Upskilling India: The national policy on skill development and entrepreneurship

Introduction

In its 2024 annual budget presentation, India’s right wing BJP led government emphasized a concentrated effort in shaping public policy to achieve a ‘Vikshit Bharat’ (Developed India) by 2047. It aims to primarily achieve this by bolstering its flagship skilling and capability enhancement initiatives. Betting on India’s youth being a significant driver of the economy, the government is attempting to emphasize skill development to address the needs of and prepare a growing population to become ‘Atmanirbhar’ or ‘self-reliant.’ In 2015, as a part of the Skill India Mission, the government of India launched The National Policy for Skill Development and Entrepreneurship (NPSDE), intending to meet the challenge of skilling India at scale with “speed, standard, and sustainability” (Ministry of Skill Development and Entrepreneurship, 2015, p.3). In its attempt to supersede the policy established by the previous congress-led government, which aimed to train 150 million people by 2022, the government sought to re-launch the initiative by setting a lofty target of training 500 million people by 2022—a target which they quickly sought to de-link themselves from (Nanda, 2017).

Recognizing India’s sizeable demographic dividend, the policy was established to empower and skill India’s growing labour force – an estimated 62% of its population. Despite this significant proportion of the population belonging to the labour force, the government was concerned with the fact that only a fraction of that population – 4.69%, had ‘formal’ vocational skills and had undergone training, as opposed to 52% in the USA, 68% in the UK, 75% in Germany, 80% in Japan, and 96% in South Korea (Ministry of Skill Development and Entrepreneurship, 2015). According to several projections, India’s labour force is expected to increase by 32% by 2035 (Ministry of Skill Development and Entrepreneurship, 2015). Such a large population of ‘unskilled’ labour force was, thus, seen as a significant and formidable challenge India had to overcome.

Central to the NPSDE is an acknowledgment that promoting entrepreneurship is integral to a successful skills strategy. Thus, it set out with the vision to “create an ecosystem of empowerment by skilling on a large scale at speed with high standards and to promote a culture of innovation based entrepreneurship which can generate wealth and employment to ensure sustainable livelihoods for all citizens in the country” (Ministry of Skill Development and Entrepreneurship, 2015, p.11). The policy has two main objectives: (a) empower the individual, enabling them to realize their full potential through lifelong learning, where competencies are accumulated via ‘credible’ instruments, and (b) coordinate and strengthen factors essential for growth and entrepreneurship across the country.

The policy has two main components – a skill component and an entrepreneurship component. The skill component of the policy aims to target critical challenges within the skill domain, such as low aspiration levels, poor integration with formal education, insufficient emphasis on outcomes, and the quality of training infrastructure and instructors. Its goals include aligning skill supply with demand, addressing current skill gaps, fostering industry involvement, implementing a quality assurance framework, harnessing technology, and advancing apprenticeship programs to address these challenges effectively. The policy also seeks to enhance equitable access to skill development opportunities for women and other socially and geographically marginalized groups. On the other hand, the entrepreneurship component of the policy aims to cultivate an entrepreneurial culture by advocating for and integrating entrepreneurship education into formal and skill-based education systems. It seeks to bolster support for entrepreneurs by facilitating access to credit, establishing market linkages, and nurturing innovation-driven and social enterprises. In particular, the policy proposes measures to encourage entrepreneurship among women and address specific entrepreneurial requirements of socially and geographically marginalized and disadvantaged groups (Ministry of Skill Development and Entrepreneurship, 2016).

The policy, a pivotal tool in implementing the Skill India Mission, laid the framework for establishing actionable steps to build the necessary infrastructure. The government decided to utilize a ‘mission mode’ approach to meet the policy’s objectives and subsequently launched the National Skill Development Mission to achieve the goals delineated in the policy and contains sub-missions of institutional training, building infrastructure, facilitating convergence of skill development efforts, improving quality of trainers, facilitating oversees employment, emphasizing sustainable livelihoods, and leveraging existing public infrastructure. The institutional mechanisms for achieving the objectives of the Mission were divided into a three-tier structure at the Centre to steer, drive, and execute the Mission’s objectives.

