Skilling People in India

Last Update: Feb 2025 (Skilling People in India)

This article deals with ‘Skilling People in India – UPSC Notes.’ This article is part of our series on ‘Economics’ which is an important pillar of the GS-3. For more articles, you can click here.

Need to Skill people ?

The answer to this question lies in analysing the percentage share of GDP & employment of various sectors of the economy.

49% of people engaged in Agriculture contribute to only 18.7% of GDP. Shifting these people to the manufacturing & service sector by skilling them will significantly increase the economy’s overall productivity. For example, a farmer in Bihar with 1 hectare of land earns ₹50,000 annually, while a factory worker in Chennai or Pune with basic technical skills earns ₹3–4 lakh/year.
Skilling the workforce will help reduce disguised unemployment as workers can be employed in productive sectors. For example,
It will also help in land consolidation because marginal farmers will go to the service & manufacturing sectors. They can sell their lands or lease them to those who want to keep working in agriculture.
With over 65% of the population below 35 years, India has a narrow window of opportunity to capitalize on its demographic advantage by skilling the people.

Companies coming from abroad will need a skilled workforce. Skilling the workforce will make India attractive for MNCs to set up production houses. For instance, Samsung’s Noida plant employs 70,000 workers but imports technicians from South Korea due to local skill shortages.

Why do people in India lack skills?

Education: The education system heavily relies on producing the clerical rather than the skilled workforce.
Rapidly changing Technology: There is always a mismatch between the speed of technological change due to advancements in AI, automation, blockchain, and robotics and the rate of changing skill sets.
Social Acceptance: Our society gives lesser recognition to vocationally trained people (such as carpentry, plumbing, and tailoring). In contrast, countries like Germany and Switzerland have robust vocational education models where skill-based jobs are highly respected and well-paid.
Pending Labour Reforms: Employers generally prefer automation and contract labour to save themselves from labour laws and, as a result, don’t invest in skilling the workers.
Poor Infrastructure and Quality in Skill Training Centres: Industrial Training Institutes (ITIs) and Skill Development Centres lack proper infrastructure, experienced faculty, and industry partnerships.

Programs to Skill

1. Skill India Mission

Ministry of Skill Development and Entrepreneurship (MSDE)

It was created as a separate ministry in 2014.
Objective: Address India’s manpower needs and equip youth with industry-relevant skills.
Key Functions of the Ministry include
- Policy Framing: Develop policies like the National Skill Development Policy.
- Scheme Implementation: Implement schemes like Pradhan Mantri Kaushal Vikas Yojana (PMKVY), UDAAN, a Special Industry Initiative for J&K, etc.
- Industry Partnerships: Promotes PPPs and CSR funding for skill development.

Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

The scheme works under the Skill Ministry.
Objectives: Enable a large number of Indian youth to skill them with industry-relevant skills through training, thus helping them secure a better livelihood.
Primary Target Group: 10th or 12th-grade dropouts, migrant workers, rural youth, and women.
PMKVY has two training components: Short-Term Training and Recognition of Prior Learning.
Under the provisions of the scheme
- It is a certification scheme under which certification of completion, along with ₹8,000, is given to those who successfully pass the program.
- After completion, a person can also apply for a loan worth Rs. 20,000 to 1.5 lakh to start a venture.
- Soft skill & computer course is also provided.
- The main focus of the scheme is 10 or +2 dropouts.
The scheme is presently in its third phase. Several new initiatives, like the Upskilling for Weavers and Artisans in Traditional Crafts in Nagaland and Kashmir, digital marketing etc., were launched under PMKVY 3.0.

PM Internship Scheme

The scheme was announced in the Budget for 2024-25.
Nodal Ministry: Ministry of Corporate Affairs
Aim: To provide internships to 1 crore youth in top-500 companies (like Tata, ICICI, Zomato, Flipkart, etc.) over the five years.
Age Eligibility: Youth in the 21-24 age group. Selection will be based on academic performance, skill assessment tests, and industry demand.
Under the scheme,
- The Government of India pays a Monthly Stipend of ₹4,500 per month. Additionally, ₹500 per month is contributed by the company (which can be adjusted in its CSR budget).
- The Government also provides an additional ₹6,000 to each candidate to cover miscellaneous expenses (travel, food, training materials, etc.).

National Apprenticeship Promotion Scheme

The scheme aims to encourage industrial establishments to undertake apprenticeship programs by providing financial incentives.
Under the scheme, the Government reimburses 25% of the stipend (up to ₹1,500 per apprentice per month).

Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU GKY)

The scheme was launched in 2014 with the Ministry of Rural Development (MoRD) as the nodal agency.
It is a component of the National Rural Livelihoods Mission (NRLM).
Main Features of the scheme include
- The scheme follows the Placement-Linked Approach.
- Target beneficiaries include rural youth between 15-35 years.
- Training is provided by accredited agencies, known as Project Implementing Agencies (PIAs), selected through a rigorous screening process.

National Skill Development Corporation (NSDC)

NSDC is owned by the Ministry of Skill Development & Entrepreneurship (MSDE) and the private sector in a 49:51 ratio.
Key Function: Fund and support vocational training institutions to promote skill development.

Skill Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP)

It is a World Bank loan-assisted program.
Objective: To decentralize skill development and align it with local needs and youth aspirations.

Indian BPO Promotion Scheme (IBPS)

IBPS works under the supervision of the Ministry of Electronics and IT.
The scheme incentivizes the establishment of BPOs and their extension to Tier 2 and Tier 3 cities with financial support in the form of Viability Gap Funding.

Indian Institute of Skills

PM laid the foundation stone of the instruction in 2017.
“Indian Institute of Skills” is inspired by the Singapore training model.
The institute would adopt various best practices from the country.

Indian Skill Development Service

To attract dedicated young and talented administrators for skill development, the Government has established ISDS, whose first batch was inducted in 2019.

Digi Saksham

The scheme aims to improve the employability of youth by equipping them with essential digital skills.

Memorandum of Understanding

The government has signed MoUs with China, the UK, Australia, and Germany for Skill Development in India.

Schemes for Skilling the Minorities

a. Ustaad Scheme

Ustaad scheme aims to skill minority artisans.
The main emphasis of the scheme is on

Kashmiri Embroidary	Muslims of Kashmir
Jardosi	Bengali Muslims
Phulkari	Punjabi Sikhs
Thangka Painting	Buddhists

Hunar Haats are organized under the Ustaad scheme, thus providing platforms for marketing artisans’ products belonging to minority communities

b. Sikho aur Kamao

The scheme works under the Ministry of Minority Affairs.
Under the scheme, the person belonging to the Minority Community can get computer knowledge, tailoring skills, etc., from the Private Institution. The Government later reimburses that institution.

c. Manas Scheme

MANAS = Maulana Azad National Academy for Skill
It is an innovative scheme and works on the principle of ‘Giving back to the Community’ under which the leading celebrities in various skill sets are used as the driving force behind the skill development projects in their respective fields.

Criticisms / Challenges

There is no standard definition of skill in India. Hence, there is no way to measure whether the skill is imparted or not.
The availability of good quality teachers to impart skills is not adequate.
The industry does not value the certificates that these programs give.
The curriculum is not updated at the regular interval.
There is duplication of efforts in these schemes. Instead of many schemes, there should be one universal scheme.
There is a need for constant up-gradation of skills. These programs don’t recognise this.