ensures

Woke up to this screaming News Alert on my handphone. While everyone thought we spend pitiful amounts on Skill development compared to other economies, this headline exposed a stark truth.

According to recent budget data for FY 2025-26, India spent only about ₹1,730 crore (roughly 5%) of the ₹33,830 crore allocated for its flagship employment and skilling package.

PMIS: While companies offered over 1.6 lakh internships across two pilot phases, only about 52,000 were actually accepted by youth. This suggests a mismatch between what companies offer and what students want. The pilot phase of this massive “Internship Scheme” (a huge part of the budget) was not fully rolled out due to considerable delay. Author is still not sure if the same has received Cabinet approval and moved beyond the Pilot phase, though we are into 3^rd Budget year.

As I write, allocations for the Prime Minister Internship Scheme (PMIS) have been cut by more than half to ₹4,788 crore in the Union Budget 2026–27, reflecting a sharp reset after weak uptake during the pilot phase. The scheme had been allocated ₹10,831 crore in the Budget Estimates for 2025–26. However, this was later reduced by about 95 per cent to ₹526 crore in the Revised Estimates for the year.  As a result, while the FY27 Budget Estimates represents a cut of over 50 per cent from the original FY26 allocation, it marks an increase of more than 800 per cent when compared with the sharply pared-down Revised Estimates for FY26.

In the first round of the pilot, around 1,81,000 candidates applied for 1,27,508 internship positions listed by participating companies. Of these, 82,077 offers were extended, but only 28,141 candidates accepted them (~34%). A similar trend was seen in the second round launched in 2025. While 1,18,948 internships were posted and 83,696 offers were made, only 24,638 candidates — about 29 per cent — accepted the offers.

PM-SETU: Modernizing 1,000 Industrial Training Institutes (ITIs) and setting up new employment-linked incentive (ELI) schemes takes time. Bureaucratic hurdles and slow state-level execution often lead to unspent funds. As I write out of 15 Pilot cluster allocated just about 7-8 States have taken the initial baby steps viz RFP for identifying the Anchor Industry Partner, Setting up of State PMU – post which there are considerable time consuming activities before we can find any visible milestones on the implementation and the outcomes after another 24 months. Out of  ₹60,000 Crores earmarked for the scheme 1^st year disbursement is miniscule and thus we can expect another year, where percent of unspent funds continues to be abysmal.

To put it in a nutshell, there is a persistent skill gap. Many graduates have degrees but lack the specific workplace-ready skills that companies actually need, leading to high rejection rates in recruitment, While industry continues to reel under the impact of non-availability of suitable resource.

Though the government has spiked the Ministry of Skill Development’s allocation by 62% (to ₹9,886 crore) for the next fiscal year, demonstrating that the intent and money are there, the execution engine is still warming up. The goal is to move from simply handing out certificates to actually putting people in chairs at offices.

Degree vs Skill

In India, a degree is a status symbol, while a less aspirational skilling is often seen as a safety net for those who couldn’t make it to college. This cultural bias creates a massive roadblock for the economy and lesser uptake for Technical and Vocational Education and Training (TVET) In many Indian communities, a BA or B.Com degree carries more weight in matrimonial prospects than a highly specialized welding or plumbing certification. A case where Maa Saraswati is valued more than Maa Lakshmi. Some value it so much that they even resort to faking their degrees, notwithstanding the shame associated with risk of exposure.

In India, Dignity of Labour is a concept that often battles a deep-seated cultural hierarchy. While the constitution guarantees equality, the social reality is far more complex, layered with caste, class, and the recent gig-work revolution. White-collar desk jobs are romanticized, even if they pay less than blue-collar technical roles. Coupled with the above factors that delusion of Safety Net. Families often view a degree as a lifetime insurance policy, even if the graduate remains unemployed, whereas skilling is viewed as vocational or labor-class work.

Making Skilling Aspirational

We need to ensure that a person with a TVET Certificate can be vertically mobile in their career like in Europe. Better still eventually bridge  TVET Certificate into a Degree. If a technician can earn credits that count toward an Engineering degree later, the social stigma vanishes.

There are many Institutions like NTTF, GTTC etc that have churned out Icons by design  (as against a one-off success story) Using these icons and success stories (like India’s space missions or high-end manufacturing) to show that “doing” is just as elite as “studying.”

There is a ultimately a limit to what Government can do. The market needs to start paying skilled plumbers, electricians, and solar technicians more than entry-level data entry operators. When the paycheck is bigger, the aspiration follows.

Though New Education Policy (NEP) prescribes Skill development is integrated from 6th grade so it becomes a normal part of education, not a backup plan, in reality we need to ascertain how much of it is in practice.

We need to drive home a basic Fact Point – A degree might get you through the door, but in 2026, only a skill keeps you in the room.