I agree with Krishnadas that it is underemployment that is more of a problem than unemployment. We are churning out graduates, post graduates and professionals without really being concerned about the job opportunities available.
Educational institutions are being allowed without any thought about the future of those who manage to add a degree to their qualification. It is, I would say, something akin to procreating children without taking into account the available means to survive.
Though it was, till the recent past, very common to see educated guys roaming around without a job because they could not find one that commensurates with their qualification, there seems to be some hope because nowadays we find youngsters taking up jobs that come their way irrespective of whether it fits into their choice or desire. We have so many postgraduates appearing for clerical tests, so many engineering graduates taking up jobs in banks and so on. Self-entrepreneurship through startups and even agriculture has started finding many takers now. It is a sad state of affairs but there appears to be no other way out.
Adding to the woe of the underemployed/ unemployed is the availability of fresh faces for a relatively lower salary for the private sector. Private companies prefer new faces and are not really bothered about their experience because the newcomers are enthusiastic to prove their mettle, they crib less, are ready to take up any assignment and are ready to work for a minimum salary when compared to the experienced hands. The job vacancies in the government sector are very less as compared to the number of job aspirants that are multiplying almost every year and the competition is very tough.
It is a fact that technology and machines have eaten into a lot of the opportunities that were available to humans but that is a worldwide phenomenon and we can't help it. I don't think it would be easy for any government to find a solution to this problem unless we take the risk and throw up a challenge to the young generation to fight it out themselves with the available resources. Steps to reduce the number of educational institutions for higher/ professional studies and thus reducing the number of qualified people might bring a respite to the competition in the job market. Controlling the population explosion and finding out newer ways and methods to open up maximum opportunities, in addition to the reduction strategy suggested earlier, appears to a viable option with the government. Lowering the standard of life by not being bothered about world rankings would also be a positive step in this direction. Another important and much-debated point that can help in reducing unemployment is, I feel, reducing the age limit for a person to retire from service.
'It is the mark of an educated mind to be able to entertain a thought without accepting it'. -Aristotle