India’s Skilling Ecosystem

Despite training over 1.40 crore candidates under the Pradhan Mantri Kaushal Vikas Yojana between 2015 and 2025, India’s skilling ecosystem faces significant challenges in quality, industry trust, and workforce integration.

About Skill Development

• Refers: Skill Development refers to the systematic acquisition of employable competencies—technical, vocational, digital, and soft skills—that enhance an individual’s productivity, employability, and income potential.
• In India, it is a critical enabler for converting the demographic dividend into economic growth.

Need for Skill India in Achieving Viksit Bharat @2047

• Economic Imperative: 
  • Low Employability Levels: As per the India Skills Report (ISR) 2026, India’s overall employability has risen to 56.35% (from 54.8% in 2025), reflecting a rapid shift towards a “skills-first” economy shaped by AI and global labor mobility.
    • Also, for the first time in five years, women’s employability (54%) has surpassed men’s (51.5%), which is largely attributed to the rise of hybrid work models and targeted digital skilling in Tier-2 and Tier-3 cities. 
  • Productivity Challenge: The Economic Survey highlights that India’s labour productivity remains significantly below advanced economies, making skilling essential for sustained high GDP growth.
  • MSME-Led Job Creation: With over 110 million people employed in MSMEs (Ministry of MSME), Skill India is critical to transform youth from job seekers to job creators, strengthening the backbone of the economy.
• Industry 4.0 Readiness:
  • Emerging Skill Demand: Government policy documents identify AI, robotics, semiconductors, drones, EVs, and advanced manufacturing as future growth engines.
  • Make in India Constraint: The National Manufacturing Policy and PLI schemes require a workforce skilled in automation, IoT, and smart factory systems, making Skill India a critical enabler.
  • Digital Divide: Platforms such as the Skill India Digital Hub address digital literacy gaps, especially in rural and informal sectors.
• Social Imperative: 
  • Women’s Workforce Participation: The Economic Survey consistently notes that increasing female labour force participation is one of the fastest ways to raise GDP; targeted skilling is central to this objective.
  • Rural and Marginalised Outreach: Schemes like Jan Shikshan Sansthan focus on grassroots skilling, reducing distress migration and informal vulnerability.
  • Upward Mobility: Vocational training provides pathways into formal, higher-wage sectors, helping reduce inter-generational inequality.
• Global Opportunity: 
  • Global Labour Mobility: Alignment of qualifications through National Skills Qualifications Framework (NSQF) enhances international acceptance of Indian skills.
  • Remittances and Soft Power: Skilled migration strengthens foreign remittance inflows and enhances India’s economic diplomacy, as recognised in official migration and labour policy documents.

