Skill development
Sunday, 17 August 2025 8:24 AM
According to the India Skills Report 2025:
• Employability: Over 50% of graduates (53.47% for Male and 46.53% for Female) are employable in 2024, up from
33% a decade ago (17% rise).
Recently the Union Cabinet approved the Employment Linked Incentive (ELI) Scheme which is expected to enhance youth
employability, nurture skills and facilitate job retention in private sector.
Announced in union budget 2024-25
Ministry of labour and employment
DEFINITION
Skill development is a structured, continuous process of identifying, acquiring, enhancing and
applying relevant skills to improve individual competence, productivity and adaptability for
personal, social and economic goals.
WHY NEEDED (KEY POINTS)
• Structural change: Agriculture now ~17% of GDP; manufacturing/services need skilled
labour.
• Demographic dividend: ~65% of population <35 — urgent need to make youth employable.
• Employability gap: Only ~48–50% youth/graduates are job-ready; formal vocational training
penetration very low (≈5.4% or lower).
• Industry demand: Sectors like textiles, IT, infrastructure and green jobs face acute skill
shortages.
• National goals: Skills required to realise Make in India, Digital India, $5-trillion economy and
the National Infrastructure Pipeline.
Key Issues and Challenges in Skill Development
• Limited Skilling Capacity: India’s skilling capacity is insufficient, with less than 7
million people trained annually, while 12 million enter the workforce each year, leading to a
significant skills gap.
• Low Employability of Graduates: Despite completing formal education, only 50% of
graduates are employable due to a lack of industry-specific skills, as reported in the India
Skills Report 2023.
• Fragmented and Uncoordinated Ecosystem: The skill development ecosystem is
fragmented, with various ministries running different schemes, causing poor coordination
and inefficient use of resources.
• Subpar Training Quality: The proliferation of ITIs without quality control has led to
substandard training. For instance, under PM Kaushal Vikas Yojana, only 21% of trained
individuals secured employment.
• Inadequate Industry Participation: Only 16% of firms offer in-house training, far below the
80% seen in China, and there is limited collaboration on course development and
apprenticeship programs.
• Underutilisation of Funds: Despite budget allocations for skill development, funds have
remained underutilized in recent years, pointing to inefficiencies in implementation.
• Rapid Technological Changes: The fast-paced evolution of technology requires constant
reskilling and specialized training, complicating efforts to predict future workforce needs.
• Social Stigma Towards Vocational Education: Vocational education is perceived as
secondary to traditional academic education, leading to low participation, with only 3% of
senior secondary students opting for vocational courses.
KEY CHALLENGES (CONCISE)
• Insufficient capacity: <7 million trained/year vs ~12 million entering workforce.
• Low quality & relevance: Many courses are poorly aligned to industry; placement rates are
low.
• Fragmentation: Multiple schemes across ministries → coordination failures.
• Weak industry participation & apprenticeship culture.
• Technology pace & reskilling needs.
• Social stigma against vocational paths; poor female participation and rural access.
KEY GOVERNMENT / PARTNER INITIATIVES (short)
• PMKVY (flagship short-term training + RPL).
• NAPS (incentivises apprenticeships).
• SANKALP (institutional strengthening, district plans).
• RPL (certify informal workers).
• PMKK, JSS, Global Skills Park, eSkill India.
• Sector schemes: SAMARTH (textiles), Green Skill Development, Seekho-aur-Kamao,
USTTAD, Nai Manzil.
• Private/digital partners: Google Internet Saathi, Microsoft YouthSpark, FutureSkill PRIME.
WAY FORWARD (PRIORITISED ACTIONS)
1. Industry-led, demand-driven training + scale apprenticeships.
2. Outcome-based funding (placement + retention incentives).
3. Integrate vocational pathways into school/college with credit transfer.
4. Strengthen RPL, quality assurance & digital MIS (ASEEM/Skill India Hub).
5. Focus on reskilling, transferable skills and women’s inclusion.
6. Use PPPs, mobile training units and local (panchayat/district) planning.
CONCLUSION
Convert supply into sustained employability and incomes by prioritising quality, industry-
alignment, apprenticeships and outcome-oriented implementation.
