Economic Survey 2025-26: India’s skilling gap starts early—and schooling alone isn’t fixing it

The Economic Survey 2025-26 flags a stark skill deficit, with majority of adolescents in India receiving little or no formal training before entering the workforce, weakening the country’s ability to convert its demographic advantage into productivity.

By the numbers

The 2023-24 edition of the Periodic Labour Force Survey (PLFS), conducted by India's National Statistics Office (NSO), highlighted by The Economic Survey show that among Indians aged 14–18:

• 91.94% have received no skilling exposure
• 7.09% acquired skills informally, without certification or clear employability pathways
• Just 0.97% received formal skill training

In absolute terms, over 1,072 lakh adolescents report no skilling at all.

Breaking it down

Even among the small fraction receiving formal training, skill exposure is heavily concentrated:

• 52.9% trained in IT/ITeS
• 11.3% in textiles and apparel
• 8.7% in office and business services

 High-potential sectors such as electrical and electronics, healthcare and life sciences account for only a marginal share of formal training.

What’s driving it

Limited integration of vocational education within mainstream schooling and weak industry–school linkages. There is over-reliance on informal, uncertified skill acquisition. Also, there is lack of availability of formal training options beyond IT/ITeS.

Bottom line

While IT/ITeS dominate training demand, labour-intensive and services-led sectors face shortage of certified, job-ready workers.

India’s skilling challenge isn’t just about training adults — but it begins in school.  The demographic advantage depends not just on how many young people India has, but also on how prepared they are.

The Economic Survey 2025-26 further highlights that, “To harness the demographic dividend ‘and build a workforce for a modern economy, a multipronged approach is needed.”

The report further suggests that composite schools could be established to ensure smooth transitions from pre-primary to higher secondary education. Vocational education integration from grades VI-XII may include practical exposure and industry visits to enhance career awareness.