Relevance for UPSC: GS Paper II (Education, Governance), GS Paper III (Human Capital, Employment, Economic Growth)
Source: The hindu ; Government data, policy analyses, editorial assessments

Context

Over the past decade, India has built one of the largest publicly funded skilling ecosystems globally, anchored by schemes such as the Pradhan Mantri Kaushal Vikas Yojana. Yet, employability, wage outcomes, and job quality remain weak. The central concern is that skilling in India has evolved as a supply-driven welfare intervention, rather than a demand-driven productivity strategy aligned with labour markets.

Key Data Signals

• Pradhan Mantri Kaushal Vikas Yojana (2015–2025): ~1.40 crore candidates trained
• Formally skilled workforce: ~4 percent (Periodic Labour Force Survey)
• Youth in informal employment: Over 85 percent of total workforce
• Gross Enrolment Ratio in higher education: ~28 percent
• Organisation for Economic Co-operation and Development benchmark: ~44 percent students in vocational tracks
• Skill wage premium: Low and unstable, especially outside organised sector

Structural Fault Lines

1. Skills Are Not Aspirational

• Strong social preference for degrees over skills
• Weak wage mobility post-training
• Limited vertical mobility into higher education

2. Industry Is a Peripheral Actor

• Employers do not trust public certifications as hiring signals
• Preference for firm-specific or global credentials
• Minimal employer accountability for outcomes

3. Sector Skill Councils Underperform

• Intended as industry-led bodies
• In practice: focus on standards, not placement or wages
• Fragmented responsibility across multiple agencies

4. Certification Without Capability

• Assessment measures procedural competence, not productivity
• Weak signalling in labour markets

5. Informality Dilutes Impact

• Skilled youth absorbed into low-productivity informal jobs
• Skills underutilised, wages stagnant

Institutional and Policy Architecture

• Pradhan Mantri Kaushal Vikas Yojana: Short-term training focus
• National Apprenticeship Promotion Scheme: Limited scale and employer uptake
• National Skill Development Corporation: Financing and coordination
• Industrial Training Institutes modernisation
• National Education Policy 2020: Integration of vocational education into schooling and higher education

The World Bank and International Monetary Fund emphasise that employer-led skilling systems are critical for productivity-led growth.
The Second Administrative Reforms Commission warned against treating skill development as a stand-alone social scheme.

Why This Matters for India’s Growth Story

• Weak skilling outcomes constrain manufacturing competitiveness and services expansion
• Public spending yields low economic returns
• The demographic dividend risks becoming a demographic burden

Way Forward: Reforming the Skilling Paradigm

• Integrate vocational education within degrees and diplomas with credit portability
• Make industry co-owner of curriculum, assessment, and certification
• Reform Sector Skill Councils with outcome-based accountability
• Expand apprenticeships as the core skilling pathway, especially for micro, small and medium enterprises
• Shift focus from numbers trained to jobs, wages, and productivity

Summary

India’s skilling challenge lies not in scale or funding, but in weak labour-market integration and credibility.

One-line Wrap: Skilling without jobs cannot deliver growth or dignity.

Q. Why has India’s large skilling ecosystem failed to deliver commensurate employment outcomes? Discuss reforms.