India is facing a challenge in providing opportunities for the youth population to enter the job market (Mehrotra, 2016; Mitra & Verick, 2013; Pilz, 2016). Although employers are searching for qualified employees, they often cannot find them in the Indian labour market (Pilz & Ramasamy, 2022). Not only do the less educated need more skills to enter an employment relationship, but the higher educated also face problems in offering employers the skills they require (Blom & Saeki, 2011; Neeroorkar & Gopinath, 2020). Studies show that only 25 per cent of engineering graduates are considered employable (NASSCOM & McKinsey, 2005). This situation not only causes problems for individual jobseekers but also has far-reaching consequences for the economy. In the last two decades, the Indian economy has grown faster than the pool of well-trained workers (Khare, 2018). There is an economic debate about this mismatch and, thus, the lack of employability in the Indian workforce (Bornali, 2021).

To examine whether the Indian VET system can solve the mismatch problem and address the high rate of youth unemployment, we use the concept of employability. The paper is divided into six sections: Following the introduction, the second section will explain how the mismatch occurs by presenting both the supply side and the demand side of the young workforce. The third section presents the concept of employability, showing what aspects are necessary for young people to enter the labour market. The fourth section highlights the Indian VET system as a supplier of the labour force, with its different levels. The fifth section outlines the challenges of the system, while the sixth includes limitations and scope, discusses possible solutions, and explores implications for the researchers, practitioners, and policymakers.

Mismatch between supply and demand

Supply of labour

In India, young people (aged between 15 and 29 years) comprise 29.1 per cent of the total workforce, making it the youngest workforce globally (NSSO, 2014; UIS, 2021). The situation is often called a ‘demographic dividend’ (Mehrotra, 2014). The country has a core labour force of 433 million; on average, another 6–8 million youths will be entering the labour force every year for the next decade and a half (Ghose, 2016). They are, however, much more likely to be unemployed than older people (Smith et al., 2014). The problem of high unemployment among young people concerns not only the low-skilled or unskilled but also the highly skilled, as reflected in the skills gaps evident between supply and demand in the labour market (Agrawal et al., 2016; Bisht & Pattanaik, 2020; Shrotriya et al., 2018). Since the problem of unemployment affects both highly skilled and low-skilled people, this points to overarching general problems in the Indian system, such as inconsistencies in official statistics, changing education policies, inefficient use of available resources, and neglect of education in rural areas and for women (Agrawal, 2012; Maitra et al., 2022; Venkatram, 2016). Consequently, in some areas more than 60 per cent of all graduates remain unemployed three years after completing their course (Bornali, 2021; NCAER, 2018).

Young people who attain a degree, including equivalent technical and other professional qualifications, experience the highest proportion of unemployment. While people with no or little educational experience have a comparatively low statistical risk of unemployment, it rises sharply with higher educational attainment (see Table 1). There are several reasons for this. A significant factor in the high level of unemployment among the better educated is a lack of practical skills, highlighting the disconnect between the theoretical learning and practical skills being taught at the institutions (Mamgain & Tiwari, 2016). The illiterate and the less-educated face underemployment in the informal sector, and low-productivity jobs (NSSO, 2014; Pilz & Wilmshöfer, 2015). India has a large informal sector, which is difficult to capture statistically: it is estimated that more than 92 per cent of the labour force of 468 million people is employed in unorganized sectors (NCAER, 2018). The Indian National Commission for Enterprises in the Unorganised Sector (NCEUS) defines the sector as follows: ‘The unorganised sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers’. However, due to a lack of statistical data or conceptual clarity and uniformity in the subsectors of the economy, the precise classification of the term is challenging. In contrast to the organized sector, the unorganized sector is characterized by, among other aspects, a low degree of organization, heterogeneous functions, often labour-intensive activities, and the absence of formal contracts (NCEUS, 2007).

Table 1 Unemployment rates (in percentages for persons aged 15 years and above with different educational attainments).
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The general education system is mainly responsible for the entry rates to the labour market. Compared to that, the VET system only plays a minor role in supplying the labour market. In the 15–29 age cohort, only 2 per cent have received formal vocational training, while 8 per cent have received informal vocational training. This figure has only changed slightly in the past few years (Mehrotra et al., 2013; NSSO, 2011, 2014). The current absolute numbers do not adequately represent the importance of the VET system for the future of the Indian educational landscape. The VET system occupies a key role, especially in the context of the shift from an agrarian society to a technological society, with an increasing demand for professionals with intermediate skills. The VET system and polytechnics, in particular, are well suited to train precisely this kind of employee (Maitra et al., 2022; Schneider, 2022, 2023). The shift in employment numbers in the various sectors can be seen in Table 2.

Table 2 Employment trends in India (15–29 years).
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In addition, the VET system is perceived as a central factor in utilizing the demographic dividend (Mehrotra, 2016; Singh & Kumar, 2021).

The following numbers illustrate the quantitative scale of the Indian school system: In 2015–2016, 196.72 million students were educated at elementary level, while a further 39.15 million students were enrolled at secondary level. Some 24.74 million students attended senior secondary education. In comparison, a total of 34.59 million students were enrolled in higher education (diploma, postgraduate, undergraduate, PhD, etc.) (MHRD, 2018). The following section describes the labour market and the existing demand for young workers there.

