- India's education system needs reform to link skills with employment outcomes
- NITI Aayog suggests a National Job Skilling Policy and annual skills survey
- Low learning outcomes and high dropout rates harm employability prospects
A recent paper by NITI Aayog highlights the urgent need to reform India's education and skilling system to better prepare its workforce for the future. Titled Education and Skilling for Employment: From Credentials to Learning Outcome and authored by Arvind Virmani, the report aligns with the vision of building a developed India by 2047 under Viksit Bharat. The paper points out that while access to education has improved, many students still lack the practical skills required for jobs, creating a gap between degrees and employability.
To address this, it proposes a National Job Skilling Policy that integrates employment and skill development efforts, introduces an annual skills and employment survey, and aligns training programs with industry needs. It also notes key challenges such as low learning outcomes, high dropout rates, and limited employer-led training in India compared to countries like Vietnam and Malaysia. To fix this, the report recommends incentivizing companies to invest more in employee training, upgrading ITIs and polytechnics, and improving trainer quality, especially for blue-collar roles.
Against this backdrop, industry leaders' perspectives outline what this transformation needs to look like on the ground:
1. Why India must shift from degrees to measurable learning outcomes
According to Prateep Shukla, Co-founder and CEO Masai, India has solved for access. It has not been solved for outcomes. A degree today tells you where someone studied, not what they can do. That is the core gap. The NITI working paper is clear - enrollment has expanded, but learning outcomes have not kept pace. The next phase of India's skilling ecosystem has to be outcome-first. That means defining skills in terms of real capability and evaluating learners on whether they can perform in a job environment. When hiring aligns with demonstrated skill instead of credentials, the system becomes both more efficient and fair - especially for students from Tier 2 and Tier 3 India.
2. How gaps in foundational learning and dropout impact employability
Shukla said employability does not start at the job stage - it starts with foundations. If a learner exits early or builds on weak literacy and numeracy, every layer above that becomes fragile. That is why dropout and foundational gaps are not just education issues - they are long-term economic issues.
3. Need for stronger investment in training the trainers
No skilling system can outperform the quality of its trainers. While the paper rightly highlights this in the context of blue-collar and mid-skill roles, the same principle applies across the entire skilling ecosystem. Whether it is a technician, a software developer, or a data analyst, outcomes are ultimately shaped by the quality of instruction and real-world relevance. The focus now has to move from just creating courses to building high-quality trainers - people who are industry-exposed, tool-relevant, and pedagogically strong. If trainer capability does not scale, outcomes will not scale, regardless of the domain.
4. Why alignment between education, skilling, and industry is critical for 2047 goals
India's 2047 ambition will not be limited by capital; it will be limited by talent readiness. Today, the system is fragmented. Education certifies, skilling trains, and industry evaluates - all independently. The result is predictable: employers do not trust credentials, and learners do not get a clear pathway to jobs. Alignment isn't a policy improvement; it's a structural requirement. Industry has to move upstream into curriculum design, not just hiring feedback. Demand signals need to be real-time, not retrospective. Training providers need to be measured by whether learners get placed and perform, not just whether they enroll.
If we keep producing degrees in isolation, we'll keep solving access without solving employability. If we integrate learning with demand - if hiring managers help write curricula, if job architecture informs what gets taught in month one instead of being discovered in month six - we can build a workforce that is actually ready for the scale India is aiming for. But as long as education, skilling, and hiring stay on separate tracks, we'll keep scaling the wrong thing.
5. Why apprenticeship-led pathways are critical for job-ready talent
For hands-on roles, skill is built by doing, not by studying. In sectors like construction and repair, competence comes from working in real environments. You don't learn to troubleshoot wiring from a manual; you learn by fixing it wrong, then fixing it right under someone who has done it a thousand times.
Apprenticeships work because they combine learning with work from day one. You're productive from week one, and you're learning what actually breaks, not what theoretically could. This principle is now extending beyond trades. Even in tech and modern skilling, the most effective learning happens through real tasks, real codebases, and real client problems - not hypothetical exercises.
To scale this, we need stronger employer participation and a shift in perception, where skill-based careers are seen as high-value paths, not fallback options. For practical roles, apprenticeship is the fastest, most direct way to build job-ready talent at scale.
Response by Dr. Nipun Sharma, CEO, TeamLease Degree Apprenticeship
1. Why India's skilling ecosystem must shift focus from degrees to measurable learning outcomes
India has built one of the largest education systems in the world, yet outcomes remain uneven because credentials do not always translate into capability. Industry estimates report that employability stands at around 56% overall, with nearly 70% for BTech graduates and closer to 40% for ITI candidates, highlighting variation in job readiness across pathways and reflecting a structural gap between education and industry requirements. The system also continues to remain qualification-driven, while industry demand is increasingly skill-driven. The NITI Aayog working paper reinforces the need to move towards learning outcomes and demonstrated capability.
