Rethinking India’s Skilling Outcomes

India’s Puzzling Skilling Paradox

In the decade following the launch of Pradhan Mantri Kaushal Vikas Yojana (PMKVY) in 2015, India's flagship skilling scheme certified 1.40 crore candidates. Yet, despite this massive effort, the India Skills Report 2025 revealed that only a slim 2% of graduates opted for additional skilling certifications post-degree. What does this say about the credibility of skilling as a pathway to economic mobility? A closer look at Periodic Labour Force Survey (PLFS) data only complicates the picture: wage gains for vocationally trained individuals remain modest and uneven, suggesting limited recognition for certified skills in India's labour markets. This disconnect raises uncomfortable questions about whether skilling schemes are addressing the right outcomes or merely creating symbolic certifications.

Degrees vs. Skills: Why Young Indians Prefer the Former

The preference for degrees over skill certifications runs deeper than simple aspiration—it reflects social and economic incentives. Degrees signify long-term mobility, social stature, and credibility, while certified skills often fail to do the same. Unlike Germany or South Korea, where vocational training is deeply integrated into formal education and widely regarded as a first-choice pathway (evidenced by vocational participation rates of 70% and 90%, respectively, according to OECD data), India's vocational ecosystem remains structurally isolated from the higher education framework.

Compounding this issue are weak industry partnerships. Most Indian businesses prefer to invest in internal training systems, private certifications, or even informal referrals over reliance on publicly certified candidates. The National Apprenticeship Promotion Scheme (NAPS), while expanded to foster industry participation, has disproportionately benefited large firms, leaving smaller enterprises and MSMEs on the margins. Sector Skill Councils (SSCs)—the institutions meant to bridge these gaps—have largely underperformed, failing to hold certifications to a standard of employability or adequately integrate industry needs into training curricula.

The Machinery Behind Skilling: Are SSCs Delivering?

The institutional backbone of India’s skilling ecosystem rests on Sector Skill Councils (SSCs), functioning under the National Skill Development Corporation (NSDC). Mandated to align skill standards with industry relevance, SSCs theoretically represent a collaborative model where industry and government co-design training programmes. However, their track record paints a different picture. Curriculum design often lags behind evolving labour-market needs; certification standards remain symbolic, and accountability for employability outcomes is almost non-existent.

In contrast, global tech certifications like AWS, Google Cloud, and Microsoft are trusted worldwide because credentialing institutions carry reputational risk—they stake their credibility on placement outcomes. For SSCs, however, the absence of direct consequences for failure has eroded trust in public skilling programmes. Unless SSCs are held to measurable employment benchmarks, certifications will remain aspirational rather than functional tools in the labour marketplace.

Mismatch Between Training and Economic Reality

The numerical success of PMKVY—training 1.40 crore candidates in a decade—is marred by an uncomfortable reality: demand–supply mismatches in skills persist unabated. Training often fails to address the actual needs of industries. Employers are treated as end-users, not co-designers, resulting in curriculum irrelevance. Even sector-specific training fails when hiring criteria prioritise degrees, experience, or private certifications over public ones.

For instance, India’s generous skilling budget for PMKVY—generating an annual expenditure of thousands of crores—has led to high training numbers but limited transformation in job readiness or wage capacity. The Periodic Labour Force Survey (PLFS) data shows that individuals with vocational training experience only modest wage increases and, in many cases, no improvement in life quality indicators. This raises deep questions about whether skilling programmes are misaligned with the labour market or whether larger inefficiencies are at play in the labour-policy interface.

The Real Questions Nobody Is Asking

Despite the government's expansive rhetoric around skilling schemes, certain critical issues remain underexplored. Why do SMSCs (Small and Medium Skill Certification Systems)—the backbone of the public scheme—lack accountability for tangible placement outcomes? Why have MSMEs, which employ over 110 million workers, been largely excluded from meaningful apprenticeship programmes, despite their obvious need for upskilled workers?

There is also the unanswered question of political timing. PMKVY’s shifts toward certification-heavy employment models correlated conspicuously with electoral cycles, raising troubling concerns about whether this scheme prioritised optics over impact. Furthermore, state-level variation remains glaring: northern belt states report fewer certified placements compared to southern states, yet national policy metrics treat aggregate figures without genuine disaggregation.

Learning from South Korea: Embedded Skilling Systems

South Korea offers a sharper contrast than Germany or Japan when assessing India’s skilling deficiencies. Following structural reforms in 1995, South Korea embedded skill-acquisition pathways directly into its higher education framework—including diploma integrations for vocational certifications. This model demonstrated that an embedded system eliminates aspirational conflicts between traditional degrees and vocational streams, a problem India has thus far failed to address. In India, skilling remains an alternative rather than a complementary track, perpetuating its second-tier status in the eyes of employers and society.

South Korea’s emphasis on industry-driven skilling also ensured that corporate partnerships were deeply incentivised, generating vocational credibility. India’s lack of binding obligations for industry participation—be it curriculum design or hiring benchmarks—continues to limit the traction and trustworthiness of its skilling ecosystem.

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