Demand for labour

The Indian labour market structure is complex and highly segmented. This section aims to provide a general overview of the demand side (Mundle, 2017). Statistical evidence in India shows that the influence of informal employment in both the organized and unorganized sectors of the Indian economy remains strong and is even increasing (NSO, 2019; NSSO, 2014). In particular, the expansion of informal employment in the organized sector is evident and illustrates a phenomenon of increasing significance in India (NSO, 2019; NSSO, 2014). The labour market’s institutional structure can be further divided into agriculture, industry, and service sectors; however, the numerical distribution of labour demand in these sectors is subject to strong fluctuations (see Table 2).

The agricultural sector has seen moderate growth since independence. However, despite a substantial increase in agricultural production, there has been a shift in agricultural employment, which fell by 27 million between 2011–2012 and 2017–2018, with workers moving to non-agricultural activities. This shows that a broad shift in the occupational structure of the Indian economy has created a demand for new skill requirements among the emerging workforce in non-agricultural sectors, such as industry, construction, and services (Pilz & Wiemann, 2021; Thomas, 2020). However, India’s VET system needs to be flexible enough to quickly adapt skills training to react to current technological innovations (Maitra et al., 2022). Such economic restructuring, with an inflexible non-adaptive education system, fosters mismatches (Pilz, 2016).

But even today, more than 70 per cent of the Indian population lives in rural areas. The country remains a predominantly agrarian-based society, with a large proportion (48.9 per cent) of the workforce still dependent on the agricultural sector (ILO, 2018). Unequal access to opportunities and education is particularly prevalent in rural areas, fostering skills mismatches. In contrast, demand for a manufacturing or service sector workforce is mainly present in metropolitan areas.

The informal sector in India is vast, contributing about 60 per cent of GDP, with a large proportion (85 per cent) of the non-agricultural workforce working in the informal sector (Mehrotra, 2019). This means that most employees acquire their skills and knowledge in an unregulated area of the economy.

Some analysts, such as Verick (2018), argue that, in developing economies, the classical pattern of economic development is characterized by the movement of resources and workers from agriculture to manufacturing. In the Indian case, however, this has not happened. Rather than increased employment in the manufacturing sector, the country has witnessed expansion in the service sector, in terms of both economic growth and employment (Verick, 2018). Khare (2016) expresses a similar view: the Indian economic transition shifted directly from agriculture to the service sector, which now contributes about 75 per cent of GDP. Clearly, the service sector has very different skill requirements from the agricultural sector.

Table 2 also illustrates that India’s services sector is an essential driver of economic growth, accounting for more than half of the economy’s output; however, it provides a relatively small, though growing, share of employment (Verick, 2018). The National Skill Development Corporation (NSDC) has estimated that 109.7 million skilled people will be required by 2022, of which close to 80 per cent will be in top-ten sectors such as automobile, retail, handloom, telecommunication, and leather (MSDE, 2016b).

The structure of the national economy is changing rapidly. This, in addition to technological change and the significant differences between rural areas and metropolitan regions, helps explain why supply can only respond to demand to a limited extent, resulting in a mismatch. This creates a paradoxical situation for India: high economic growth has created great demand for employment, with good employee opportunities, particularly in jobs for which the VET system can provide candidates, such as those at intermediate level, for example, supervisor or qualified worker on the shop floor. However, at the same time, many potential employees lack the marketable skills that employers require to fill their workforce vacancies (Deka & Batra, 2016; Iyer & Dave, 2015; Mizrahi & Krup, 2022; Singh & Kumar, 2021).

These problems clearly show that mismatch in India operates at various levels. On the one hand, a mismatch exists on the qualitative level, since the level of skills and competencies among employees is not sufficiently developed to meet the requirements of everyday work. On the other hand, it exists also on the quantitative level, since a large number of employees are needed, e.g., in the intermediate skill area, but are not available in this quantity on the market, although many potential employees would be available (International Labour Office, 2014). While supply and demand have now been discussed, the next section presents the concept of employability, which is a potential tool in resolving the mismatch between supply and demand.

The concept of employability in the Indian context

Employability is a complex concept to define, as it can vary in context or emphasis and has different foci depending on its orientation (Kraus & Vonken, 2009). That is why there is no single definition of the term, which has led to different understandings of employability in various countries and contexts (Agrawal et al., 2016; Zenner-Höffkes et al., 2021). This is also reflected in the diverse terminology used to describe specific skill sets, for example, employability skills, key competencies, soft skills, transferable skills, or essential skills (ILO, 2004; McQuaid & Lindsay, 2005). Due to the large variety of aspects concerning employability, only those that are relevant to the Indian context and that are compatible with vocational education are presented below. These aspects, which are essential to the Indian context (subject-specific knowledge, person-centred skills, environment), are presented in detail and provide the structure for the subsequent analysis of the Indian VET system concerning employability in the second last section titled Relationship of Employability to the Indian VET System. This section gives a short overview of the literature on employability in terms of its general use and the specific Indian context. The International Labour Organization (ILO) defines employability as relating to ‘portable competencies and qualifications that enhance an individual’s capacity to make use of the education and training opportunities available in order to secure and retain decent work, to progress within the enterprise and between jobs, and to cope with changing technology and labour market conditions’ (ILO, 2004, p. 19). The definition already refers to several aspects that are important and necessary in examining employability, namely, on the one hand, individual qualifications, which help workers adapt to changing employment requirements, and, on the other, the environment, which is subsumed within labour market conditions. In addition, employability depends on personal attributes and how those are presented in the labour market and the work environment, the social conditions, and the economic context. This means that, as well as subject-specific knowledge, personal attributes and the environment must, again, be particularly emphasized.

