The Economic Survey 2025-26 stated that initiatives such as early vocational training, increased industry involvement, outcome-focused funding, the growth of apprenticeship programs, and digital monitoring systems will assist India's skill development framework in adapting to the changing labor market needs and achieving the Viksit Bharat vision by 2047.
According to the survey, India's workforce, which exceeds 560 million, is a significant asset. However, enhancing its quality is equally crucial, as economic progress depends on both the workforce's size and skills. The survey further emphasizes that providing vocational education opportunities at all levels is essential for bolstering the skill ecosystem and achieving the vision of Viksit Bharat.
Highlighting that just 0.97% of teenagers aged 14 to 18 have undergone formal skill training, while almost 92% have not, the survey advocates for integrating structured skill development programs in secondary education (Grades 9 to 12). It suggests that introducing market-relevant skills early can enhance employability, decrease dropout rates, and transform India's demographic potential into valuable human resources.
The Central Board of Secondary Education (CBSE) provides skill and vocational training from Class 6 to Class 12, with the goal of furnishing students with practical skills relevant to various industries. It includes short 12-hour skill modules using the 'Kaushal Bodh' books from the National Council of Educational Research and Training (NCERT) for Classes 6 to 8. At the secondary (Classes 9 to 10) and senior secondary (Classes 11 to 12) levels, students have the option to select skill subjects as electives.
The survey points out ongoing discrepancies between youth training and employability, noting that 'local skilling is insufficiently aligned with industry requirements.' It also highlights that 'poor quality in technical and vocational education and training (TVET)' and a lack of practical experience frequently lead to certified individuals not meeting employer standards.
The survey suggests that the assessment of skill development initiatives should shift from 'compliance-based metrics like enrolments and certifications' to concentrating on 'whether these programs create lasting value in the labor market regarding employability, income, and job stability.'
To tackle these issues, the survey advocates for a transition from supply-focused to industry-focused skill development, involving industry participation in training, apprenticeships, and evaluations. It highlights the importance of apprenticeships, suggesting they should extend into modern and gig economy sectors like green manufacturing, logistics, and digital services to satisfy new industry needs. The survey recommends unified management of apprenticeship programs, enhanced district-level engagement, and increased incentives for MSMEs (micro, small, and medium enterprises) to boost involvement.
The survey underscores reforms at the institutional level to update Industrial Training Institutes (ITIs), incorporating smart classrooms, advanced laboratories, digital resources, and courses aligned with industry needs. These initiatives are designed to transform ITIs into contemporary, industry-connected institutions that provide high-quality, demand-oriented vocational education.
Regarding financing, the survey suggests transitioning to outcome-based funding models to foster stronger partnerships with employers and provide guidance to trainees.
The survey highlights that digital infrastructure is a crucial facilitator. The combination of the Skill India Digital Hub (SIDH), National Career Service (NCS), and the e-Shram portal (a national database for unorganized workers) has established a strong digital framework. This infrastructure can be utilized for real-time monitoring and evaluation, connecting training records with employment results, employer needs, and individual skill development paths, the survey notes. It will allow for ongoing tracking of trainees and aid in making policy decisions based on evidence, it stated.
The Economic Survey 2025-26 highlights a transition from an input-focused education system to a framework that evaluates 'learning outcomes,' assessing real skills rather than just years of education or course completion. It observes that although enrolment rates have increased across all educational levels, 'learning outcomes are still inconsistent across different regions, social groups, and institutions,' which undermines employability and productivity.
To tackle this issue, the survey suggests enhancing the National Achievement Survey (NAS), which evaluates the learning skills of students in grades 3, 5, 8, and 10, and implementing a 'PISA-like competency-based assessment at the end of Class 10' to set a standard for student learning. Developed by the Paris-based Organisation for Economic Co-operation and Development (OECD), the Programme for International Student Assessment (PISA) assesses the capability of 15-year-olds to apply their reading, mathematics, and science knowledge and skills to address real-world problems.
The survey also suggests implementing a ranking system for schools similar to the National Institutional Ranking Framework (NIRF) to encourage transparency, accountability, and performance-based enhancements.
The framework for learning outcomes emphasizes establishing quantifiable standards for literacy, numeracy, digital proficiency, problem-solving, communication, and job-related skills. According to the survey, 'assessment systems need to advance to encompass cognitive, technical, and behavioral skills,' which includes ongoing evaluation, hands-on testing, and assessments conducted in the workplace, while ensuring that curriculum design aligns with industry standards for relevance.