Why India’s Skilling Outcomes Remain Weak

India has created a large skilling ecosystem, with around 1.40 crore candidates trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) between 2015 and 2025.
Despite this scale, skilling has not become an aspirational career pathway and employment and wage outcomes remain uneven.
Only about 4.1% of India’s workforce has formal vocational training, compared with much higher levels in OECD economies.

In the informal sector, where most trainees eventually work, vocational certification often translates into limited wage gains and improved livelihoods.
The problem is therefore not merely inadequate training capacity but weak linkage between skills, employment, wages and career progression.

Structural Gaps in India’s Skilling Ecosystem

Skilling remains weakly integrated with mainstream education; with India’s Gross Enrolment Ratio (GER) in higher education at around 28%, vocational pathways need to become part of formal higher education rather than remain standalone alternatives.
Internationally, vocational education is mainstream: around 44% of upper-secondary students in OECD countries pursue vocational education, rising to nearly 70% in some European economies.
India also lacks a strong culture of post-degree upskilling, with graduates often treating skilling as separate from academic qualifications.
Training programmes frequently remain supply-driven rather than being based on actual labour-market demand, contributing to skill mismatches.
Skills become economically meaningful only when they lead to higher productivity, better wages and credible career mobility.

Industries face high attrition, often around 30–40%, prolonged onboarding and productivity losses, making workplace-oriented skilling economically important.
However, employers often do not rely on government-issued certificates while hiring, preferring work experience, referrals, internal training or private certifications.
Apprenticeships under the National Apprenticeship Promotion Scheme (NAPS) have expanded, but their benefits remain uneven across firms.
Sector Skill Councils (SSCs), created to make skilling industry-led, have struggled to ensure that occupational standards and certifications translate into actual hiring.
Fragmented responsibility for training, assessment, certification and placement weakens accountability.
In contrast, certifications such as those offered by AWS, Google and Microsoft derive credibility from rigorous assessments and the certifier’s direct stake in maintaining market reputation.
SSCs therefore need outcome-based accountability for employability, employer acceptance and labour-market outcomes rather than merely certification numbers.

Shift from counting trainees and certificates to measuring employment, wages, retention, productivity and career progression.
Make industry a genuine co-owner of curricula, standards, assessments, apprenticeships and placement outcomes.
Expand workplace-embedded training and apprenticeships, particularly through NAPS and industry-linked ITI modernisation.
Integrate vocational education with degrees and higher education so that skilling becomes a mainstream pathway rather than a second-choice option.
Strengthen placement-linked public–private models combining rigorous candidate selection, quality training and assured employment opportunities.
Use real-time labour-market information to align curricula with emerging sectoral demand and reduce skill mismatches.

Skilling must translate into better pay; workers will not view vocational pathways as attractive if certification does not improve earnings or working conditions.
Broader industrial reforms are necessary because regulatory barriers, limited access to finance and land, corruption and trade constraints can suppress firm productivity and wages.
The objective should move beyond employability to dignity of labour, productivity, social mobility and sustainable livelihoods.
India’s demographic advantage can generate sustained economic growth only when workers possess market-relevant skills and firms have the capacity and incentive to reward those skills.
Thus, India needs to move from a “training-centric” model to an “outcome-centric” model in which skills are valued through actual productivity, wages and career opportunities.