McQuaid and Lindsay (2005, p. 206) argue similarly, defining employability as ‘derived from, and affected by, individual characteristics and circumstances and broader, external (social, institutional and economic) factors that influence a person’s ability to get a job’. These contextual factors are each essential in defining employability. This is also reflected in the Canadian Labour Force Development Board (1994, p. 9) definition: ‘Employability is the relative capacity of an individual to achieve meaningful employment given the interaction of personal circumstances and the labour market’. CEDEFOP (2008, p. 70) also mentions that it is not only entry into employment that matters, but also the maintenance of it and the development of the career. These three steps also reflect the definition of Hillage and Pollard (1998, p. 1): ‘Employability is about having the capability to gain initial employment, maintain employment and obtain new employment if required.’ This shows that employability includes necessary skills for individuals to gain and maintain employment.

Sanders and de Grip (2004, p. 4), in their expansion of the concept of employability, refer to the changing work environment and thus focus on the need for readiness to adapt in today’s fast-moving and dynamic labour market, in terms similar to those set out by the ILO: ‘the capacity and the willingness to be and to remain attractive in the labour market, by anticipating changes in tasks and work environment and reacting to these changes proactively’. The changing work environment is a recurring factor when considering employability. This has a strong influence, for example, on selecting and imparting employable skills.

The numerous definitions from across the international spectrum show that employability is often equated with the supply of technical and social skills. In addition, the importance of the learning environment is emphasized. This allows us to draw some conclusions about employability in India.

In India, employability is often understood as to ‘gain and maintain’ employment (Hillage & Pollard, 1998). This appears to be important, especially in the context of youth employment, as in India this group has particular problems getting into employment in the first place (Mitra & Verick, 2013). To achieve this, technical skills and job-specific knowledge are essential for employers, as are general competencies (such as literacy). Furthermore, the definitions of employability show that the applicability of job-specific knowledge is especially central. However, it is clear that, in the Indian context, the focus on employability is often particularly visible in the context of skills mismatch and the resulting unemployment. That is why Khare (2014) defines employability in the Indian context as a function of two fundamental factors: (1) the academic qualifications of an individual (in terms of general competencies); and (2) the learning environment that helps him or her build specific general skills. Since the present paper aims to assess the employability of Indian youth, Khare’s definition is apt, as it integrates aspects from the international discussion and focuses mainly on acquiring qualifications and skills and the place of education. The definition helps explain what skills, abilities, and qualifications must be taught to workers during their education so that they are sufficiently trained to fill a job vacancy and avoid a mismatch. This is why these are to be considered as part of a framework for analysis of the employability of the Indian VET system. These aspects in detail are:

Subject-specific knowledge

Employers place subjective requirements on individuals in terms of their technical knowledge, knowledge related to the job, and ability to cope with changing technology.

Person-centred skills

Those skills mentioned in Khare’s (2014) definition cover a broad spectrum, such as basic skills (literacy), person-related skills (communication), conceptual skills (problem-solving), teamwork skills, or personal skills (motivation, loyalty).

Environment

In addition, it becomes clear that while the requirements of employers, and the specific skills of individuals, are decisive in establishing employability, so too is the environment. It includes the economic context, the institutional environment, the learning context, and the education participant’s social situation. In particular, Neroorkar and Gopinath (2020) highlight the importance of considering the environmental, external, and institutional factors in the Indian context. Therefore, it is essential to mention that it is not only the acquisition of employable skills that leads to youth employment, but also other aspects such as gender, caste, and race, as they impact on recruitment (Thorat & Attewell, 2007).

Employability exists if the aspects mentioned above are present. As employers want to hire employees with the above skills, educational programmes that teach these skills give learners a comparative advantage in the job market (Srivastava & Khare, 2012).

Therefore, this paper examines the following aspects to determine whether employability can be acquired in the Indian context. These aspects are then analysed in the second last section in relation to employability in the Indian VET system:

  1. (1)

    Subject-specific knowledge: specialized skills, knowledge related to the job and the ability to cope with changing technology.

  2. (2)

    Person-centred skills: basic skills (literacy), personal skills (motivation), conceptual skills (problem-solving competence), and people-related skills (communication).

  3. (3)

    Environment: economic context, institutional environment, and social situation.

Overview of the Indian VET system

General overview of the education system

The school system in India covers 12 years and is known as the 10+2 system. ‘Education for all’ has been a political goal for many years (Chauhan, 1990), and the Right to Education (RTE) Act of 2009 entitles every child between the ages of 6 and 14 to free compulsory education. Elementary education is divided into primary school (classes 1–5) and upper primary (classes 6–8). When students complete the mandatory schooling (Class 8), usually at the age of 14, they can make the transition to the two-year lower secondary (classes 9 and 10) and senior secondary level, which consists of two years (classes 11 and 12). Students can pursue higher education after passing the higher secondary (Class 12). Graduate education can take three to five years, and postgraduate two to three years, depending on the stream (Wessels & Pilz, 2018). The Indian government is also planning to modify the current 10+2 structure of school education. The plan of the new NEP envisages a “5+3+3+4” concept, which corresponds to the age groups 3–8 years (primary level), 8–11 (preparatory level), 11–14 (intermediate level) and 14–18 (secondary level) (MHRD, 2020). This would include the age group from age 3. This new structure has not yet been implemented.