Key Initiatives and Actions taken by India

• Structural & Policy Initiatives:
  • Skill India Mission (2015): A national mission to train 400+ million youth in industry-relevant skills through formal and informal skilling channels.
  • National Education Policy (NEP) 2020: A landmark shift that integrates vocational education into schools and colleges. 
    • It aims for 50% of learners to have exposure to vocational education by 2025.
  • National Credit Framework (NCrF): This policy breaks down “educational silos” by allowing students to earn academic credits for technical skills, making vocational training a mainstream career choice.
  • National Skills Qualifications Framework (NSQF): Organizes qualifications into levels based on knowledge and skills, ensuring that Indian certifications meet international standards for global mobility.
• Large-Scale Training Programs:
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY): The flagship scheme providing short-term training and certification. 
    • PMKVY 4.0 now focuses on Industry 4.0 skills like AI, 3D printing, and drones.
  • PM-SETU (Oct 2025): The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs is a centrally sponsored scheme with an investment of ₹60,000 crore.
    • Hub-and-Spoke Model: It aims to transform 1,000 Government ITIs into Centres of Excellence (200 Hubs and 800 Spokes).
    • Industry Ownership: Clusters are managed by Special Purpose Vehicles (SPVs) anchored by industry partners, moving the system toward a “Government-owned, Industry-managed” model. 
  • National Centres of Excellence (NCE): Established via the Union Budget 2025-26, five NCEs are being set up with global partnerships to train youth in “frontier skills” like Green Hydrogen, Semiconductors, and Advanced Robotics.
  • National Federated Skill & Workforce Registry: Finalized in the Kaushal Manthan 2026, this registry acts as a unified digital database to improve the “searchability” of skilled workers for domestic and global employers.
  • PM Vishwakarma: Specifically targets traditional artisans and craftspeople (like carpenters and goldsmiths), providing them with modern tools, credit support, and digital marketing skills.
• Workplace & Apprenticeship Integration:
  • National Apprenticeship Promotion Scheme (NAPS): This scheme incentivizes industries to hire apprentices by sharing the cost of stipends. 
    • It bridges the gap between classroom theory and workplace reality.
  • Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) & Skill Strengthening for Industrial Value Enhancement (STRIVE): These are World Bank-supported projects aimed at improving the quality of training in ITIs and strengthening the “Skill India” infrastructure at the state and district levels.
• Digital & Technological Enablers:
  • Skill India Digital Hub (SIDH): A unified platform that acts as the “Aadhaar of Skilling.” 
    • It provides a Digital Skill Passport, links learners to job opportunities, and uses AI to suggest courses based on market demand.
  • Skill India International Centres: Established to prepare Indian youth for global jobs. 
    • These centers focus on language training and technical certifications required in countries like Japan, Germany, and the UAE.
• Social and Inclusive Skilling:
  • Jan Shikshan Sansthan (JSS): Focuses on providing vocational skills to non-literates and school dropouts in rural areas, particularly targeting women and marginalized groups to ensure equitable growth.
  • National Skill Development Corporation (NSDC): A public-private partnership that funds private training providers to scale up high-quality vocational institutes across the country.

Challenges that need to be Tackled

• The Aspiration and Economic Gap:
  • Low Aspirations: Vocational training is still seen as a secondary option for those who cannot succeed in formal academics.
  • The 4% Training Deficit: Only 4.1% of India’s workforce has formal vocational training, compared to 44%–70% in OECD countries. 
    • This creates a massive “skill poverty” in the labor market.
  • Modest Economic Gains: Data shows that wage increases from training are inconsistent. 
    • If a certified plumber earns the same as an uncertified one, there is no visible improvement in quality of life, killing the incentive to get skilled.
  • Educational Silos: Higher education does not integrate skilling. 
    • Most students only seek post-degree skilling as a desperate measure after failing to find a job, rather than as a core part of their studies.
• The Industry and Market Alignment Gap:
  • Low Recruitment Utility: Most employers ignore public skilling certifications. 
    • They prefer their own in-house training systems or private platforms because they don’t trust the quality of government-issued certificates.
  • Lack of Co-Design: Industry is often treated as a “customer” of manpower rather than a co-designer of the curriculum. 
    • Without direct industry stake, the skills taught often become outdated by the time students graduate.
  • Uneven Apprenticeship Adoption: While the National Apprenticeship Promotion Scheme (NAPS) is growing, it is mostly used by large companies. 
    • Small and Medium Enterprises (SMEs), which employ the most people, find the system too complex to join.
  • The Missing “Green” & “AI” Pipeline: Emerging sectors like Green Hydrogen, Semiconductors, and AI face a massive “talent vacuum.” 
    • Current ITIs and centers are not yet equipped to teach these high-end technical skills at scale.
  • CAG Audit Observations (2025): A 2025 Comptroller and Auditor General (CAG) report highlighted that despite high certification, only 41% of candidates under short-term training were placed. 
    • The report called for a more rigorous micro-level skill-gap analysis to ensure job roles align with actual market demand rather than just meeting enrollment targets.
• The Credibility and Accountability Gap:
  • Fragmented Responsibility: Unlike technical colleges, the skilling system separates training, assessment, and certification. 
    • This “diffusion of responsibility” means no single agency is held accountable if a student remains unemployed.
  • Weak Signaling Value: Employers find that Sector Skill Council (SSC) credentials hold less weight than traditional degrees. 
    • Assessments are often binary (pass/fail) rather than graded, offering no insight into a candidate’s actual level of expertise.
  • Failure of Mandate: SSCs have focused on quantity (enrollment numbers) rather than quality (job placement). 
    • Unlike private certifiers (like Google), government bodies don’t lose “brand value” if their students fail to get jobs.
  • Digital Divide and Infrastructure: While Skill India Digital is a great step, many rural training centers lack the high-speed internet and modern labs needed for Industry 4.0 training, creating a “Digital Skill Gap” between cities and villages.
• The Geographic and Social Gap:
  • Regional Imbalance: Training centers are concentrated in industrialized states like Maharashtra and Tamil Nadu. 
    • Rural areas and “Aspirational Districts” often lack the infrastructure to provide high-quality technical training.
  • Gendered Skilling: Many skilling programs are still male-dominated. 
    • Barriers like a lack of childcare at training centers or safe transport prevent women from joining high-paying technical trades, limiting the “Mahila Shakti” pillar of Viksit Bharat.

