A recent report by NITI Aayog, titled ‘Reimagining Skilling for Viksit Bharat,’ has brought to light a significant disconnect between India's higher education system and the demands of its labor market. The government think tank's findings indicate that a mere 8.25% of graduates are employed in roles that directly match their academic qualifications.
The report, released on Saturday and citing data from the Economic Survey 2024-25, also flagged alarmingly high unemployment rates among educated youth. Graduate unemployment stands at 13%, with a stark 20.4% among graduate women, figures considerably higher than the national average of 3.2%.
Generic Degrees Dominate, Employability Lags
NITI Aayog pointed out the overwhelming enrollment in traditional undergraduate courses. Out of 3.4 crore students in undergraduate programs, 1.13 crore pursue a B.A. degree alone. Combined, B.A., B.Sc., and B.Com. account for over 2 crore students, often leading to degrees with weak links to specific job requirements.
To address this, the report recommends a fundamental redesign of these courses around industry needs. Suggestions include introducing applied specializations such as B.A. Hospitality, B.Sc. Applied Technology, and B.Com. Analytics. Furthermore, scaling up Apprenticeship Embedded Degree Programmes (AEDP) and Work-Integrated Degree Programmes (WIDP) is advised to provide students with crucial workplace exposure during their studies.
The Financial Incentive for Skilling
The financial benefits of additional skilling are substantial. Citing the Boston Consulting Group’s Higher Education Survey, the NITI Aayog report indicates that a generic undergraduate with no extra skilling earns an average starting salary of Rs 22,000 per month. However, a graduate who also undergoes skilling sees this average rise to Rs 29,000 per month. This Rs 7,000 monthly difference can compound into a total income gap of Rs 9.7 lakh over a decade, underscoring the long-term economic impact of acquiring relevant skills.
Overcoming Social Stigma and Information Gaps
Social attitudes pose a significant barrier to skilling. Vocational education, Industrial Training Institutes (ITIs), and diploma courses are frequently perceived as 'second-tier' options by students, parents, and peers. Career choices are often driven by exam scores, family preferences, and perceived costs rather than aptitude, interests, or long-term career opportunities. A lack of awareness about available courses and training programs further exacerbates the problem.
The report also notes that approximately 47% of women and 43% of youth are classified as NEETs (Not in Education, Employment, or Training), with a significant portion citing lack of awareness about suitable programs as a reason for not pursuing skilling.
Towards Demand-Driven Skilling and Industry Partnerships
NITI Aayog advocates for a shift in skilling programs from merely measuring enrollment and completion to focusing on tangible outcomes like placements, income, and career progression. The think tank recommends moving towards demand-driven, industry-backed initiatives, expanding general employability, and fostering entrepreneurship training that includes digital and financial literacy.
Key recommendations include:
- Targeted reskilling for workers in sectors facing technological disruption.
- Increased focus on high-growth areas like green industries and electric vehicles.
- Establishing greenfield public-private partnership (PPP) skilling universities and hubs.
- Reforming existing colleges through industry partnerships to co-design academic tracks.
- Granting greater academic and administrative autonomy to ITIs to update courses and manage resources based on local demand.
The overarching goal is to transform India's skilling system into one that is closely aligned with industry demand, employment outcomes, and evolving job opportunities, paving the way for a more skilled and employable workforce.