VET at the school education level

Some pre-vocational education is offered at the secondary education level, providing training in simple and marketable skills to students in classes 9 and 10, developing students’ vocational interests, and allowing the self-exploration of vocational preferences. This also facilitates students’ choice of vocational courses at the higher secondary level (classes 11 and 12) and prepares students for participation in work experiences (Tara et al., 2016). VET starts at upper secondary level (classes 11 and 12), provides general education, and lasts two years.

The vocationalization of secondary education was begun in 1988 by the Ministry of Human Resource Development (MHRD) as a centrally sponsored scheme. This scheme provides vocational education in secondary schools and is considered an alternative to the general stream of education in schools (NSO, 2019). The scheme offers 150 vocational courses of two-year duration at higher secondary level (classes 11 and 12). Secondary and higher secondary are essential stages in the school education system of general education since only at this point do the young people decide their pathway and whether to pursue higher or vocational education (Planning Commission, 2013). Also, it integrates vocational education with general education and provides horizontal and vertical mobility to the students (MHRD, 2017).

The key focus of India’s eleventh and twelfth five-year plans was on technical and vocational education; therefore, the government shifted the focus from general education to skills education to improve the quality of education and the skill base among students (Bhalla & Meher, 2019). Vocational education was initiated at the school level with the aim of enhancing the employability of individual students, reducing the mismatch between workforce demand and supply, and providing an alternative to the pursuit of higher education.

Vocational education is offered only at the higher secondary level (classes 11 and 12). Thus, the students only have an opportunity to acquire vocational skills once they have completed their secondary schooling (classes 9 and 10) (British Council, 2019). This scenario needs to be considered against the background of the high dropout rate in secondary education (17.2 per cent), which means that many young people take up unskilled, low-productivity employment in the informal sector (MHRD, 2018).

Many young people did not receive any vocational or technical training (see Table 3). Most of the skilled population in India acquires skills through non-formal training, including hereditary passing on of skills, on-the-job training, self-learning, and informal apprenticeship (Agrawal, 2012; Ajithkumar & Pilz, 2019). These areas of skill acquisition are vulnerable to the lack of employability, especially given the background of the technologization and digitalization of the economy and rapidly changing knowledge (Zenner et al., 2017).

Table 3 Percentage distribution of persons aged 15–29 years by the status of vocational/technical training.
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VET system at the higher level

Formal technical education in India consists of a three-tier system comprising industrial training institutes (ITIs) at the first level, polytechnics at the middle level, and professional courses which offer engineering degrees in colleges and universities at a higher level (Agrawal, 2012). In India, vocational training programmes are offered through two principal schemes: the Craftsmen Training Scheme (CTS) and the Apprenticeship Training Scheme (ATS). The CTS and ATS are offered by the Directorate General of Training (DGT) under the Ministry of Skill Development and Entrepreneurship (MSDE). The two schemes are complemented by the Dual System of Training (DST), which strives to create links between industries and ITIs.

Craftsmen training scheme

The CTS is the most important in offering vocational training to meet existing and future workforce needs through the vast network of ITIs. These are the oldest and most trusted parts of the VET system (Mehrotra, 2016), and are expected to play a crucial role in enabling youth to enter the world of work (Kumar, 2016).

Students who have completed Class 8 of school education are able to enrol for vocational training courses in ITIs. However, some courses require an entry level of Class 10 (Venkatram, 2012). The first ITI was opened in India in 1950, and by 2007 there were around 7000 ITIs in the country. Currently, there are more than 15,000 ITIs, of which 11,892 are private ITIs. The total seating capacity of all ITIs is about 2.7 million (MSDE, 2020).

As the country is expected to create a pool of skilled workers through various measures, the aim should be to strengthen vocational training, including expanding the ITI network and establishing more ‘Centres of Excellence’ (CoEs) with the active participation of public–private partnerships. The programme was launched to upgrade existing ITIs to CoEs to meet the skill requirements of industry clusters in the respective fields by setting up structures to make training wholly demand-driven and thus increase employability (Kumar, 2016).