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Way Forward

• Workplace Integration as the Default Pathway:
  • Modernising ITIs (PM-SETU): Convert 1,000 ITIs into Centres of Excellence under a Government-owned, Industry-managed model, allowing industry to determine curricula aligned with market demand.
  • Hub-and-Spoke Model: Under PM-SETU, high-tech Hub ITIs should share advanced labs and industry experts with Spoke ITIs, extending quality workplace exposure to rural and semi-urban youth.
  • Repositioning Apprenticeships (NAPS): As envisaged under the Skill Resolutions 2026, apprenticeships should become the primary school-to-work pathway, with mandatory On-the-Job Training (OJT) for over 13 lakh apprentices annually to bridge the theory–practice divide.
  • MSME Participation: Stipend support can incentivise MSMEs to absorb apprentices, embedding learning within day-to-day business operations.
• Embedded Learning within Formal Education:
  • Credit Integration: Vocational skills must be embedded into higher education, enabling students to earn up to 25% of degree credits through NSQF-aligned vocational certifications.
  • NEP 2020 Alignment: To achieve the 50% Gross Enrolment Ratio (GER) by 2035, skilling cannot remain a post-graduation add-on, but must be concurrent with degrees.
  • Breaking the Silo Culture: Replace post-degree skilling with parallel skilling, ensuring graduates exit with both a formal degree and a verifiable Skill Passport.
  • Vocational Skill Labs: Introducing skill labs in Navodaya and Eklavya schools can mainstream vocational education and counter the perception of it being a secondary pathway.
• Accountability for Outcomes, Not Enrolments:
  • Economic Pillar, Not Welfare: Skilling programmes must be evaluated on employability and placement outcomes, not merely training numbers. 
    • Non-performing centres should lose public funding.
  • Ownership of the Value Chain: Sector Skill Councils (SSCs) must move beyond standard-setting to outcome ownership, with their credibility tied to market wages and placement rates of certified candidates.
  • Outcome-Linked Funding: A Pay-for-Success model should withhold part of government payments until candidates complete six months of verified employment, strengthening accountability across the skilling ecosystem.
  • Graded Signalling: Replace Pass/Fail certification with graded proficiency, where higher grades translate into higher entry-level wages, creating market incentives for quality skilling.
• Convergence and Digital Transparency:
  • Unified Skilling Architecture: Skill India must move towards system-wide convergence, reducing fragmentation and improving traceability of outcomes.
  • One Nation, One Student ID: Through the Skill India Digital Hub, track an individual’s skill journey from school to retirement, creating a trusted, verifiable skills ledger accessible to employers nationwide.

Conclusion

To achieve Viksit Bharat @ 2047, India must transform skilling from a welfare service into an accountable economic pillar. By integrating industry-led training and academic credits, India will bridge the gap between Jan Shakti (People Power) and Rashtra Shakti (National Power), turning its demographic dividend into a global powerhouse.

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