India faces rising challenges in demand-driven growth due to a volatile external sector. On August 15, the Prime Minister announced key reforms aimed at boosting domestic consumption and investment. Central to this vision is overhauling the Vocational Education and Training (VET) system to enhance labour productivity and employability. Current VET uptake and employment outcomes remain low despite extensive infrastructure. This calls for systemic reforms inspired by global best practices.
Current State of Vocational Education and Training in India
India’s VET system includes over 14,000 Industrial Training Institutes (ITIs) with 25 lakh sanctioned seats. However, enrolment stood at only 12 lakh in 2022, indicating 48% seat utilisation. Employment rates for ITI graduates were 63% in 2018, much lower than countries like Germany and Singapore where rates range from 80 to 90%. Only 4% of India’s workforce is formally trained, revealing a gap between infrastructure and outcomes.
Challenges in Uptake and Employment Outcomes
The late integration of VET in the education system weakens its impact. Unlike India, countries such as Germany introduce VET at the upper secondary level through dual systems combining education and apprenticeships. India offers VET only after high school, limiting hands-on training time. There is no formal academic progression from VET to higher education, discouraging students who want to keep academic options open. Poor perception and outdated curricula further reduce attractiveness.
Quality and Industry Linkages
India’s VET quality suffers from vacant instructor posts and weak monitoring. Over one-third of ITI instructor positions remain unfilled due to limited training capacity. Curriculum design is not aligned with industry needs. Public-private partnerships are minimal, unlike in Germany and Singapore where employers co-fund training and help design courses. MSMEs, which drive local jobs, have limited engagement with ITIs. Sector Skill Councils lack presence at the state level.
Lessons from International Models
Countries with strong VET systems integrate vocational training early in schooling and provide clear academic pathways. Singapore’s Skill Future Programme subsidises lifelong learning. Germany combines school education with paid apprenticeships. These countries involve employers extensively in curriculum design and funding. India needs to adopt similar models to increase relevance and quality.
Policy Recommendations for India
India should integrate VET into early education as recommended by the National Education Policy 2020. Fast-tracking the National Credit Framework will enable credit transfers and academic progression. Expanding National Skill Training Institutes and filling instructor vacancies is crucial. Strengthening ITI grading with trainee feedback will improve quality. Public-private partnerships must be scaled, involving MSMEs and CSR funds. Public spending on VET should increase beyond the current 3% of education expenditure and link funding to institutional performance and autonomy.
Recent Government Initiatives
Schemes like the Employment Linked Incentive (ELI), PM Internship Scheme, and ITI Upgradation Initiative focus on employment outcomes. ELI incentivises formal job creation but lacks skilling components. The PM Internship Scheme offers placements without guaranteed jobs. ITI Upgradation targets infrastructure modernisation but not training quality. These efforts need to be complemented by systemic reforms for lasting impact.
Human Capital Investment Imperative
India’s low investment in VET contrasts with countries allocating 10-13% of education budgets to vocational training. Optimising funding through improved efficiency and institutional autonomy will enhance financial viability. Transforming vocational education into a credible pathway to employment is key to building a skilled workforce for a developed India.
Questions for UPSC:
- Critically discuss the role of vocational education and training in enhancing employability and economic growth in developing countries.
- Analyse the impact of public-private partnerships in skill development programmes with examples from India and abroad.
- Examine the challenges faced by the Indian education system in integrating vocational training; how can the National Education Policy 2020 address these challenges?
- With suitable examples, discuss how early integration of vocational education can influence labour market outcomes and social mobility.
