After Reading This Article You Can Solve This UPSC Mains PYQ:
Skill development programs have succeed in increasing human resources supply to various sectors. In the context of the statement analyze the linkages between education, skill and employment. (GS-2 Social Justice)
Context:
India has successfully created one of the world’s largest skilling ecosystems. Between 2015 and 2025, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) alone certified nearly 1.40 crore candidates. However, this “degree/certificate” accumulation has not translated into widespread “aspirational employment.”
Core Issues in India’s Skilling Outcomes:
1. The “Aspiration Gap” (Social & Structural)
Skilling in India is often perceived as a secondary choice.
- The Last Resort: Unlike in Germany or Korea, vocational training in India is largely viewed as a path for those who cannot progress in formal academic streams.
- Low Integration with Higher Ed: Despite the NEP 2020, skilling remains a “standalone track.” The current Gross Enrolment Ratio (GER) of 28% shows a heavy bias toward degrees that often lack market-ready skills.
- Digital Divide: High-growth sectors like Fintech and Green Energy require digital literacy, yet only ~24% of schools have smart classrooms to impart these new-age skills.
2. The “Signaling Failure” (Credibility)
- Lack of Trust in Public Certification: Most employers (especially in the private sector) do not use government skilling certificates as a hiring benchmark. Instead, they rely on internal training or private platforms.
- Supply-Push vs. Demand-Pull: The system currently focuses on “training for the sake of targets” (Supply-push) rather than training based on specific industry requirements (Demand-pull).
- Outdated Curricula: Sector Skill Councils (SSCs) are often criticized for lack of real-time data integration, leading to curricula that do not reflect “Industry 4.0” realities like AI and Robotics. According to the India Skills Report 2026, while the “hiring intent” of organizations has risen to nearly 60%, the actual employability of graduates is stuck at 54.8%.
3. The “Stagnant Return” (Economic)
- Modest Wage Gains: Periodic Labour Force Survey (PLFS) data shows that vocational training leads to inconsistent and often negligible wage increases, particularly in the informal sector.
- The Informal Trap: Since over 90% of the workforce is in the informal sector, certified skills are rarely recognized or rewarded with better pay or job security.
- Underemployment: Approximately 42.6% of graduates are considered “unemployable,” leading to a paradox where we have “jobless engineers” and “skill-less jobs” simultaneously.
4. Weak Industry Co-ownership
- Low Apprenticeship Culture: India has a weak dual-learning model. While the National Apprenticeship Promotion Scheme (NAPS) exists, only a tiny fraction of companies actively participate compared to global peers.
- High Attrition Costs: Industries like retail and hospitality face 30-40% attrition. Without industry-led career pathways, workers treat skilling jobs as temporary stop-gaps.
Significance of Reforming Skilling:
1. Averting a “Demographic Disaster”
India is at the peak of its demographic dividend, with 65% of the population under 35.
- The Risk: Without effective skilling, this youth bulge will lead to massive unemployment, social unrest, and economic stagnation.
- The Opportunity: A skilled workforce acts as an engine for the $5-Trillion Economy goal. Reforming outcomes ensures this window of opportunity is not lost to a “jobless growth” trap.
2. Boosting GDP and Labor Productivity
- GDP Growth: Recent reports indicate that a 1% increase in the Gross Enrolment Ratio (GER) at the higher/vocational education level leads to a 0.51% rise in long-term GDP.
- Global Prosperity: The World Bank estimates that bridging global skill gaps could boost prosperity by $6.5 trillion over the next seven years. For India, reducing the “underutilization” of graduates (where over 50% work in low-skill roles) is critical to unlocking this value.
3. Facilitating “Structural Transformation”
- Moving away from Agriculture: Currently, 46.1% of the workforce is still dependent on agriculture, which contributes only ~18% to GDP. Reforming skilling allows for a “labor shift” into Manufacturing and Services.
- Supporting “Make in India”: Advanced manufacturing (semiconductors, EVs, electronics) cannot succeed without a specialized technical workforce. Skilling reforms are the “software” that makes the “hardware” of industrial policy work.
