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Chapter # 26. Skill Development


For harnessing the demographic advantage that it enjoys, India needs to build the capacity and infrastructure for skilling/reskilling/up-skilling existing and new entrants to the labour force. The goals to be met until 2022-23 are as follows

  • Increase the proportion of formally skilled labour from the current 5.4 per cent1 of India’s workforce to at least 15 per cent.
  • Ensure inclusivity and reduce divisions based on gender, location, organized/unorganized, etc.
  • India’s skill development infrastructure should be brought on par with global standards by.
  • Developing internationally compliant National Occupation Standards (NOS) and the Qualification Packs (QP) that define a job role.
  • Making all training compliant with the National Skills Qualification Framework (NSQF).
  • Anticipating future skill needs to adapt skill development courses.
  • Skill development should be made an integral part of the secondary school curriculum.

Current Situation

According to the National Policy for Skill Development and Entrepreneurship,2 more than 54 per cent of India’s population is below 25 years of age and 62 per cent of India’s population is aged between 15 and 59 years. This demographic dividend is expected to last for the next 25 years.3

With most of the developed world experiencing an aging population, India has the opportunity to supply skilled labour globally and become the world’s skill capital. However, the demographic advantage might turn into a demographic disaster if the skills sets of both new entrants and the existing workforce do not match industry requirements.

Recognizing the challenge, the Government of India has launched many initiatives to equip fresh entrants with relevant skills and to upgrade the skills of the existing workforce.

A dedicated Ministry of Skill Development and Entrepreneurship (MSDE) was set up in 2014 to implement the National Skill Development Mission, which envisions skilling at scale with speed and standards. On July 15, 2015, on the first ever World Youth Skills Day, the Honourable Prime Minister launched the Skill India scheme.4

To improve the relevance and quality of courses offered by industrial training institutes (ITIs), polytechnics and private training providers, sector skill councils (SSCs) have been involved in curriculum up-gradation/preparation, and in the assessment and certification process.

Courses are being aligned to the National Skills Qualifications Framework (NSQF). Recognition of prior learning (RPL) has been introduced to ensure certification of and bridge training for the existing work force. The year-end review 2017 released by MSDE suggests that government initiatives are gathering pace. Until   2017, 2.5 crore candidates have been skilled under the ministry’s programmes since its inception.5

This includes 40.5 lakh candidates trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), and 74 lakh candidates under fee based training programmes run by National Skill Development Corporation (NSDC).6


The National Skill Development Policy7 estimates that only 5.4 per cent of the workforce in India has undergone formal skill training as compared to 68 per cent in the UK, 75 per cent in Germany and 96 per cent in South Korea.

The India Skill Report 2018 states that only 47 per cent of those coming out of higher educational institutions are employable.8 Given that 83 per cent of the workforce is engaged in the unorganized sector with limited training facilities, upgrading of skills, both in manufacturing and services sectors remains a challenge.

The major challenges to skill development are the following:

  • Mapping skill requirements sector-wise and geographically.
  • Making vocational training an aspirational choice.
  • Involving industry for improved quality and relevance – scaling up the apprenticeship programme.
  • Integrating the informal sector into the skill development ecosystem.
  • Putting in place an effective, internationally recognized assessment and certification system.

Way Forward

Mapping skill requirements for a demand driven skill development ecosystem

  • Skill development plans and strategies should be developed by geography and sector by mapping the availability of infrastructure and on the basis of assessing skill requirements both at the national and state levels. Talukas/districts should be required to provide the information required for such mapping.
  • Industry stakeholders must be incentivized to provide data on their skill requirements on an ongoing basis, which could be used as input for the skill requirement assessment made at different levels.
  • Regular labour market studies should be conducted and published by the MSDE in collaboration with the SSCs. These studies should capture changes in industry requirements to assess the skill sets required and introduce changes in training curricula.
  • Create vocational training innovation centres for systematic research and conducting longitudinal studies on improving vocational education.

Improving training delivery and quality 

  • Capacities of teacher training institutes need to be upgraded to ensure the availability of qualified trainers. It is also important to provide for cross learning by teachers and industry experts through industry-institute linkages.
  • A single regulatory body with branches in all states should be set up to lay down minimum standards for all players in the skilling system like training providers, assessors, etc., and to issue NSQF aligned certificates.
  • To address the requirement of skilled workers in the unorganized sector, scaling up RPL is required under the PMKVY, using bridge training, apprenticeship, dual training, work-based learning and advanced courses.
  • In addition to scaling RPL, there should be a focus on the identification of transferable skills.This can be done by developing a skills/trade matrix; and highlighting the overlap of skills across different trades, such as information and communication technology (ICT), knowledge of languages, etc. The most common transferable skills across the board should be made part of the basic skill development curriculum.

Vocational education in secondary schools 

  • As recommended by the Sub-Group of Chief Ministers on Skill Development,9 vocational education may be initiated from class VIII. The report pointed out that lessons could be drawn from the “The Himachal Pradesh Payment of Skill Development Allowance to Educated Unemployed Persons Scheme, 2013.” This has provided for an allowance starting from INR 1,000 per month for students who have at least passed VIII standard.10
  • This will help children get acquainted with formal vocational courses and apprenticeship training. Provisions for credit transfers into higher education could also be considered.
  • Participation by private schools should be incentivized with lower interest rates on loans to expand training facilities.

Apprenticeship programmes 

  • Active advocacy is needed to create awareness about recent amendments in the Apprenticeship Act, 1961, and about the National Apprenticeship Promotion Scheme (NAPS) among different stakeholders.
  • The claim process for reimbursement, through which companies get appropriate refund for funds spent on stipends under the NAPS, needs to be streamlined.
  • Facilitate the integration of the micro, small & medium enterprises (MSME) sector into the apprenticeship system by linking it to MUDRA scheme.


  • Mainstreaming skill development with education through a system for academic equivalence to ITI’s qualifications. This would provide ITI candidates option to attain academic qualification as well.
  • An Overseas Employment Promotion Agency should be set up at the national level under the Ministry of External Affairs. Apart from working with the MSDE to train and certify Indian workers keen on overseas employment, in line with international standards, it could also support pre-departure orientation training (PDOT), including language and soft skills training modules. This agency could help in identifying potential partners and streamlining efforts of India international skill centers.
  • Publicize role models/micro entrepreneurs who have benefitted from vocational training courses.


  • Alternative financial sources such as Corporate Social Responsibility (CSR) funds, Compensatory Afforestation Fund Management and Planning Authority (CAMPA) funds, Building & Construction Workers’ Cess, Members of Parliament Local Area Development (MPLAD) Fund, Mahatama Gandhi National Rural Employment Guarantee Act (MGNREGA), etc., should be tapped to expand the skill programme and contribute to national skill development fund.

Strengthening SSCs

  • SSCs should be clustered and based on occupations/functions with respect to job standards/QPs across domains. New technologies could also be considered as a criterion for clustering. This would ensure convergence in efforts of different SSCs.
  • It is recommended that job roles of SSCs having horizontal applicability across sectors should be integrated and customized to a sector’s requirements.11

Monitoring and evaluation

  • Since skilling is dynamic, it is necessary to monitor programmes regularly. Hence, it is necessary to develop state level indicators, such as placement rates, which help monitoring whether demand requirements are being addressed, and the impact of various government schemes.
  • NSDC may get into partnerships with private jobs counseling agencies for helping newly skilled persons with soft skills and adapting to local conditions.

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