Bridging India's Skills Gap: The Case for Evidence-Based Vocational Education Policies

India’s demographic dividend stands on a narrowing ledge — a generational windfall that could slip away by 2040. Despite years of policy focus and significant funds spent on vocational education, the promise of higher wages and formal employment for millions of youth remains largely unfulfilled. The real test of our skilling ecosystem is not just in the number of certificates issued, but in how well it supports individuals at the “moments that matter”—especially the crucial transition from training to the formal job market.

The Graduation Moment: Where Most Fall Through the Cracks

Post-independence, India prioritised higher education over vocational training, which only gained policy attention after 2007 through initiatives like the National Skills Policy 2015 and flagship schemes such as Skill India, PMKVY, DDUGKY, and NAPS. Participation in vocational education has risen significantly in the past two decades. However, the critical “job market graduation” moment remains uncertain for many youth. While the share of formally vocationally trained individuals has grown from 2.2% in 2011 to 3.7% in 2023, unemployment among them has nearly tripled—from 25.9 lakh in 2004–05 to 69.7 lakh in 2023–24 (PLFS). India still trails far behind global benchmarks, with countries like South Korea and Germany having a vocationally educated workforce exceeding 75%. The wage gap also reflects this disparity, with high-skill workers earning over four times more than low-skill workers (NSSO 2023–24).

This growing mismatch between training and employment highlights deeper structural issues. The rise in short-term vocational training—those under six months—has doubled from 22% in 2017 to 44% in 2023–24, often compromising quality and leaving graduates unprepared for formal jobs (ILO 2023). Bridging the gap between acquired skills and actual job market needs is crucial to unlocking the true potential of vocational education in India.

Why Digital Public Goods (DPGs) Are the Missing Link

One of the most promising solutions to this challenge lies in the use of Digital Public Goods (DPGs) for job matching and skills discovery. In South Africa, the Harambee Youth Employment Accelerator has shown how inclusive, AI-driven job matching platforms can dramatically improve employment outcomes for marginalised youth. Harambee’s DPGs use real-time data, geolocation, and skills mapping to connect job seekers with opportunities that match their profiles, increasing placement efficiency by 40% and supporting over 4 million youth (Harambee, 2024).

India can learn from this model. Our current job matching systems are fragmented and often inaccessible to those who need them most. By investing in interoperable, open-source DPGs that connect training providers, employers, and job seekers, we can ensure that vocational graduates are not left stranded at the graduation moment.

How to Break the Low-Wage, Low-Growth Trap

The reality is stark: 9 out of 10 Indian workers remain in the informal economy with limited chances for upward mobility (PLFS 2023–24). To break this cycle, we must enable youth to not only acquire relevant skills but also connect them to better-paying jobs in the formal sector. This demands a shift in approach:

1. Quality Over Quantity: Mandate longer, industry-aligned training programs. Short-term courses often fail to secure stable, well-paying jobs (ILO 2023).

2. Industry Collaboration: Co-develop curricula and apprenticeships with employers and sector skill councils to ensure relevance and job-readiness.

3. DPG-Driven Job Matching: Build open, interoperable digital platforms that link training, certification, and job placement—modeled on systems like Harambee and Indus Action’s RTE MIS.

4. Integrated Social Protection: Link skilling to entitlements like scholarships, free transport, and basic income to support the transition to formal work.

India’s skilling challenge is not insurmountable, but success hinges on shifting from counting certificates to supporting people at key transitions. The Ministry of Labour & Employment’s partnerships with private job platforms like Apna, Foundit, and Swiggy are steps in the right direction.

As AI and automation continue to rapidly reshape the workforce, our current skilling systems risk equipping young people for jobs that may no longer exist. Leveraging Digital Public Goods (DPGs) for inclusive and dynamic job matching is key to ensuring vocational training delivers on its promise of better wages and social mobility. At Indus Action, we’ve seen how DPGs enhance access to entitlements and improve policy outcomes.

As NEP 2025 draws near, policymakers must prioritise depth over breadth, quality over speed, and outcomes over outputs. India requires not just more skills, but the right skills, delivered at the right time, to the right people.

Author: Harshil Sharma, Director - Government Relations, Indus Action

Disclaimer: This is a syndicated feed. The article is not edited by the FPJ editorial team.

Published on: Monday, June 09, 2025, 04:20 PM IST