people have the right to know why a computer program made a decision especially if it affects their job.8
| Legal Framework | Position On Automated Decision-Making |
|---|---|
| India | No clear regulation on AI hiring bias |
| European Union GDPR | Provides explanation rights for automated decisions |
There are some laws in India like the Scheduled Castes and Scheduled Tribes Act of 1989 and the Rights of Persons with Disabilities Act of 2016 that protect groups of people but they do not say anything about biased computer programs.
Absence Of AI Hiring Regulation
In short there is no law in India that says companies have to check their computer programs for bias tell people that they are using these programs or give people a way to appeal if they are rejected by a computer program.
IV. A Comparative Lens: The European Unions AI Act
The European Unions Artificial Intelligence Act, which came into effect in August 2024 is the worlds complete set of laws for managing Artificial Intelligence systems.9 This law sorts Artificial Intelligence applications into categories that are not acceptable high risk, limited risk and minimal risk.
Risk Classification Under the AI Act
| Category | Description |
|---|---|
| Not Acceptable Risk | Artificial Intelligence systems that are prohibited under the law. |
| High Risk | Systems that significantly affect peoples rights and opportunities. |
| Limited Risk | Systems that require certain transparency obligations. |
| Minimal Risk | Systems with little or no regulatory obligations. |
Artificial Intelligence systems used for employment, managing workers and getting self-employment including tools for hiring, selecting, promoting and evaluating performance are clearly considered risk.10
Requirements For High Risk AI Systems
Under the European Unions Artificial Intelligence Act high risk Artificial Intelligence systems have to meet some requirements before they can be used.
These include:
- Checking if they meet standards
- Keeping technical records
- Registering in a public European Union database
- Having humans oversee them
- Being transparent with people who are affected
Employers who use these systems have to tell candidates that an automated system is being used and they have to make sure that humans review decisions carefully.
The people in charge of watching the market can check these systems and fine companies up to thirty-five million euros or seven percent of their turnover per year if they break the rules seriously.
Lessons For India From The European Union
India does not have to copy the European Unions model.
The European Unions framework was made for countries with economies and strict rules. Indias ability to regulate its informal sector and the huge number of job applications need a framework that is tailored to Indias situation.
However the European Unions Artificial Intelligence Act shows that it is possible to regulate Artificial Intelligence hiring and that it can be done in a way that works for the economy.
It also shows that not having these regulations is a choice that governments make not something that is unavoidable because of the technology.
The European Unions Artificial Intelligence Act is an example of how Artificial Intelligence systems can be managed.
The Artificial Intelligence Act is a law that can help guide Indias approach to Artificial Intelligence systems.
V. Towards a Legislative Framework
This article talks about a three part plan to make laws that can work within the system of India.
5.1 Mandatory Checks On Algorithm Use
Any company with more than 500 employees or getting more than 10,000 job applications every year that uses Artificial Intelligence to hire people should have to get their system checked regularly by an outside expert.
This check should see if the system is rejecting people unfairly based on:
- Gender
- Caste
- Where they are from
- What kind of school they went to
The results of these checks should be sent to the Ministry of Labour and Employment and made public.
| Requirement | Details |
|---|---|
| Companies Covered | Companies with more than 500 employees or over 10,000 job applications every year |
| Purpose of Audit | To identify unfair rejection patterns in Artificial Intelligence hiring systems |
| Grounds of Possible Discrimination | Gender, caste, region, and educational background |
| Reporting Authority | Ministry of Labour and Employment |
| Transparency Requirement | Audit results should be made public |
5.2 Right To Know Why You Were Rejected
People who get rejected by an automated system should get an explanation of why they were rejected.
This explanation should not be a message but a real reason why their application was not selected.
The law should be changed to include the right to challenge decisions made by computers in hiring like the law in Europe.
A special court should be set up to hear complaints about treatment by algorithms.
| Proposed Right | Explanation |
|---|---|
| Right to Explanation | Applicants should receive genuine reasons for rejection |
| Right to Challenge | People should be allowed to challenge automated hiring decisions |
| Special Tribunal | A dedicated court should hear complaints regarding algorithmic discrimination |
5.3 Making Private Companies Follow Non-Discrimination Rules
The government should think about making a law that private companies cannot discriminate when hiring people.
This law should cover decisions made by both humans and computers.
This would fill a gap in the law and make sure that companies in India follow the same rules as the country’s constitution.
- The law should apply to private companies.
- The law should regulate both human and Artificial Intelligence hiring decisions.
- The law should strengthen constitutional equality protections.
VI. Conclusion
The problem of people not having jobs in India is not just because there are not enough jobs or the education system is not good.
It is also because the law allows technologies that make decisions about peoples futures without being transparent or accountable.
Every day that Artificial Intelligence hiring systems are used without rules the promise of opportunities is broken.
This is not because of a person being biased. Because of a computer program that has biases that are not visible.
The law is always behind technology.
This is okay when it does not matter much.
It is not okay when it affects a whole generation of young Indians who cannot get jobs because of systems they do not understand.
The ideas proposed in this article are not new or extreme.
They are the minimum required to keep the promise of equality in the constitution.
| Key Issue | Impact |
|---|---|
| Lack of Transparency | People do not understand how hiring decisions are made |
| Absence of Accountability | No clear responsibility for unfair automated decisions |
| Hidden Algorithmic Bias | Discrimination becomes difficult to detect |
| Delay in Legal Reform | Technology grows faster than legal protections |
| Need for Constitutional Equality | Minimum safeguards are necessary to protect equal opportunity |
End Notes
- Ministry of Health and Family Welfare, Government of India, Report of the Technical Group on Population Projections (2020).
- Ministry of Statistics and Programme Implementation, Periodic Labour Force Survey (PLFS) Annual Report 2024-25 (March 2026).
- Centre for Sustainable Employment, Azim Premji University, State of Working India 2023.
- NASSCOM, Future of Work Report: AI in Indian HR Practices (2024).
- Joy Buolamwini and Timnit Gebru, ‘Gender Shades: Intersectional Accuracy Disparities in Commercial Gender Classification’ (2018) 81 Proceedings of Machine Learning Research 1.
- P.D. Shamdasani v Central Bank of India AIR 1952 SC 59; Zee Telefilms Ltd v Union of India (2005) 4 SCC 649.
- Digital Personal Data Protection Act 2023, ss 11-13.
- Regulation (EU) 2016/679 of the European Parliament and of the Council (General Data Protection Regulation), art 22.
- Regulation (EU) 2024/1689 of the European Parliament and of the Council on Artificial Intelligence (AI Act), OJ L 2024/1689.
- EU AI Act, Annex III, para 4.