4. Enabling “Digital and Green” Transitions
The 2026 economy is defined by two major shifts: Artificial Intelligence (AI) and Sustainability.
- AI Readiness: With AI-role hiring surging by 61% (Naukri JobSpeak 2026), reforming outcomes ensures workers aren’t displaced by automation but are instead empowered to use it.
- Green Jobs: Reforming the curriculum to include renewable energy and circular economy skills can create 8 million new green jobs by 2030, aligning India’s labor force with global climate goals.
5. Social Mobility and Equity
Skilling serves as a powerful tool for social engineering.
- Gender Inclusivity: Reforming skilling to target women (who currently have a lower LFPR of 41.7%) can unlock a massive, untapped productive force.
- Dignity of Labor: By formalizing vocational trades and linking them to a “Wage Premium,” reforms can elevate the social status of blue-collar and gray-collar professions, ensuring “Dignity of Labor” as envisioned in the Constitution.
Challenges in the Ecosystem:
1. Institutional & Structural Challenges
- Fragmented Accountability: The responsibility for training, assessment, and placement is split between multiple bodies (NSDC, NCVET, and individual Ministries). This leads to “siloed” functioning where no single entity is accountable if a certified candidate remains unemployed.
- The Sector Skill Council (SSC) Failure: SSCs were meant to be the “bridge” to industry. However, they have largely become “certification factories.” As of 2026, most SSCs lack the real-time data or industry authority to ensure their curricula match the rapidly evolving demands of Industry 4.0.
- Underutilization of Apprenticeships: Despite the National Apprenticeship Promotion Scheme (NAPS), the culture of “Learning while Earning” remains weak. While countries like Germany have millions of apprentices, India’s engagement is limited by bureaucratic hurdles and employer hesitation to invest in “temporary” talent.
2. Industry-Related Challenges
- The “Consumer vs. Co-Designer” Mindset: Industry is the primary beneficiary of skilling but often refuses to be a “co-investor.” Many firms prefer to hire “off the shelf” rather than partnering with ITIs or vocational centers to design training modules.
- Lack of Incentive for Small Firms: Over 95% of India’s MSMEs lack the financial cushion to provide formal training. Consequently, workers in these units learn informally, often picking up outdated or inefficient techniques that limit their long-term growth.
3. Behavioral & Societal Challenges
- The “Degree Over Skill” Bias: There is a deep-seated societal perception that a University Degree (even an unemployable one) is superior to a Vocational Certificate. This “Aspiration Gap” leads to millions of youth chasing low-value degrees while technical roles in high-growth sectors (like EV maintenance or Solar PV installation) remain vacant.
- High Attrition Rates: In sectors like Retail and Logistics, attrition ranges between 30% and 40%. This discourages employers from investing in high-quality skilling, as they fear the trained worker will leave for a marginally higher salary elsewhere.
4. Technological & Economic Challenges
- The Digital & 5G Divide: As skilling moves toward AI and Machine Learning, rural youth are being left behind due to a lack of high-speed connectivity and hardware.
- Informal Sector “Invisibility”: Since 90% of the workforce is informal, there is no system to “verify” or “reward” the skills of millions of self-taught artisans, plumbers, and mechanics, keeping them in a low-wage trap.
Government Initiatives: The New Skilling Architecture:
1. PM-SETU (Skilling & Employability Transformation through Upgraded ITIs)
- Hub-and-Spoke Model: Upgrading 1,000 Government ITIs, where 200 “Hubs” with state-of-the-art labs support 800 “Spoke” institutions.
- Industry-Led Governance: Transitioning from government management to Special Purpose Vehicles (SPVs) where industry leaders hold 51% ownership.
- Global Centers of Excellence: Strengthening five National Skill Training Institutes (NSTIs) in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana to benchmark against global standards (e.g., collaboration with Singapore for Advanced Manufacturing).
2. Adult Skill Assessment Survey (2026)
In a historic first, the Ministry of Statistics (MoSPI) is conducting a nationwide survey to bridge the data gap.