Dual system of training

The scheme known as the ‘Dual System of Training’ (DST) was launched by the Directorate General of Training (DGT) and the MSDE in 2019 in order to create linkages between industries and ITIs. The scheme was set up primarily to improve the link between learning outcomes and industry requirements to positively impact the industry readiness of trainees (MSDE, n.d.). The trainees are taught theoretical knowledge in the ITIs and given practical training through hands-on exposure in industry. Specific regulations apply to the participating companies in order to guarantee the quality of the practical training. These include, for example, a minimum number of employees and the availability of tools and equipment. Depending on the duration of the courses (6 months, 1 year, 2 years), the time spent in the industry must be a minimum of 25 per cent and a maximum of 50 per cent of the total duration (DGT, 2018b). Admission to the ITI and the courses offered, including duration, examination, and certification, are identical to those offered under the CTS. As of January 2020, 748 memoranda of understanding (MoUs) had been concluded between industry organizations and ITIs (MSDE, n.d.). The German dual-training system is seen as a model here. The scheme aims to change the government’s implementation strategy for VET, moving away from an input- to an outcome-based approach, and is intended to emphasize practical phases, in particular, compared to the CTS (UNESCO, 2020). In particular, measures that give employers a central role in design and implementation have been developed in response to the need to increase employability. However, a study by Maitra et al. (2022) shows that due to bureaucratic hurdles and the hierarchical system, the implementation of the DST has had limited impact and has not therefore fully realized its transformative potential.

Apprenticeship training scheme (ATS)

The 1962 Apprenticeship Act in India covers four types of apprenticeship: (a) trade apprenticeship, (b) technician (vocational), (c) technician, and (d) graduate. The DGET is responsible for the first type, and the MHRD is responsible for the remaining three. The first and second types of apprenticeship aim primarily to create a cadre of skilled and semi-skilled shop-floor workers. In contrast, the third and fourth aim to train youths as potential managers for manufacturing in the organized sector (Mehrotra, 2014; Wessels & Pilz, 2018). The trade and technician (vocational) apprenticeships are aimed at youth aged between 15 and 18 years and are intended to provide practical on-the-job training to those who graduated from an ITI after a two- or four-year course and those students who have received no training in any ITI, respectively. The technician and graduate types of training are for those aged 18–22 who have acquired a higher level of skills training, such as ITI graduates, diploma graduates in polytechnics, or degree graduates in technical engineering institutions. There are 259 designated trades under the ATS, in which 28,500 establishments conduct the training of 220,000 trade apprentices (MSDE, 2016a, 2020).

Post-secondary education: Technical education

While vocational education refers to a lower level of education and training for young people aimed at producing skilled or semi-skilled workers, technical education is after post-secondary level and prepares technicians to work as supervisors. Technical education offers various courses in engineering, technology, management, architecture, pharmacy, and hotel management (Venkatram, 2016). Over the past two decades, there has been a growth in the number of technical education institutions in the country, which has positively impacted the quality of vocational and technical education (Mamgain & Tiwari, 2016).

Polytechnic education offers three-year generalized diploma courses after Class 10. It primarily offers courses in conventional engineering disciplines such as civil, electrical, and mechanical engineering; however, since early 1990, polytechnics have also offered courses in disciplines such as electronics, computer science, and medical lab technology, to increase employment opportunities for students in the diversified labour market (Schneider & Pilz, 2019; Schneider 2022). In 1947, there were 43 polytechnic colleges in India with an intake capacity of 3400, and, by 2018, there were around 3440 polytechnics in India with an intake capacity of 1.5 million (MHRD, 2019).

Polytechnic education aims to create a pool of skilled workers to support shop floor and field operations as a middle-level link between technicians and engineers (Khare, 2016).

In addition to the multiple forms of training presented at the school, higher, and post-secondary levels some companies act as training providers. However, the training measures employed differ greatly depending on the sector and the size of the company. Larger companies with more employees and the corresponding financial resources rely, for example, on in-house training with well-equipped training centres and self-created curricula. This can be observed increasingly in the electrical and automotive industries. Meanwhile, small companies tend to focus on cluster solutions or joint programmes to adapt the employees’ skills profiles to the company’s needs (Mehrotra, 2014; Pilz & Wiemann, 2021; Tejan & Sabil, 2019).

Relation of employability to the Indian VET system

As described above, most of the workforce in India comes from the formal general school system or the informal sector. Numerically, the VET system plays a minor role; however, due to its structure, and in relation to employability requirements, the VET system needs to be analysed in detail.

Subject-specific knowledge

Subject-specific knowledge is seen as one of the most important components of employability. For many companies, subject-specific knowledge is a necessity when hiring applicants. In this context, four different aspects are of particular interest.

Curricula

In order to impart this specific type of knowledge in the VET system, it must first be introduced into the curricula; therefore, up-to-date and workplace-based curricula are necessary (Agrawal, 2012). This is often not the case in India, as outdated curricula are still regularly used nationwide. Furthermore, curricula usually take a long time to renew and need to be more effectively designed (Ajithkumar & Pilz, 2019; Tara et al., 2016). In a rapidly changing and dynamic labour market, in which new technologies are relevant, application-orientated, and up-to-date curricula are of specific significance.

Industry involvement

One of the main objectives of the National Policy on Skill Development and Entrepreneurships is to meet the challenge of upskilling on a large scale, with speed, standard (quality), and sustainability (Government of India, 2015). International VET research shows that successful cooperation between employers and training providers is crucial for a functioning VET system. In India, it is clear that more robust cooperation between the actors in a corporatist model would also lead to a more robust labour market capability and enhanced employability (Bosch & Charest, 2010). This is frequently mentioned. However, closer coordination between actors is challenging to implement, for various reasons, including a lack of structures, changing government responsibilities, lack of public investment in the VET system, and the design of trade unions (Bosch & Charest, 2010; Mehrotra, 2014, 2016; Wessels & Pilz, 2018). Skill formation in India continues to be individualized with low government and corporate influence and little coordination among them (Pilz, 2016; Singh, 2012).