Introduction (1–2 lines)
Education, skill and employment form a causal and cyclical triad: education builds cognitive
foundations, skill training converts potential into job-specific capabilities, and employment is the
productivity-realising outcome. Skill development programmes have expanded the supply of job-
ready human resources, but linkages remain imperfect.
Analysis — Linkages between Education, Skill and
Employment
1. Education → Skill (foundation and gateway)
• Foundational learning: basic literacy, numeracy and digital fluency from school are
prerequisites for effective skilling. Without these, vocational training has low returns.
• Bridging knowledge with application: general education provides conceptual understanding
(problem-solving, communication) which complements technical skill acquisition.
• Pathways: tertiary and vocational streams create multiple entry points — academic
progression, polytechnics, ITIs, community colleges.
2. Skill → Employment (employability and productivity)
• Job-specific competencies: industry-aligned skills (technical + soft skills) increase
employability and on-the-job productivity.
• Flexibility & mobility: modular and stackable credentials enable upskilling/reskilling and
labour mobility across sectors.
• Demand-supply fit: apprenticeships and industry partnerships raise the probability of
placement and reduce recruitment costs for firms.
3. Employment → Education & Skill (feedback loop)
• Labour market signals: employment outcomes inform curriculum and training priorities;
wages signal high-demand skills.
• On-the-job learning: employment becomes a continuing source of skill accumulation
(learning-by-doing), feeding back into human capital.
Evaluation in Indian context (strengths & gaps)
Strengths / successes:
• Large-scale skilling initiatives (e.g., Skill India/PMKVY, expansion of short-term training and
placement efforts) increased the numerical supply of trained candidates to several sectors
(construction, retail, hospitality, IT-BPM).
Persistent gaps:
• Quality & relevance: many trainings focus on short-term certifications with weak industry
recognition.
• Foundational deficit: poor school learning undermines training absorption.
• Mismatch: geographical mismatch, low uptake by formal sector, weak career progression
and low employer trust in credentials.
• Data & pathways: fragmented certification systems; limited apprenticeship uptake.
Way forward (policy measures)
1. Integrate school education with vocational streams — career counselling from secondary
level; work-study options.
2. Scale industry-led apprenticeships and dual-training models (local adaptation of Germany’s
dual system).
3. Lifelong learning architecture — modular credentials, credit accumulation and national
portability (à la Singapore’s SkillsFuture).
4. Quality assurance & employer engagement — accreditation, employer consortia and
outcome-based financing.
5. Strengthen foundational learning — remedial education to raise trainees’ preparedness.
6. Labour-market information systems — real-time demand data to guide training supply and
regional planning.
Conclusion (1–2 lines)
Effective linkage of education and skilling with employment requires systemic alignment — strong
foundational education, industry-integrated skilling, credible certification, and market-responsive
governance — to turn expanded human-resource supply into sustainable, productive
employment.
Value addition
We have around 14000 ITI and 25 lakh seats in these ITIs but only 10 % Indians are skilled as per India Skill report.
Where we are lacking?
Ans:
1. Germany introduces Vocational education and training(VET) in upper secondary level and in India, while in India it is
after high school education.
2. Singapore offers VET and after that student can go for traditional university education while in India there is no
formal academic progression in the life of students after ITI.
3. Quality of vocational education and training is poor in India. Singapore has industry led curriculum design and in
India bureaucratic led design curriculum.
4. ITI instructor post is vacant and there is a lack of monitoring of these institutes.
India is investing only 3% of total education expenditure in VET in comparison to 10-13% in germany, singapore and
canada.
Suggestion:
1. Align VET course with local industry demand.
2. Involve MSME and use CSR Funding.
3. Increase public spending on VET.
4. Strengthen ITI grading by trainee feedback.