- Competency Mapping: Unlike the PLFS, which only tracks if someone was trained, this survey measures actual skill levels (Basic, Intermediate, Advanced) in literacy, numeracy, and technical proficiency.
- Feedback Loop: The data will be used to recalibrate PMKVY 4.0 and other schemes based on where the “employability gap” is widest (currently estimated at 54.8% for graduates).
3. IndiaAI Mission: ‘YUVA AI for ALL’
Recognizing the AI revolution, the government has launched a foundational AI literacy course aimed at 10 million citizens.
- Mass Literacy: Free access to AI fundamentals to ensure that India’s workforce—from students to professionals—remains relevant in an automated economy.
- Collaboration: A Public-Private partnership involving the Ministry of Electronics (MeitY) and global digital platforms to provide standardized certification.
4. PM-NAPS (National Apprenticeship Promotion Scheme)
- On-the-Job Training (OJT): Mandatory integration of OJT in short-term courses to provide real-world exposure.
- DBT Support: Providing a stipend of ₹1,500/month directly to apprentices to incentivize participation, particularly in MSMEs and aspirational districts.
5. International Mobility & Global Benchmarking
- Mobility Partnerships: Signed MoUs with countries like Japan, UK, and Oman to harmonize skill standards, enabling Indian youth to access global labor markets.
- Skill India Digital Hub (SIDH): A unified digital platform providing “Stackable Credentials” and linking job seekers directly to employers based on verified skills.
Way Forward:
1. Shift to Outcome-Based Funding
- Performance-Linked Incentives: Funding for training providers should be strictly linked to 6-month job retention and wage increments, rather than mere certification.
- Skill Impact Bonds (SIBs): Scale up innovative financing like SIBs, where private investors fund training and are repaid by the government only when specific employment outcomes (e.g., 80% placement) are met.
2. Industry as “Co-Owner” not “Consumer”
- Dual-Education System: Adopt the German model where students spend 60-70% of their time in a real factory or office. This ensures the curriculum is “Industry 4.0” ready in real-time.
- Legal Mandates for Large Firms: Companies above a certain turnover should be legally encouraged (or required) to operate rural skilling centers as part of their business ecosystem, not just CSR.
- Credential Signaling: Establish a “National Trust Score” for certifications. Just as a Google or AWS cloud certificate has high market value, Sector Skill Council (SSC) certificates must be co-branded with industry leaders to gain credibility.
3. Mainstreaming Vocational Education (NEP 2020 Integration)
- Stackable Credits: Vocational training should not be a “dead end.” A student learning mobile repair should be able to transfer those “skill credits” into a formal B.Tech or Business degree later in life.
- Vocationalization of Schools: Start exposure in Class 6 (as per NEP) to remove the social stigma that vocational training is only for “academic failures.”
4. “Human Augmentation” over “Job Replacement” (AI Strategy)
- Generative AI Literacy: As highlighted in the January 2026 IndiaAI Impact Summit, the focus must shift from basic digital literacy to Prompt Engineering and AI Output Validation.
- Green-Skilling: Targeted training in EV maintenance, solar grid management, and ESG (Environmental, Social, and Governance) data auditing to capture the 8 million “green jobs” projected by 2030.
5. Closing the Data Gap
- Real-Time Demand Forecasting: Move away from 5-year plans to Dynamic Skill Mapping. Use AI dashboards to track which jobs are rising in Tier-2 cities (like Coimbatore or Indore) and adjust local ITI courses every six months.
Conclusion:
Rethinking India’s skilling outcomes is central to the vision of Viksit Bharat, which aspires to make India a high-income, inclusive and innovation-driven economy by 2047. Moving beyond headline training numbers to measurable employment outcomes, productivity gains and lifelong learning pathways is essential to convert India’s demographic dividend into a skilled human capital advantage. Outcome-oriented skilling—aligned with industry demand, future technologies and social inclusion—will not only improve job quality and global competitiveness but also ensure that economic growth under Viksit Bharat is sustainable, equitable and employment-intensive, rather than skill-surplus and job-poor.