Practical components

The practical component of VET, a central dimension of employability and essential for implementing subject-orientated knowledge, needs to be improved in India, particularly at the secondary education level (Majumdar, 2016). Employers think that the vocational training provided at institutions such as ITIs is deficient in providing the practical skills needed to perform on the job. During their studies, graduates get no exposure to the commercial skills required to perform as business persons (World Bank, 2008). Many young people in India struggle to acquire the skills that employers demand. This is mainly due to the issue of skill mismatch and the quality of VET, as well as weak navigation and transition school-to-work processes. The notion that education leads to employable skills, which then lead to employment, differs in India (Comyn, 2014). This highlights the need to embed a hands-on practical component in VET courses and to develop an effective apprenticeship system. Industry associations, sector councils, and companies could also play a more significant role in exposing VET participants to practically orientated subject knowledge (Majumdar, 2016).

Teacher qualification

Another important aspect of imparting specialized knowledge in the VET system is the qualification of VET teachers. Just like the students in the VET system, they often lack industry exposure. Practical periods in the company or mandatory in-service training are only provided to a limited extent in teacher training, so specific expertise is often unavailable (Wessels & Pilz, 2018). Most teachers are only able to teach isolated theory-based knowledge because they lack contact with industry (Schneider et al., 2023). This knowledge is often outdated, as mandatory continuous teacher training and knowledge refreshers are not provided. This deficiency is transmitted to the students who encounter problems applying subject-specific knowledge.

Person-centred skills

In addition to theoretical knowledge, person-centred skills, such as reliability, communication, and behavioural skills, are coming increasingly into focus (Schneider et al., 2023). Often, these ‘soft’ skills are even more important to employees than general competencies; however, such soft skills cannot be acquired solely by means of frontal teaching, which is still prevalent. Internships, research projects, interdisciplinary courses, technical demonstrations, or laboratory work can be exciting means through which to implement more interactive methods (Mulder, 2017). Many person-centred skills, such as communication or conceptual skills, can only be taught effectively through action-oriented teaching, which is rarely implemented in India (Sarin, 2019). However, deficiencies in person-centred skills, such as basic knowledge, originate before entry into the VET system. For example, even at the primary level of education, expected learning outcomes are not achieved (Agrawal & Agrawal, 2017). According to the Annual Survey of Education Report (ASER, 2017), about 52 per cent of Class 5 students could not read a simple text taken from Class 2 students. Similar findings can be observed for basic numeracy. This has an impact on the entire school career, and thus also has consequences for education at VET institutions, since these often have to make up for the weaknesses that the students bring with them from the general education system: the VET system thus has a catch-up function. Communication skills are also widely regarded as a necessity. This is particularly true in the service sector, but also applies to all other areas of the professional sphere (Pasupathi, 2020). The predominance of teacher-centred, theory-based instruction with little student-centred, hands-on activity negatively impacts the development of communication skills. This effect is reinforced by the fact that many students, especially from rural areas, do not have sufficient basic knowledge of English because they use their local dialects as a colloquial language; however, English is often required for teaching and learning and is also expected as a business language in many companies (Pasupathi, 2020). This also influences employability, although the VET system also tends to play a catch-up role in imparting basic knowledge in these person-centred skills (Agrawal & Agrawal, 2017).

Environment

As already shown, the environment is essential in acquiring applicable knowledge. The economic context, the institutional situation, and the social situation can be considered to comprise the environment in the context of employability.

Economic context

While the country will need higher numbers of semi-skilled workers in the coming years, only 3 per cent of the total Indian workforce has completed VET skills training formally, compared to between 80 per cent and 90 per cent in East Asian countries, such as Japan and the Republic of Korea (Ghose, 2016; Mundle, 2017). As shown above, the large informal sector has a powerful influence on the economic context, whereas the formal VET system has a minor influence. Due to its relatively minor relevance in the Indian system, the VET system can also only react to economic developments to a limited extent. The shift from an agrarian economy to one based more on the service sector requires a far-reaching modification of skills (Agrawal, 2012). However, education provision in these areas is comparatively limited in numbers. In addition, companies have so far shown little interest in participating in the VET system. In general, there is a great deal of scepticism about investing in VET, mainly because there is a fear of competitors trying to poach employees or because the expected quality of future employees cannot be guaranteed (Pilz, 2016). Furthermore, comparatively low salaries are paid to graduates from the VET sector. These pay structures also influence employability since low salary expectations mean that only comparatively less-qualified aspirants enter the VET system (Ahmed, 2016).

Institutional situation

Patterns of integration of youth into work are also heavily influenced by institutional factors that can mitigate or aggravate obstacles to transition and employability (Zimmermann et al., 2013). The VET system is seen to be confusing and ineffective due to its many responsibilities. Nearly 21 ministries or departments implement skills development programmes, especially for young people, mostly using private sector training providers (MSDE, 2018). Such programmes require more effective coordination to address the parallel initiatives and duplication of effort. There are many skill development and employment programmes in India, with significant investment and resources for such programmes. However, there is a lack of systematic evaluation of the impact of these programmes on job creation and little rigorous assessment of whether such initiatives are reaching the target population (Chakravorty & Bedi, 2019). The low-quality standards in the system, and ineffective quality control, are obstacles to the successful teaching of employable skills (Neroorkar & Gopinath, 2020; Ramasamy et al., 2021; Schneider et al., 2023). Nevertheless, there are significant reforms and increasing efforts in vocational skills development in India, evident from the government’s increased interest. In recent years, India has witnessed increased attention to skills development programmes to improve the skills landscape and equip a skilled workforce (see MSDE, 2018).

