Empowering India’s Youth Through Data-Driven Skill Development
By Amit Kapoor and Atul Tiwari
India is currently endowed with a favourable demographic profile characterized by a youth population. The ongoing discourse regarding skills in India has predominantly focused on the availability of employment opportunities or the inadequacy of skills. However, India faces a dual challenge in harnessing its maximum potential due to the nuanced issue of the incongruence between the skills possessed by the workers and the skillset required for a particular occupation demanded by employers. This calls for a forward-looking pivot in policy decisions grounded in the most updated and reflective data.
The Economic Survey 2023-24 states a need to generate around 78.5 lakh non-farm jobs annually until 2030. While macro indicators like the Labour Force Participation Rate and unemployment rates have shown improvements, the quality and availability of employment remain areas of concern. The rise in employment must be accompanied by a deeper effort to ensure people are not just employed but employed in roles aligned with their educational qualifications and skill potential.
A recent report by the Institute for Competitiveness, Skills for the Future: Transforming India’s Workforce Landscape, conducts a detailed analysis of the current skill landscape. The report employs the unit-level data from the Periodic Labour Force Survey (PLFS), classifying occupations based on the National Classification of Occupations (NCO) and corresponding educational requirements, and assesses the distribution of educational qualifications across different occupational skill categories.
Ideally, a worker’s education level should correspond to the job’s skill level. However, this analysis reveals a concerning disconnect: the skills acquired through education and training often do not match the skill levels required in jobs. Only 8.25% of individuals with a graduate-level education are employed in occupations of a corresponding skill level. Over 50% workers with a graduate education are working in jobs meant for lower skill levels, like clerks, shopkeepers, plant operators, and the like. This is not just an isolated data point but a widespread and unfortunately common phenomenon, with newspaper articles frequently highlighting PhD holders, postgraduates, and graduates applying for peon, security, or sanitation jobs. These examples illustrate a broader trend of overqualification and underutilization, where individuals struggle to convert their educational achievements into suitable employment. This mismatch reduces economic productivity, labor force participation, social mobility, policy effectiveness, and global competitiveness, making it imperative to address. From a policy standpoint, addressing the mismatch is essential for designing responsive education and employment strategies. Understanding the causes, roots, and aspects of skill mismatch enables training and skilling efforts to align with labour market demands, ensuring that skilling programs lead to improved employability.
One of the primary reasons India faces this recurring challenge of incongruence between acquired and required skills is the lack of comprehensive, disaggregated data. Current surveys like the PLFS, though thorough in their approach and collecting valuable information on employment and education, do not fully account for the complexity of occupational demands, sectoral transitions, or evolving job roles within the services and technology sectors.
The current PLFS framework does not consider experience, which is one of the three fundamental pillars of the International Standard Classification of Occupations (ISCO) skill definition. Furthermore, the National Classification of Occupations (NCO) is presented at a relatively aggregated three-digit level, which limits its granularity and specificity.
As a consequence, most empirical work in India uses education level as a proxy for skills, which often leads to misleading conclusions. The report states a pressing need for direct, detailed, and regular data on vocational training, skill acquisition, and labour market outcomes to address the mismatch. In coordination with skilling agencies, the Ministry of Statistics and Programme Implementation (MoSPI) must institutionalize a dedicated system for skill data collection. This should include data collection across different population groups, regions, and sectors to support evidence-based policymaking. Such a dataset would allow for forecasting emerging skill needs, identifying persistent vacancies, and curriculum updates that are better aligned with industry expectations.
Beyond data collection, the report recommends a comprehensive, periodic, coordinated Skill Gap Survey led by Sector Skill Councils and State Skill Missions. This survey must go beyond conventional indicators and adopt a dual-respondent model to capture detailed information on skilling trends, including the types of courses pursued by individuals, the nature of upskilling activities, and their alignment with employment outcomes. It should systematically map job vacancies by sector and region and assess whether job seekers’ qualifications and demographics align with the demand. Critically, it should examine whether students opt for emerging roles linked to future growth or are still focused on conventional pathways disconnected from regional industry trends. This kind of granular data can unlock more targeted interventions, such as sector-specific, regionally aligned training programs, and career counselling services that reflect the current opportunities in the market.
In this defining phase of India’s skill journey, it is crucial to decisive steps towards informed, targeted, data-driven policy decisions that equip the workforce with skills leading to commensurate and meaningful employment. The first indispensable step is understanding the root causes and nature of the mismatch between education, training, and labour market demand. Conducting thorough skill data collection and Skill Gap Survey, thus becomes a foundational imperative. As the Indian economy evolves through demographic, digital, and technological challenges, this data can offer policymakers the diagnostic tools required to bridge the gap between education, training, and employment.
The article was published with Hindu Business Line on July 30, 2025.