At the apex level, there was a Governing Council, a Steering Committee, and a Mission Directorate, supported by an Executive Committee as the executive arm of the Mission. At the State level, States were encouraged to establish State Skill Development Missions (SSDM) similar to the National Skill Development Mission, each with its own Steering Committee and Mission Directorate. District Committees operated at the functional tier to support these State-level efforts. The Mission Directorate was supported by three other institutions: the National Skill Development Agency (NSDA), the National Skill Development Corporation (NSDC), and the Directorate General of Training (DGT). These institutions had horizontal and vertical linkages with the Mission Directorate to facilitate the smooth functioning of the national institutional mechanism. Further, to ensure that all stakeholders work in accordance with the needs of the industry, the government set up Sector Skill Councils (SSCs), which are industry-led and industry-governed bodies responsible for identifying industry requirements, accrediting, and certifying qualified trainees.

Policy outcomes and implications

The NPSDE had been designed to be an outcome-oriented policy, requiring regular monitoring and evaluation of initiatives through a Policy Implementation Unit (PIU). In 2015, India needed to skill a million people a week to meet targets, costing roughly Rs 30,000 per person (Punj, 2015). While the policy set out with an ambitious target of skilling 500 million people by 2022, a target widely regarded as unrealistic, by 2017, official data showed that only 11.7 million people were trained between 2015-17, a clear indication that policy targets were not being met (Srivas, 2018) causing the government to adjust its projections.

The Ministry of Skill Development and Entrepreneurship launched its flagship scheme, the Pradhan Mantri Kaushal Vikas Yojana (PMKY), aiming to capitalize on the demographic dividend and equip India’s youth with industry-relevant skills that would help facilitate upward economic mobility. By 2024, the government reported that the Skill India mission had successfully trained 14 million youth and upskilling and re-skilling 540,000 youth (Government of India, 2024), a mere 3.5% of its initial target. In the 2024 budget, the scheme was granted a budget of 2686 crores (313 million Dollars).

In 2017, two years after the policy was launched, a Committee for Rationalisation and Optimisation of the Functioning of the Sector Skill Councils was set up to evaluate SSCs, a crucial component of the Skill India Mission. The report by India Committee for Rationalization and Optimization of the Functioning of the Sector Skills Councils (2016) made several significant observations. Firstly, the 2015 policy removed the labour market information system (LMIS), an essential tool that helped assist in the planning and delivery of training activities—this impaired SSCs from reporting real-time data and demand for skills. Secondly, while the policy listed specific ministries as high importance due to their capacity to generate employment, such as commerce and industry, textiles, and tourism, they have not been assigned skill development tasks. The ministries that do uptake skilling tasks often cannot meet skilling requirements at a competitive standard because they lack the required infrastructure and qualified trainers. While the SSCs have engaged numerous assessing bodies, the proficiency of assessors remains notably inadequate. Many assessors possess only diplomas or degrees lacking practical industry experience. SSCs, driven primarily by revenue considerations, have sought to conduct a high volume of assessments and certifications, often overlooking the critical criteria of competence acquisition and assessment quality. Consequently, sectoral industries are reluctant to employ certified trainees under such conditions.

The NPSDE emphasizes these training programs to foster entrepreneurship among rural India’s youth and marginalized groups and address their unemployment challenges, paying particular emphasis to rural women. While the policy was designed to promote gender mainstreaming in skill development and articulated the importance of gender inclusivity, its implementation unfortunately fell short of achieving it. The policy delineated the inclusion of marginalized groups and the promotion of women’s skilling as pivotal tenants. Yet, it is not grounded in reality because it is isolated from the vagaries of prevailing social norms. Skilling women in India presents a significant challenge due to several factors.

A high percentage of India’s female workforce participates in the informal economy, which is rife with gender discrimination, wage imparity, and job insecurity (Boeri, 2018; Paula, 2002). While skill training endeavours aim to help women become entrepreneurs and move into the formal economy, they often reinforce traditional gender roles by boosting stereotypical skill programs for women, such as cosmetology. Further, while the programs under the Skill India mission have little success in securing employability for the trainees overall (Nanda, 2021), they find it challenging to find placement for women trainees and retain them in their jobs (Pande, 2017). Women face remarkable societal barriers that hinder entrepreneurial pursuits and financial independence (Khandelwal & Sehgal, 2018; Sen, 1993; Subramaniam, 2011) not limited to social norms and biases, access to tools for development such as education, safe connectivity, and social and legal protection. The policy does not accommodate for gender disparity, discrimination, or societal barriers that women and other marginalized individuals may face which may hinder their participation and post-intervention success.

Given the current limitations of the National Policy on Skill Development and Entrepreneurship, we propose the following recommendations that may be relevant to the upcoming policy review.