The shift we need is simple but structural - moving from asking "What degree do you hold?" to "What can you do on Day 1?", which requires embedding measurable learning outcomes, workplace-linked assessment, and skill-verified credentials into the system. This can help education translate directly into productivity and employment.
2. How gaps in foundational learning and high dropout rates impact long-term employability
The employability challenge begins much earlier than higher education. While enrolment is high at the primary level, participation declines across secondary and higher secondary stages, leading to a large number of individuals entering the workforce without continuity in learning or formal skilling. Around 30% of students in higher grades still struggle with basic reading, as highlighted by ASER, reflecting persistent gaps in foundational learning. These gaps in literacy, numeracy, and problem-solving reduce trainability and limit the ability to absorb technical skills later. Our data shows that workforce readiness improves significantly when structured learning is combined with workplace exposure, which highlights the importance of strengthening early learning and creating pathways that connect education with employment.
3. The need for stronger investments in training the trainers, especially for blue-collar and mid-skill roles
The quality of skilling outcomes is closely linked to trainer capability. In many cases, trainers lack exposure to current industry practices, which creates a gap between training delivery and actual job requirements, particularly in blue-collar and mid-skill roles. Our data show that only about 10% of India's workforce undergoes formal training, reflecting broader limitations in training capacity and quality and posing a key constraint. Strengthening trainer capability through industry immersion, continuous upskilling and reskilling, and integration with live work environments will be essential to improving the relevance of training, employability, and productivity outcomes.
4. Why better alignment between education, skilling, and industry demand is critical to achieving 2047 workforce goals
India's "Viksit Bharat" and "Aatmanirbhar Bharat" ambitions for 2047 will require a workforce that is both large and job-ready. This depends on how effectively education and skilling systems align with industry demand. Industry estimates indicate employability at around 56%, reflecting a persistent gap between educational outcomes and workplace requirements. Our data highlights the scale of this challenge, with sectors such as manufacturing and engineering alone facing a shortfall of around 29 million skilled workers by 2030. At the same time, nearly 50% of the existing workforce will require reskilling, and over 90 million jobs are expected to be displaced by 2030 due to technological shifts. Bridging this gap requires stronger integration among education, skilling, and industry through work-based learning, faster curriculum alignment, and a direct link between training and employment outcomes, so that workforce growth translates into economic productivity.
Why scaling apprenticeship-led pathways can create job-ready talent and strengthen outcomes in sectors like construction, maintenance, and repair sectors such as construction, maintenance, and repair depend heavily on hands-on skills that are best acquired in real work environments. Apprenticeships provide a direct pathway by combining structured learning with on-the-job experience, allowing individuals to build job-ready capabilities from day one while earning, making participation more accessible and inclusive. This "earn while you learn" model plays an important role in workforce formalisation by bringing individuals into structured employment pathways and enabling sustained socio-economic upliftment.
Our data shows that a large proportion of apprentices transition into formal employment after completing training, with many continuing within the same organisation, reflecting strong alignment with industry demand. Apprenticeship models also deliver measurable business outcomes, including a reduction in hiring costs by up to 50%, a 10-25% improvement in retention, and productivity gains of 20-25%.
Scaling apprenticeship-led pathways can therefore create a reliable talent pipeline, strengthen workforce readiness, drive formalisation, and improve both employment outcomes and long-term economic mobility at scale.
Responses by Avinav Nigam, Co-founder at TERN Group
1. Why India's skilling ecosystem must shift focus from degrees to measurable learning outcomes
The gap isn't what degree someone holds; it is whether they can actually do the job. India's current system optimises for credential accumulation. Students chase degrees, employers filter by degrees, and training institutions optimise for pass rates. But credentials do not always translate into workplace capability. As per the India Skills Report 2025, only 54.81% of graduates are employable. That means 45% of these candidates hold degrees but lack the skills that employers need.
In the healthcare sector, this is clearly visible. A degree from one country does not predict clinical readiness in another country. What matters is this: can this nurse apply clinical reasoning under pressure? Can they communicate effectively with patients? Do they demonstrate patient safety orientation? Credentials tell us what someone studied; learning outcomes tell us what they can do.
The NITI Aayog working paper highlights that 76.6% of Class 3 students cannot read grade-appropriate text. They are progressing through school collecting credentials without foundational competence. By the time they reach workforce age, degrees signal completion, not capability. The shift NITI Aayog proposes is not radical; it is pragmatic - measure what people can do, not what certificates they accumulate.