Social situation

Successful enrolment in training in the VET system often still depends on which school one attends, as learning outcomes differ enormously between different schools or VET training providers. This divergence in quality is reflected, for example, in the local infrastructure (new machines) and the quality of the teaching staff (Joshi et al., 2014).

The social situation in India also has an impact on employability. Students who show less academic aptitude, and hail from lower socio-economic backgrounds, mostly enter vocational education—often, their parents were also less educationally qualified (Kumar et al., 2019). The parents’ ability to raise school fees also significantly influences which school their children attend and what level of employability they can reach. It is implicit that, socially, VET is perceived negatively and associated with low-status manual work and low-paying employment in India (Agrawal, 2012; Ajitkumar & Pilz, 2019; Jambo & Pilz, 2018; Schneider, 2022, 2023). Vocational qualifications are considered the most suitable option and are highly valued for those with limited academic ability who will work in jobs demanding a low or medium skill level (Kumar et al., 2019). As Majumdar (2016) points out, identifying emerging skill needs and qualification requirements in the labour market, and providing education and training to meet these needs, could increase the relevance and effectiveness of VET for the young population. In addition, the labour market segmentation at low qualification requirement levels is still strongly influenced by social factors such as the caste system. Other essential factors include the differences between metropolitan and rural areas and limited opportunities for females (Agrawal, 2014; Khare, 2014). However, marginalized groups, in particular, can benefit from VET in terms of lifelong learning, as social background remains a crucial discriminator in participation in learning and VET is usually the only opportunity for these groups to acquire basic skills and abilities that they can develop further in their professional life (Agrawal, 2012). The complex framework conditions in India must always be considered, including in reflecting on the concept of employability. However, the influences of these social conditions differ significantly and do not affect every student similarly. This illustrates the significant heterogeneity of India, which also results from the large population (Singh, 2012).

Discussion

The literature reviewed above highlights the different ways in which employability is defined across the international spectrum. For the Indian case, the literature analysis showed that technical knowledge, personal competencies, and the environment are crucial in acquiring employability. To enable people in India to achieve the competencies necessary to be employable, some theoretical, social, practical, and political aspects must be implemented. These aspects are based on the concepts of employability discussed at the beginning of the article. The application of the concepts from the previous section is discussed below.

Theoretical implications

Coming back to the definition of Hillage and Pollard (1998), who describe employability as ‘the capability to gain initial employment’, the analysis makes clear that the individual capability to acquire subject-specific knowledge, and the person-centred skills, are not by themselves sufficient to gain employment. The environment, with the economic, institutional, and social context, is a decisive factor in achieving employability. However, in India, the environment to acquire employability is limited and dependent on social factors. Ahmed (2016) argues that a high level of unemployment is associated with those trained in formal VET. Several studies (Agrawal, 2012; Mehrotra, 2014) support this argument and show that VET graduates’ quality is insufficient, as they do not possess the required skills expected by their respective industries. Therefore, in India, discussion of the need for an efficient and quality-driven vocational skill development system to develop employability for the high youth population has been ongoing for many years (Saini, 2015; Tara et al., 2016). There are many reasons why VET, despite all attempts at reform, has not yet achieved significant improvements in terms of employability. In addition to the challenge of coordination in a large country with many states and an agricultural sector that only required formal vocational training to a limited extent and dominated in the past, two aspects play a prominent role.

Social implications

First, Singh (2001) emphasizes that during the colonial period, the British administration trained only a small group of administrators in university institutions. The broad mass of the Indian population, on the other hand, was offered, at most, a rudimentary general education. Vocational training did not play a role (Steele & Taylor, 1994). At this point, the British colonial power did not have a distinctive vocational education in its own country. Therefore, regarding policy transfer, the British training system could not be considered a role model (Bornali, 2021). In connection with this, there were also no promoters for introducing a vocational training system in India. However, this progressively changed in the post-colonial era, especially after the opening and liberalization of the Indian economy after 1990. Reforms in the education system regarding vocational training were necessary, primarily to develop a skilled and internationally competitive workforce. Subsequently, especially in the recent past through the eleventh (2007–2012) and twelfth (2012–2017) five year plans, the political focus has increasingly been placed on the training of the Indian youth and the improvement of the infrastructure (Maitra et al., 2022).

Second, vocational training is strongly linked to the caste system that characterizes Indian society (Singh, 2001). In this system, the lower castes are assigned the manual work, while the higher castes do the intellectual work (Agrawal, 2014; Vincent & Rajasekhar, 2021). Consequently, vocational education is often seen as inferior and stigmatizing regarding social status (Agrawal, 2012; Jambo & Pilz, 2018; Ratnata, 2013). The caste system is very differentiated and nuanced, so this classification cannot be generalized. However, studies show that there are still correlations between caste and assignment to occupations. Of course, other factors, such as socio-economic background, also play a role. In addition, attempts are made to level the caste differences, e.g., through quota regulations, so that people from lower castes also have the opportunity to enjoy higher education, e.g., in public universities (Subramanian, 2015).

