Skill Development in India – Challenges & Initiatives – Explained Pointwise

Over the last decade, India has built one of the largest skilling ecosystems in the world. Between 2015 & 2025, India’s flagship skilling programme, PM Kaushal Vikas Yojana, has trained & certified around 1.4cr candidates, Still, the employability outcomes remains uneven, and PLFS data show that wage gains from vocational training are modest & inconsistent, particularly in informal employment, where most workers are absorbed, offering limited recognition for certified skills & very less visible improvement in quality of life.

What are the challenges or limitations in India’s skill development programme?

1. Skill Mismatch: According to the India Skills Report 2025, only about 54.8% of Indian graduates are considered employable. Many training programs still focus on outdated curricula that don’t reflect current industry needs in AI, robotics, or the green economy.
2. Low Placement Rates: PMKVY 1.0, 2.0 and 3.0 had placement rates of roughly 18-23 percent, dropping to about 10 percent in PMKVY 3.0, indicating limited translation of training into jobs.
3. Lack of “Skin in the Game”: Many employers do not recognize government certifications, preferring their own internal training or private certifications (like those from Google or AWS) which they find more rigorous.
4. Weak Apprenticeships: While the National Apprenticeship Promotion Scheme (NAPS) has grown, it still accounts for a tiny fraction of the total workforce compared to countries like Germany.
5. Failure of Sector Skill Councils (SSCs): SSCs were created to act as industry-facing institutions that define standards, ensure relevance, and anchor employability. SSCs have not only failed to fulfill its mandate but have largely limited themselves to standard creation.
6. Aspiration Gap: Traditional degrees are still seen as the only path to social mobility. Vocational courses are often viewed as a “last resort” for those who fail in mainstream academics.
7. Rural Disconnect: Training centers are often clustered in urban hubs, leaving rural youth to deal with long travel times and high opportunity costs.
8. Gender Barriers: Women face additional hurdles including limited mobility, lack of childcare at centers, and societal restrictions, leading to lower participation in high-growth technical trades.
9. Fragmented Ecosystem: The entire skill development ecosystem in India is fragmented: training is delivered by one entity, assessment by another, certification by SSCs, and placement by someone else. This fragmentation has eroded trust & diffuses the responsibility without consequences.

What are the various initiatives for skill development of the labour force in India?

What can be the way forward to improve skill development in India?

1. Mandatory Apprenticeships: Transitioning from optional to mandatory apprenticeship-linked degrees (e.g., the PM-NAPS expansion). This ensures students spend 50% of their time on the shop floor or in an office rather than just a classroom.
2. Industry-Integrated ITIs: Modernizing Industrial Training Institutes (ITIs) through Public-Private Partnerships (PPP) where companies like Tata, Maruti, or Google “adopt” centers to install the latest equipment.
3. Academic Credit Bank: Under the National Education Policy (NEP) 2020, credits earned from a welding or coding certificate can now be transferred to a formal university degree. Embed vocational subjects as electives from Class 8 under NEP 2020, with credit transfer between academic and skill streams for seamless mobility.
4. Global Mobility: Signing Migration and Mobility Partnership Agreements (MMPAs) with countries like Germany, Japan, and France to ensure Indian certifications are recognized globally.
5. Enforce Accountability: India’s skilling challenge is a failure of accountability, not of intent or government funding. Thus, focus on enforcing accountability in the institutions of the skilling ecosystem, especially in SSCs. Until SSCs are held accountable for employability, certification will remain symbolic rather than economic.

Conclusion: When skills are embedded in degrees, when industry is treated as co-owner, and when SSCs are made answerable for placement outcomes, skilling move from fragmented welfare intervention to a pillar of national economic empowerment.