Actionable recommendations

The policy emphasizes the need to “create an ecosystem of empowerment by skilling on a large scale at speed with high standards and to promote a culture of innovation-based entrepreneurship which can generate wealth and employment to ensure sustainable livelihoods for all citizens in the country” (Ministry of Skill Development and Entrepreneurship, 2015, p.11). Yet, it has failed to consider the ground realities of India, which have resulted in limited impact. Despite these attempts at skilling, the International Labor Organization (2024) reports that youth unemployment rates in India are higher than the global average, with the unemployment rate of youths with graduate degrees (29.1%) being nine times higher than youths who are illiterate (3.4%). These statistics are worse for young graduate women.

Primarily, we suggest that as the ministry aims to create an ‘ecosystem of empowerment,’ taking on an entrepreneurial ecosystem approach (Acs et al., 2014, 2018) may help provide relevant insights into how best to design policy to ensure sustainable, ground-up impact. Creating an environment conducive to productive entrepreneurial pursuits requires carefully considering the complex interactions at various ecosystem levels (Acs et al., 2023). Dedicated efforts to enhance multipolar coordination between stakeholders are essential for ecosystem operations’ smooth governance (Motoyama & Knowlton, 2016). Therefore, policy interventions that aim to develop supportive ecosystems must focus on how the entire ecosystem functions to support new trainees and entrepreneurs.

Further, in agreement with Gooptu (2018), we think it imperative that the policy drafters explicitly define what they mean by ‘skill’ and ‘skilling’ as the concept of skill is socially constructed and carries a heavy connotation of value – assigned for both the job and the worker through socio-politically driven mechanisms and institutions (Gooptu, 2018). The neo-liberalization of skilling reduces individuals to the skills they can provide, which places an additional burden of self-improvement onto the individual (Urciuoli, 2008). While in tune with the government’s agenda of building a self-reliant India, this fails to account for generational societal and cultural barriers faced by marginalized individuals. Periods of skill-intensive training and subsequent development in India has led to ‘exclusive growth’, ensuring that skilling leads to labour that benefits the rich (Ghose, 2023).

Further, we think there is a need to design training initiatives with an empowerment lens. Drawing on Kabeer (1999), women’s skilling activities should be designed by considering (a) the level of access to resources women have, (b) the agency that allows them to utilize and benefit from their resources, and (c) track achievements that enable a sound understanding of where the initiatives lack and can improve. We call for a shift in perspective from considering entrepreneurial skilling activities as merely a way to gain income to a way to bring about significant social change and emancipation (Branzei, 2012; Calas et al., 2009; Rindova et al., 2009).

Conclusion

The National Policy for Skill Development aims to address the country’s substantial skilling needs and foster a culture of self-reliant development and entrepreneurship. The policy underscores the importance of utilizing India’s demographic dividend through robust skill development and entrepreneurial endeavours. However, its implementation has revealed significant challenges which have led to inadequate progress towards meeting policy targets.

In 2024, data indicate that only a fraction of the projected number of individuals have received training, further illustrating the policy’s struggle to meet its lofty goals. Key issues include the ineffective functioning of SSCs, inadequate infrastructure, insufficiently skilled trainers, and an overall lack of alignment between training outcomes and industry needs. The jobs that are the focus of training are scarce, and trainees do not receive adequate training for the jobs in demand. Additionally, the policy’s focus on skilling does not fully address the socio-economic barriers faced by marginalized groups, particularly women, whose participation and post-training success have been constrained by entrenched gender biases and socio-cultural norms.

The policy’s shortcomings highlight the necessity for re-evaluating its approach to skilling and entrepreneurship. We recommend that future revisions of the policy consider adopting an entrepreneurial ecosystem approach to focus on developing India’s entrepreneurial ecosystem as a whole, and enhance the coordination and effectiveness of skill development initiatives. This approach emphasizes the need for a supportive environment that nurtures entrepreneurial activities and addresses the systemic barriers individuals face. Furthermore, a more nuanced understanding of what constitutes ‘skill’ and ‘skilling’ is essential, recognizing the socio-political dimensions of skill valuation and ensuring that skilling initiatives contribute to equitable growth and social change.

In summary, while the NPSDE represents a commendable effort towards achieving a developed India, its current trajectory reveals critical gaps that must be addressed. By focusing on systemic improvements and adopting a more inclusive and realistic approach, future policies can better support India’s aspiration to leverage its demographic potential for sustainable economic growth and social advancement. 

Ethics and consent

Ethical approval and Consent were not required.