India, with over 808 million youth below the age of 35, stands at a pivotal juncture, where the gap between its potential and realization, ambition and support, is becoming increasingly evident. Although the nation is set to contribute 25 percent of the global workforce within the next five years, a profound disconnect between education and employability threatens to derail this opportunity. Critical sectors like electronics, which aim to reach a USD 500 billion valuation by 2030, are struggling with a severe shortage of skilled workers. This challenge stems from an education system overly focused on degrees and certifications, with minimal emphasis on practical, skill-based training. As a result, nearly 50 percent of graduates remain unemployed, underscoring the failure to align educational outcomes with industry demands. With 10 million students graduating annually, including 7 million undergraduates, and 12 million individuals entering the workforce each year, the pressure to simultaneously create jobs and ensure employability has reached a critical inflection point.
The Economic Survey 2023-24 underscores the urgency of generating 78.5 lakh non-farm jobs annually until 2030, but systemic shortcomings hinder progress. According to the India Skills Report and the Periodic Labor Force Survey of 2023-24, only 54 percent of Indian youth are deemed employable, and a mere 4.1 percent have received formal training. A significant portion of the working-age population lacks vocational or technical training, with many relying on self-taught skills acquired on the job. Despite a 61 percent increase in the labor force participation rate, 40 percent of youth continue to face employability challenges. Education systems remain skewed toward theoretical learning, leaving graduates ill-prepared for immediate workforce entry. However, government initiatives like the National Apprenticeship Training Scheme (NATS) and the National Education Policy (NEP), which emphasize vocational learning, signal progress. To truly bridge the education-employability gap, both the government and industry must invest in scalable skilling programs, internships, and apprenticeships that prepare youth to meet labor market demands and secure India’s economic growth trajectory.
Role of Skilling Programs in Skilling the Youth
To address the challenges of employability and workforce readiness, innovative solutions like degree apprenticeships and structured internships must play a pivotal role. Degree apprenticeships, which blend academic learning with hands-on training, equip students with practical skills while ensuring they graduate job-ready, effectively bridging the gap between education and industry needs. Similarly, structured internships provide critical workplace exposure, enabling students to develop industry-relevant competencies and adapt to real-world challenges. These models foster stronger industry-academia collaboration, ensuring curricula remain aligned with evolving market demands while reducing recruitment and training costs for employers. Scaling such initiatives, as envisioned in the National Education Policy (NEP) and supported by programs like the National Apprenticeship Training Scheme (NATS), can transform India’s workforce ecosystem. By making skill-building accessible and inclusive, these programs empower youth, including women, who often face barriers to workforce entry, through flexible pathways to employment. With active investment from both the government and private sector, degree apprenticeships and internships can bridge the employability gap, foster innovation, and unlock India’s vast to drive inclusive and sustained economic growth.
For individuals, apprenticeships represent a long-term investment in career growth. Rather than comparing stipends to fixed salaries, the focus should be on acquiring valuable skills that enhance future employability.
A Lucrative Micro-Credit Framework
In addition to the NEP and AEDP, India’s vocational training systems can benefit from the introduction of a micro-credit framework. Similar to credit card points, this framework allows students to accumulate credits for various courses, enabling a modular approach to education. Through the DigiLocker system, students receive an ABC ID, which tracks their accumulated credits. This allows for flexible learning, where students can work, take breaks, and still earn credits toward their degree. This innovative, modular approach, along with initiatives like NAPS, NADS, and the PM Internship Scheme, will be key to enhancing employability and skilling.
To revamp India’s current vocational training and apprenticeship systems, several policy changes are needed. Firstly, a tripartite agreement involving the student, educational institution, and organization should be established to bridge gaps in the current bipartite agreements. Additionally, a clear and well-defined credit framework, along with tax incentives for apprentices, should be implemented to encourage higher stipends and recognize the learning aspect of apprenticeships. Expanding apprenticeship quotas beyond the current cap would allow for more opportunities. The gig worker community, which is rapidly growing, must be integrated into vocational training and apprenticeship programs, ensuring they receive benefits like social security and training. Moreover, consolidating the various apprenticeship portals (NAPS, NATS, PMIS) and improving accessibility to online education, including lab work via virtual modes, would streamline the system. Lastly, elevating the status of non-traditional universities and providing support for MSMEs would further strengthen the workforce. These reforms would create a more inclusive and adaptable workforce, addressing the challenges India faces in today’s labor market.
Leveraging International Capabilities
Countries like Germany, Switzerland, Australia, and the US have adopted several lucrative practices in vocational training and apprenticeships that India can benefit from. Germany’s model of public-private partnerships funds apprenticeships, ensuring equal recognition for both traditional and apprenticeship education, fostering respect for skilled trades. Switzerland relies on contributions to fund their system, ensuring sustainability. Australia’s framework supports MSMEs by offering shared services for apprentice management, alleviating financial burdens on small businesses. Additionally, countries like the US focus on emerging sectors such as green jobs, IT, and healthcare, areas where India could expand its apprenticeship model. Financial incentives, tax breaks, and support loans, like Australia’s Trade Support Loans, encourage more companies to invest in apprenticeships. By adopting these practices, India can build a more inclusive and sustainable apprenticeship ecosystem, align with industry needs, and address challenges like unemployment and skill gaps.
“Corporate leaders must embrace apprenticeship models as a strategic solution to challenges like productivity and attrition. By integrating structured on-the-job learning with formal training, apprenticeships deliver a compelling return on investment - reducing attrition by 30-50% and boosting productivity through hands-on experience. These programs allow companies to build a pipeline of skilled talent while being more cost-effective than hiring directly from the market. Supported by robust government initiatives, apprenticeships offer a transformative approach to building a future-ready workforce while optimizing costs,” highlights Ramesh.
For individuals, apprenticeships represent a long-term investment in career growth. Rather than comparing stipends to fixed salaries, the focus should be on acquiring valuable skills that enhance future employability. Apprenticeships provide structured pathways to skill mastery, offering industry relevance and preparing individuals for sustained career success. By viewing apprenticeships as stepping stones for personal and professional growth, individuals can shape their abilities and build a solid foundation for a successful career spanning decades.
About the Author
A.R.Ramesh, currently serving as the Chief Executive Officer of TeamLease Degree Apprenticeship, is a distinguished speaker, columnist, and a solution-oriented leader with 25+ years experience in growing and managing large scale tech-enabled services businesses. With an expertise in bringing in fresh perspectives to deliver consistent results and achieving turnarounds in highly challenging and mission critical assignments, he has a track record of successfully delivering technology contingent staffing solutions across the globe by developing & driving high-performance teams with a focus on customer-centricity and customer experience. Having held senior leadership roles with Adecco, Wipro and Cognizant Technology Solutions he has worked with top Business & Technology leaders worldwide on topics such as Digital business solutions, Data modernization on the Cloud and Big data-driven insights management. He also has extensive experience leading Large Digital Transformation programs focused on delivery excellence, Practice &; Platform set up for customers and establishing Technology CoE.
