Despite years of public spending on skilling schemes, India continues to struggle with converting training programmes into stable jobs, noted the Economic Survey 2025-26.
The annual survey, presented ahead of the Union budget, flagged low job retention and limited wage growth among trainees, pointing to a persistent gap between skilling efforts and labour-market outcomes. “The central challenge in India’s skilling landscape is not the absence of training effort but the weak translation of training into durable labour-market value,” it said.
The survey noted that the skilling policy has focused more on scale than on results.
Enrolments and certifications have taken priority over whether trainees secure stable employment or see sustained income gains. “There is a need to shift the focus from outputs, such as the number of programmes and enrolments, towards outcomes in terms of employability, improved earnings, and job quality.”
The statement comes as the government sharpens its focus on improving job quality and raising labour force participation, even as the country’s workforce has crossed 560 million, according to the survey.
While headline labour indicators show rising participation and falling unemployment, the survey argued that skilling efforts must translate into stable jobs and higher earnings to have a real economic impact.
Calling for a reset, the survey recommended linking public funding and incentives to placement quality and job retention rather than training volumes. “The first step is to re-anchor incentives around outcomes and retention.”
Focus on outcomes
It suggested tying funding, contracts, and empanelment of training providers to verified employment outcomes, including six- and 12-month retention and evidence of earnings growth. “If contracts and empanelment hinge on verified employment starts, six- and 12-month retention, and evidence of earnings uplift relative to the baseline, the system begins to reorganize itself around placement quality.”
The survey also flagged weak employer participation as a key structural gap, arguing that skilling programmes work best when employers are involved in curriculum design, assessments and on-the-job training. “Employer linkage should be treated as a core design feature rather than an add-on.”
At the same time, it cautioned against viewing degree upgrades as a shortcut to employability. “A prudent approach is to view the degree upgrade as a complementary instrument, not a substitute for outcome-oriented reform.”
The survey also argued that skilling success should be judged by post-training outcomes. “The test of success should remain the same: Higher and more sustained employment, better match quality, and measurable earnings trajectories for graduates.”
But not everyone agrees that skilling outcomes should be judged mainly through job placements.
Ronnie Screwvala, chairperson and co-founder of edtech upGrad, said linking skilling too narrowly to employment risks missing the larger purpose of training. “I think it’s sad if we keep linking skills directly to job opportunities,” he said, adding that skilling is “almost a necessity on a standalone basis”.
Screwvala said a jobs-only lens also ignores the rise of self-employment, particularly in rural India. “Today, many of them need the skills to start their own small business,” he said, pointing out that such outcomes are not captured in traditional placement metrics.
He also cautioned against making government funding contingent solely on jobs. “If you’re saying that my KPI for releasing the next round of funds is based on jobs, it’s a little bit of a harsh one,” he said. Without upfront skilling, future job creation itself gets constrained, he added.