Is it time for a reset of India's flagship Skill India Mission?

With a median age of 28, India’s population can power economic growth. But for decades, imparting skills and vocational training has been a challenge for policymakers and industry, putting the considerable demographic advantages that the country enjoys at risk. In fact, industry has for long complained that most of India’s graduates are unemployable with little or no on-the-job skills and training. As per Mercer-Mettl’s India’s Graduate Skill Index 2025, just 42.6% of Indian graduates were employable in 2024, down from 44.3% in 2023. It attributed this to a drop in non-technical skills.

Nipun Sharma, CEO of TeamLease Degree Apprenticeship, a degree apprenticeship service provider, highlights the massive skill gap and lack of formal skilling. “Our education system continues to emphasise qualifications over skills. While the government is working hard to attract investments in areas such as semiconductors, renewable energy, and electronics manufacturing, apprenticeship adoption still remains low—only 0.27% of our workforce are apprentices compared to 3-4% in the UK or Germany,” he says.

This is apparent on the ground with learning a skill or undergoing vocational training being a choice forced either out of the economic necessity to earn quickly or lack of academic qualification to continue in the degree-based education system.

Renuka Chaudhary (name changed), a craft trainer at a government-run industrial training institute (ITI) in New Delhi, says though learning a skill can add to a degree from a college, there’s not enough awareness about its benefits. Chaudhary, who did a computer science course from a polytechnic and has three decades of teaching experience, says not much has changed from the time she was a student. The ITI staff visits neighbourhood schools every year to make students in classes X and XII aware about this option.

Avdhesh Sharma (name changed), her colleague and principal of the ITI, agrees. “Students can do a one-year or two-year course at the ITI and have a range of options—getting a job, starting a business or studying further.” But often, those who pass out get discouraged and drop out as salaries offered are low. “Companies need to pay better. Why would anyone with this kind of training want to work at a salary of Rs 10,000 or Rs 12,000 per month?”

Though the government has put in considerable work in the past decade to impart skills, there are other issues beyond low pay—from institutional drift to the ever-changing nature of the skilling landscape—undermining its efforts.

The Ecosystem

Skill development is not a new national objective. Even so, there was a decisive shift in 2014 after the government carved out a Ministry of Skill Development and Entrepreneurship (MSDE). Its flagship programme is the Skill India Mission. The National Skill Development Corporation (NSDC), set up in July 2008 as a not-for-profit, works under the MSDE on the Skill India Mission and the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). It also works to encourage private sector participation in skilling initiatives.

The ministry provides skill training through an extensive network of skill development centres and institutes under various schemes such as the PMKVY, Jan Sikhshan Sansthan, National Apprenticeship Promotion Scheme, and Craftsman Training Scheme through ITIs. Industry helps with course design. The National Council for Vocational Education and Training is the regulator responsible for upholding standards.

Since 2014, the MSDE has trained and “empowered” 60 million Indians through various schemes. Of this, over 16.3 million have been trained under the flagship PMKVY, which provides skill certification and training in industry-relevant courses through various modules, including short term training, special projects and recognition of prior learning.

Tata group veteran Jayant Krishna, who is currently non-resident senior fellow with the Chair on India and Emerging Asia Economics at the Washington D.C.-based Center for Strategic and International Studies, and former CEO, ED & COO of NSDC, says while earlier, skilling was driven by polytechnics and ITIs, government and private sector initiatives are working on a much larger scale. “Prior to that, the country was skilling about one million people annually, largely through polytechnics and ITIs.”

Time for a Reset

However, the Skill India Mission has been in the eye of a storm in recent months because of the sudden removal of NSDC CEO Ved Mani Tiwari, effective May 16, with a public notice by the agency attributing this to a decision of its Board of Directors. It did not provide a reason for the decision.

The NSDC did not respond to a questionnaire sent by Business Today. Sources close to the development point to a difference of opinion on how skilling initiatives should be run, specifically with greater emphasis on tech and AI. In the ensuing months, the NSDC board has undergone a restructuring, but remains without a CEO, which has raised concerns about its functioning. The board includes government officials as well as representatives from industry chambers.

Even beyond this immediate problem, there are a host of challenges, the solutions for which may not always be easy.

Santosh Mehrotra, a labour economist and retired professor at the Jawaharlal Nehru University, says, “They are churning out short-term trainees to meet targets. But short-term training of three months under the PMKVY is not sufficient to impart proper skills.” As a result, candidates get low-paying jobs, often in the informal sector, which they end up leaving soon thereafter. “This is evident in low placement rates under the scheme,” he says.

The Parliamentary Standing Committee on Labour, Textiles and Skill Development, in a report in March, raised other issues, too. It noted that while skill development is crucial, its impact remains limited unless accompanied by employment generation. The report on the Demand for Grants (2025-26) highlighted shortfalls in achievement of targets under various skilling schemes as well as low placements.

For instance, in FY25, 1.9 million candidates were trained under the PMKVY by March 3, 2025, as against a target of 4.5 million. Under the National Apprenticeship Promotion Scheme, around 900,000 candidates were engaged till February 28 in FY25, as against a target of 1.2 million. In fact, between FY23 and FY25, training under the PMKVY was given to only 2.8 million, or 19.53% of the targeted 14.4 million, people.