In addition, there is a further challenge: Since the existing VET institutions often do not guarantee a good quality of training (see above), they tend to attract students with poorer school performance. In turn, students with better qualifications do not apply to vocational institutions due to the stigmatization of VET. Consequently, the inadequately trained graduates of vocational training programmes, in turn, obtain only poorly paid employment or even no employment at all. In a way, this is a ‘self-fulfilling prophecy’, as the opinion of employers that graduates of VET programmes do not have suitable qualifications is confirmed, and those interested in VET realize that the training does not lead to adequate remuneration. The concept of employability makes individuals responsible for their employment but neglects structural inequalities and problems in the labour market, which are particularly relevant in India. In the Indian context, in particular, structures in the education system and external factors such as equal access to education are not in place, making it difficult for individuals to acquire employable skills. However, a prerequisite for employability is that individuals can acquire employable skills in the first place (McQuaid & Lindsay, 2005; Nikunen, 2021). Moreover, when using the concept of employability, care should be taken not only to focus exclusively on the needs and requirements of employers and the marketization of employees but also to consider personal development, prevailing living conditions, and the social rights of individuals, especially in the Indian context (Maitra et al., 2022).

Practical implications

For a long time, the resulting skills gap was of little relevance to India, as the sectors that dominated either did not require formal vocational training (e.g., agriculture and small trade), or required employees to have previous academic training (e.g., IT sector or pharmaceutical industry). The technical development of products and production in many traditional sectors, as well as the growth of the industrial sector, encouraged upskilling. Thus, the demand for skilled workers at the intermediate skill level has increased massively in recent years. This situation is exacerbated because more demanding production processes require new procedures, especially in the industrial sector. These can no longer be realized consistently with the Taylorization of work processes common in India up to now. Organizations with complex hierarchical levels, extensive specifications, and control measures are no longer effective in a context in which production processes have become more complex (Pilz & Wiemann, 2021).

However, these new production conditions may also be advantageous to the future employability of job seekers in India. This is because the new forms of production are usually less manually orientated and rarely have anything to do with dirty and dangerous working environments. In this respect, higher vocational programmes with a strong practical orientation, such as those offered in other countries by universities of applied sciences and vocational academies (Köpsén, 2020), could possibly be a solution for India. This is because, in addition to offering appropriate qualifications, such courses also tend to be seen as attractive in terms of reputation and status among young people (Ajithkumar & Pilz, 2019; Jambo & Pilz, 2018; Schneider, 2022; Schneider & Pilz, 2019; Tara et al., 2016).

Policy implications

Such programmes could be established relatively easily at the existing polytechnics (Schneider & Pilz, 2019; Schneider, 2022, 2023). Current initiatives of the Indian education administration are also heading in this direction, with the introduction of the Bachelor of Vocational Education (B.Voc) degree. The academic education programme contains substantial vocational content to increase horizontal and vertical mobility (UGC, 2015).

In addition, employability can, of course, also be addressed through appropriate reforms in the VET system itself. Past initiatives have predominantly sought to achieve reform through radical and comprehensive improvements in quality. For example, attempts were made to enhance the quality of the ITIs through various projects (DGT, 2018); however, these projects only relate to a small number of VET providers. For example, the Vocational Training Improvement Project (VTIP) has upgraded the quality of about 400 ITIs (DGT, 2018a). A further 1396 ITIs were upgraded through cooperation between government and private agencies and public–private partnership programmes. In total, there are currently around 15,000 ITIs (governmental and private) in India (MSDE, 2020).

In our view, reform approaches would be necessary to achieve an impact across the whole of India over a more extended period. These should be oriented towards regional labour markets’ respective needs to ensure suitable employability locally. At the same time, an appropriate level of qualification for the graduates of such VET programmes can lead to adequate remuneration by employers, which can increase the attractiveness of these VET programmes in the long run. The reform approaches themselves could be achieved, for example, through better equipping of vocational schools, in providing up-to-date as well as needs-orientated curricula and learning materials, in the improved theoretical and practice-orientated qualification of teaching staff, and a closer local cooperation relationship between vocational schools and companies (for example, through the integration of internships in training) (e.g., Mehrotra, 2016).

Finally, it must be pointed out that this paper is limited in the sense that it focuses on the formal vocational system, neglecting the impact of informal training on skills and employability (Venkatram, 2012).

In recent times, informal learning has proven itself in many areas of the Indian economy because this form of training meets the need for employability in the informal sector (Prakash & Kumar, 2011; Regel & Pilz, 2019). One approach could be the integration of informal apprenticeships, which, despite their informal learning setting, integrate elements of formal educational content and certification (see details in ILO, 2011; King, 2012; King & Palmer, 2010).

This paper argues that the concept of employability needs to be addressed with more emphasis in the Indian VET system to tackle the existing mismatch and to improve the labour market situation of Indian youth. For further work on the topic, it makes sense to examine in detail what the theory and practice of learning look like in the respective institutions of the VET system in order to discover how the teaching of subject-specific knowledge and person-centred skills can be improved.