[Answered] India’s vocational training system needs reinvention through public-private partnerships. Examine how this governance model can enhance employability and address the national skill gap for harnessing the demographic dividend.

Introduction

India’s demographic dividend is at risk as only 4% of the workforce is formally skilled. Reinventing vocational training through strong public-private partnerships (PPP) can boost employability and productivity.

Why India needs VET reform

1. Low formal skilling: Only ~4% formally trained versus 75% in Germany and 96% in South Korea (MSDE, 2023).
2. High youth unemployment: PLFS 2023 showed ~17% unemployment in 15–29 years age group.
3. Industry demand-supply mismatch: Sectors like manufacturing, EV, semiconductors, green energy demand mid-level technical skills unmet by current system.
4. Sub-optimal institutions: 14,000+ ITIs, but only 48% seat utilisation; one-third trainer posts vacant; outdated curricula.

Challenges of the existing system

1. Late entry point: VET is introduced post-school; NEP 2020 recommended integration from Class 6, but implementation is slow.
2. Lack of career pathways: No credit transfer or linkage to higher education; unlike Singapore’s polytechnic and university pathways.
3. Perception issues: Seen as inferior to academic education; weak industry linkages lower job absorption.
4. Fragmented funding and governance: Multiple ministries and schemes; low private investment.

Role of Public-Private Partnerships (PPP)

PPP can act as a governance and delivery mechanism for efficiency and scale. Successful models abroad show:

1. Curriculum and quality design: Industry-led updates to keep courses market-relevant (Singapore SkillsFuture, German Dual System).
2. Infrastructure modernisation: Private players invest in labs, simulators, smart classrooms; example: Tata STRIVE upgrading ITIs.
3. Apprenticeships and placements: Germany’s 50% apprenticeship model leads to ~90% employability; India can scale its National Apprenticeship Promotion Scheme (NAPS).
4. Faculty and trainers: PPP allows flexible hiring of industry experts; Larsen & Toubro and Maruti Suzuki ITI tie-ups show better outcomes.
5. Funding and sustainability: Shared investment reduces pressure on public finances; CSR and Sector Skill Councils can pool resources.

Recent initiatives and gaps

1. PM Kaushal Vikas Yojana (PMKVY 4.0): Skill hubs proposed; yet coverage limited.
2. National Credit Framework and Skill India Digital Platform: Can integrate credit-based mobility across VET and academics.
3. PM Internship and ELI Schemes: Focus on jobs, but weak skilling components.

Way forward

1. Early integration and career pathways: Implement NEP 2020’s vision; link to higher education.
2. Institutional reforms: Grant ITIs autonomy, performance-linked funding, state-level Skill Universities.
3. PPP at scale: Use hub-and-spoke models with MSMEs; incentivise private investment via tax breaks, CSR credits.
4. Demand-driven skilling: Use real-time labour market data; focus on sunrise sectors like AI, green hydrogen, EV.
5. Inclusion and equity: Ensure rural, women, and marginalised groups have access; integrate digital skilling.

Conclusion

Harnessing India’s demographic dividend requires aligning skills with market needs. PPP-led vocational training can deliver industry-ready workers, bridge the skill gap, and power inclusive economic growth.