Low placements have also been an issue under the PMKVY and while the government has delinked placements under the PMKVY 4.0, the committee highlighted that “placement statistics are the real barometer for measuring the success of the scheme”. The placement rate for short-term training certified candidates till PMKVY 3.0 was a mere 42.8%. Officials say gathering placement data is not always easy. For instance, at ITIs, students often do not revert on the jobs that they have got. Further, several opt for self-employment, which is often not captured in the data.

But Krishna has a slightly different take. “One must be clear that Skill India Mission’s aim is to impart market-relevant skills to youths, but it doesn’t play a direct role in creation of jobs, which is the collective responsibility of several ministries.”

That is not all. Experts and stakeholders highlight some other problems dogging this mammoth initiative. A big concern has been low pay. To partially address this, the government recently notified changes in the Apprentices Rules, 1992. This is expected to increase stipends.

Sharma of TeamLease Degree Apprenticeship notes that stipends have risen in recent years, with market dynamics driving competitiveness. “Employers offering attractive stipends along with educational opportunities experience significantly lower attrition. Where such measures are absent, attrition remains a challenge,” he says.

Both Mehrotra and Krishna say there should be greater industry participation and it should be a demand-oriented outlook rather than the current supply-driven approach.

That said, there are areas, especially emerging skills, where there is high demand and considerable opportunities. Yogesh Kumar, Director and Founder of JITM Skills, NSDC’s largest training partner that runs as many as 46 PM Kaushal Vikas Kendras apart from other skilling initiatives, says in several skills such as those related to artificial intelligence (AI), Internet of Things (IoT), social media and digital marketing and healthcare, there is a lot of demand and placements are good. Starting salaries can be in the range of Rs 12,000–20,000 per month. According to him, three to six-month courses are often adequate. “India is running against time. We do not need a one-year or a three-year training degree for teaching skills for elder or disability care, where there is huge demand.” Krishna says there is need for a better mechanism to assess demand. “We need to tie up with industries and skill according to their current and future requirements. We also need to increase the vocationalisation of secondary education, making it a part of the curricula.”

India also needs to focus on training and skilling youth based on the demands of Industry 4.0, which includes AI, he says, adding that this will help attract investments from manufacturing companies that require a pool of trained and employable youth.

The Economic Survey 2024-25 too had called for a forward-looking strategy that prepares the workforce for emerging opportunities. Mehrotra says the government should consider giving all graduates a chance to become apprentices for one year.

A start has been made on this front with the Pradhan Mantri Internship Scheme. However, low stipends have led to a poor response from candidates. For instance, in the first round of the pilot, of the 127,000 opportunities posted, just over 8,700 candidates joined. In the second round, more than 455,000 applications were received from over 214,000 applicants. Partner companies had made 72,000 offers as on July 23, of which just 22,800 were accepted.

A fresh push

Cognisant of several of these concerns, the government has been undertaking various initiatives to re-invent its skilling initiatives. Prime Minister Narendra Modi, earlier this month, launched the PM-SETU Scheme for upgrading 1,000 ITIs with a budget of Rs 60,000 crore. The scheme will follow a hub-and-spoke model comprising 200 hub ITIs and 800 spokes. Each hub will be connected to four spokes on average, creating clusters equipped with advanced infrastructure, modern trades, digital learning systems and incubation facilities. Anchor industry partners will manage these clusters, ensuring outcome-based skilling aligned with market demand. The prime minister also inaugurated 1,200 vocational skill labs in 400 Navodaya Vidyalayas and 200 Eklavya Model Residential Schools across 34 states and Union Territories which are expected to equip students, including those in remote and tribal areas, with hands-on training in 12 high-demand sectors.

PMKVY 4.0 is also providing training for new-age roles such as AI data engineer, telecom technicians, drone manufacturing and assembly technician and additive manufacturing or 3D printing. A national initiative, SOAR (Skilling for AI Readiness), has been launched to provide AI awareness and foundational skills among students of class VI onwards and build AI literacy among educators.

In fact, at a PM Kaushal Vikas Kendra in Delhi’s Tilak Nagar run by JITM Skills, there is a mix of students—while some are pursuing graduation through correspondence, some are mid-career professionals who have enrolled in courses on social media influencing and digital marketing.

A new National Policy on Skill Development and Entrepreneurship is in the offing for 2025-35. The aim is to have a more futuristic focus, greater industry participation, and incentives like Skill Mudra vouchers to enable self-selection of skilling courses. The Impact Bond 2.0, which would channel more funding into skilling, is also proposed.

But, at the end of the day, there’s a lot more that’s needed, from all stakeholders. Krishna says while India still has a long way to go in skilling, countries like Germany, Japan and Singapore, which are known for their vocational education and skilling, have done this over a 30–40-year period.

What is also called for is a change in people’s mindset. While everyone dreams of becoming a graduate and getting an office job, very few think of training as a carpenter, electrician or beauty technician. Changing this mindset could go a long way towards realising India’s skilling ambitions.

@surabhi_prasad