India’s Skilling Gap

Context

1. Over the last decade, India has built one of the world’s largest skilling ecosystems through flagship programmes like Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
2. However, despite large numbers trained, skilling has not emerged as a preferred pathway for youth, and employability outcomes remain weak.
3. This has renewed debate on why India’s skilling system is not delivering meaningful labour-market results.

Why Has India’s Large Skilling Ecosystem Failed to Deliver Strong Employability Outcomes?

1. Scale without outcomes
   1. Between 2015 and 2025, PMKVY trained and certified around 1.40 crore candidates.
   2. Yet, skilling is not aspirational and is rarely seen as an alternative to formal degrees.
   3. Periodic Labour Force Survey data show that wage gains from vocational training are modest and inconsistent, especially in the informal sector, where most workers are employed.
2. Low formal vocational training
   4. Only about 4.1% of India’s workforce has received formal vocational training, up from about 2% a decade ago (PLFS; World Bank).
   5. In contrast, OECD countries have around 44% enrolment in vocational streams at the upper-secondary level, rising to 70% in countries like Austria and Finland.
   6. This shows that India’s skilling ecosystem remains peripheral, not mainstream.

Why Has Skilling Not Become Aspirational?

1. India’s Gross Enrolment Ratio (GER) in higher education is 28%, and National Education Policy 2020 aims to raise it to 50% by 2035.
2. This expansion cannot rely only on academic degrees; skills must be integrated into higher education pathways.
3. The India Skills Report 2025 shows that post-degree skilling is not common behaviour among graduates.
4. As long as skilling remains separate from degrees, youth will continue to see it as a second-choice or fallback option.

Why is Industry Participation Limited?

1. Industry is the largest beneficiary of skilled labour, yet participation remains weak.
2. High attrition (employees leaving their jobs from an organisation over a period of time) rates (30-40% in sectors like retail, logistics, hospitality, manufacturing) impose major costs.
3. Despite this, most employers do not treat public skilling certificates as hiring benchmarks.
4. Instead, they rely on internal training, referrals, or private platforms (as noted by NITI Aayog and the World Bank).
5. Apprenticeships
   1. The National Apprenticeship Promotion Scheme has increased participation, but the benefits are uneven and large companies participate only to a limited extent.
   2. Industry is not properly encouraged or required to help design training content, assessments, or certification standards.
   3. As a result, skilling is something industry uses after training is done, rather than actively shaping it from the beginning.

Why Do Sector Skill Councils (SSCs) Lack Credibility?

1. SSCs were created to be industry-facing institutions that define standards, ensure relevance, and anchor employability.
2. In practice, the skilling value chain is fragmented:
   1. Training by one agency
   2. Assessment by another
   3. Certification by SSCs
   4. Placement often missing
3. Unlike universities or polytechnics, no reputational risk or accountability exists for poor outcomes.
4. Employer surveys show that SSC certificates have weak signalling value, compared to degrees or prior experience.
5. In contrast, industry-led certifications (e.g., cloud or digital certifications) work because:
   1. The certifier’s credibility is at stake
   2. Assessments are graded, not binary
   3. Employers know exactly what skills are certified
6. SSCs focus mainly on standards creation, not employment outcomes, which erodes trust.

How Can Skilling Support Sustained Economic Growth?

1. India’s skilling problem is not due to lack of funding or intent, but due to weak accountability.
2. Solutions include:
   1. Expanding apprenticeships and embedding skills in workplaces
   2. Stronger industry ownership in programme design
   3. Reforms such as PM-SETU, which modernises ITIs with industry involvement
3. When skills are embedded in degrees, industry becomes a co-owner and SSCs are accountable for placements, then skilling can shift from a welfare intervention to a core growth strategy.

Implications

1. Weak skilling outcomes limit India’s ability to convert its demographic dividend into productivity gains.
2. Informal employment continues to dominate without quality improvements.
3. Industry faces persistent skill shortages despite large public spending.
4. The credibility gap undermines public trust in skilling programmes.

Challenges and Way Forward

Conclusion

India’s skilling challenge is not one of scale, but of outcomes. By integrating skills with education, treating industry as a co-owner, and holding institutions accountable for employability, skilling can become a pillar of productivity, dignity of labour, and sustained economic growth.