Economic survey: India to boost skilling, vocational training for Viksit Bharat 2047

The Economic Survey 2025-26 urges reforms in India's skilling ecosystem, emphasizing vocational education, industry collaboration, and digital monitoring to enhance employability.

New Delhi: Early vocational education, stronger industry participation, outcome-based financing, expansion of apprenticeships, and digitally enabled monitoring systems are among the interventions that will help India’s skilling ecosystem meet the evolving demands of the labour market and realise the vision of Viksit Bharat by 2047, Economic Survey 2025-26 said.

(Representative photo)

The survey says that while the size of India’s workforce, over 560 million, is itself a strength, “it is equally important to improve its quality, as economic growth relies on both the size and capabilities of its labour force.” It adds that “opportunities for vocational education at all levels are vital for strengthening the skill ecosystem and realising the Viksit Bharat’s vision.”

Flagging that only 0.97% of 14-18-year-olds have received institutional skilling, while nearly 92% have had none, the survey calls for embedding structured skilling pathways in secondary schools (Classes 9 to 12). It says early exposure to market-relevant skills can boost employability, reduce dropouts, and help convert India’s demographic advantage into productive human capital.

The Central Board of Secondary Education (CBSE) offers skill and vocational education from Class 6 to Class 12, aiming to equip students with practical, industry-relevant skills. It offers short-duration (12-hour) skill modules through National Council of Educational Research and Training (NCERT)’s ‘Kaushal Bodh’ books in Classes 6 to 8. Students can choose skill subjects as electives in secondary (9 to 10) and senior secondary (11 to 12) levels.

Highlighting persistent gaps between training and employability of youths, the survey says that “local skilling remains inadequately aligned with industry needs”, while “weak technical and vocational education and training (TVET) quality” and limited practical exposure often result in certified candidates failing to meet employer expectations.

The survey states that evaluation of skilling initiatives must move “beyond compliance-based metrics such as enrolments and certifications” and instead focus on “whether skilling programmes generate sustained labour-market value in terms of employability, earnings, and job retention.”

To address these challenges, the survey calls for a shift from supply-driven to industry-driven skilling with industry involvement in training, apprenticeships and assessments. The survey also lays strong emphasis on apprenticeships. “Apprenticeship opportunities should expand into new-age and gig economy sectors, including green manufacturing, logistics, and digital services, to meet emerging industry demands,” the survey says while recommending unified governance of apprenticeship schemes, stronger district-level outreach, and greater incentives for MSMEs (micro, small and medium enterprises) to increase participation.

At the institutional level, the survey highlights reforms to modernise Industrial Training Institutes (ITIs), including smart classrooms, modern labs, digital content, and industry-aligned courses. These measures aim to “reposition ITIs as modern, industry-integrated institutions that deliver high-quality, demand-driven vocational training.”

On financing, the survey proposes moving towards outcome-based funding models to encourage closer employer partnerships and counselling of trainees.

According to the survey, digital infrastructure is another critical enabler. The integration of Skill India Digital Hub (SIDH), National Career Service (NCS) and the e-Shram portal (national database of unorganised workers) has created “a robust digital infrastructure that can be leveraged for real-time monitoring and assessment, linking training records with employment outcomes, employer demand, and individual skilling trajectories,” the survey explains. This will enable continuous tracking of trainees and support evidence-based policy decisions, it said.

Economic Survey 2025-26 emphasises a shift from input-based education to a “learning outcome” assessment framework that measures actual competencies instead of years of schooling or course completion. It notes that despite improved enrolment at all levels of schooling, “learning outcomes remain uneven across regions, social groups, and institutions,” weakening employability and productivity.

To address this, the survey calls for strengthening the National Achievement Survey (NAS) which assesses the learning competencies of students in grades 3, 5, 8, and 10, and introducing “a PISA-like competency-based assessment at the end of Class 10” to benchmark student learning. Created by Paris-based Organisation for Economic Co-operation and Development (OECD), the Programme for International Student Assessment (PISA) measures 15-year-olds’ ability to use reading, mathematics and science knowledge and skills to meet real-life challenges.

The survey also proposes “a NIRF-like ranking system for schools,” on the lines of the National Institutional Ranking Framework (NIRF), to promote transparency, accountability, and performance-driven improvement.

The learning outcome framework focuses on setting measurable benchmarks for literacy, numeracy, digital skills, problem-solving, communication, and job-specific competencies. The survey says that “assessment systems must evolve to capture cognitive, technical, and behavioural skills,” including continuous evaluation, practical testing, and workplace-based assessments, while aligning curriculum design with industry standards to ensure relevance.