In recent years, the Centre has undertaken several skilling initiatives to ensure that graduates entering the workforce possess the requisite skills to join various verticals. There is a sound rationale for the shift in focus from academic degrees to industry-relevant skills. Today, workers need both vocational skills and digital literacy to retain relevance in the current job market.
Academic degrees based on rote learning are now outmoded, as traditional education is far behind the fast-evolving requirements of industry. New-age sectors prefer digitally savvy, role-ready applicants who possess problem-solving, creative capabilities and hold industry-specific skills.
In such situations, statistics sometimes tell a striking tale. The 2024-25 Economic Survey revealed that barely 8.25% of graduates in India worked in roles aligned with their academic qualifications. This single statistic shows that a massive mismatch exists between graduates’ current skills and industry needs. Since the government has ambitious plans to transform the country into a fully developed economy, Viksit Bharat@2047, the emphasis on skills and capabilities rather than degrees is laudable.
Globally, India is one of the youngest countries, with more than 54% of its population under 25 years old. On the other hand, more than 54% of its people are between the age group of 15 and 59 years. But this demographic dividend is projected to hold only till 2040. In other words, India has less than 15 years to address the skills shortage and capitalise on its demographic advantage.
In this landscape, vocational training is important in sectors such as retail, health care and hospitality, as it offers gainful employment opportunities for youth across various sections of society. Besides creating robust employment opportunities, vocational training can be instrumental in spurring India’s economic growth while driving inclusive cross-country development.
The India Skills Report 2026 highlights the evolving nature of the domestic job market amid changing workforce dynamics and technological advancements. In this scenario, the significance of vocational training cannot be over-emphasised as the country currently has a severe shortage of skilled, well-trained workers. According to estimates, only 2.3% of India’s workforce has formal skills training. Conversely, these numbers are as high as 68% in the UK and 96% in South Korea.
Given the potential of skilling programmes to promote inclusive economic growth, the Union Budget 2026-27 has designated skill development as a cross-sectoral priority. Accordingly, ₹1.39 lakh crore has been allocated to the education sector, an increase of 8.27% over the previous year.
The shift in focus from education to employability metrics has ushered in a new era in which outcome-based, industry-aligned, continuous learning, reskilling and upskilling have become indispensable. The National Skill Development Mission (NSDC) has been playing a pivotal role in creating a vibrant skilling ecosystem in the country. NSDC’s programmes are based on a public-private partnership model that promotes skilling initiatives.
While working with private-sector partners, NSDC also acts as an implementation arm for various Government of India skilling schemes. It does so by standardising training frameworks, certifying skill levels, promoting vocational education and encouraging private-sector participation. NSDC courses also focus on women, underserved or marginalised communities and rural cohorts.
In this endeavour, some private players are also striving to bridge the education-employment gap for India’s youth and women through immersive vocational skilling courses. These training programmes are not based solely on certificates. Instead, they provide training linked to education and employment outcomes. Among others, these skilling programmes focus on the retail, health care and hospitality segments, which are aligned with Skill India and other sectoral skill councils.
For example, retail skilling ensures candidates are job-ready and trained in customer service, inventory management, POS systems and related areas. Hospitality training builds skills in guest management, communication, service etiquette and more. Thereafter, placements are facilitated at renowned retail outlets or hospitality firms, where the dignity of labour is respected and upward mobility is ensured.
As industry requirements constantly evolve in a dynamic work environment, degrees alone will not be sufficient for candidates to be job- and future-ready. In a highly competitive workforce, candidates must embrace the mantra of lifelong learning to remain relevant amid evolving job requirements. This can be done via upskilling programmes, online courses and micro-credential certificates.
Candidates with up-to-date skills also stand a better chance of securing jobs in the MSME sector, which is India’s second-largest employer after agriculture. More than 74.7 million MSME firms employ 328.2 million people. The Economic Survey 2025-26 noted that MSMEs account for approximately 35.4% of manufacturing, about 48.58% of exports and 31.1% of the GDP. Therefore, the employment potential of MSMEs should not be overlooked.
Since India aims to become a fully developed $30 trillion economy under its Viksit Bharat@2047 vision, the workforce must be equipped with future-ready digital and vocational skills. To achieve this goal, vocational training must be fully leveraged as a strategic roadmap to boost India’s employment and entrepreneurship potential. The Centre’s dream of inclusive development will then be realised in Viksit Bharat.
(The views expressed are personal)
This article is authored by Aashman Sarin, director and founding member, Monica Sarin Foundation.