In uncertain times, skilling is India’s safety net

UTTAM PRAKASH AND ROHIT MANI TIWARI

Alvin Toffler once said, “The illiterate of the 21st century will not be those who can’t read and write, but those who cannot learn, unlearn, and relearn.” Half a century later, that feels less like prophecy and more like a survival strategy.

In his 79th Independence Day speech, Prime Minister Narendra Modi pledged to be an active partner in building Viksit Bharat. The message is clear: from made-in-India semiconductors to enhanced nuclear capacity, from critical minerals to employment, India must stand on its feet to prosper, especially in an age of disruption, where markets can be erased overnight and AI can make jobs vanish in months. Dependence will derail ambition, whether in energy or in the labour market.

The United States, India’s biggest export market, has hit us with a double tariff blow: 25% plus 25% which the Ministry of Commerce says could impact $86.5 billion worth of exports this year. MSMEs, described in Budget 2025-26 as “one of the key engines in India’s journey of development,” account for 45.73% of exports and employ over 25 million people, and are deeply tied into value chains with industry giants who are not immune either. TCS plans to cut 2% of global staff and has frozen onboarding for 600 hires. “More things with fewer people” is becoming the organising principle of the industry. Youth, women, and other vulnerable groups are at even greater risk. The UN warns that many MSMEs may not survive the AI wave. The ILO’s Director has cautioned that “skills development must be fundamental to India’s employment strategy,” while UNESCO has declared 2025 the year of ‘Youth empowerment through AI and digital skills’.

There are two moves on the chessboard. One, continue diplomatic efforts and push bilateral agreements in a mission mode. The other, and perhaps more sustainable one, is to look inwards, sharpen our competitive edge, build a workforce that can adapt faster than disruption strikes, whether from tariff-driven “bloodless assaults” or the rapid scaling of AI and automation. The first track buys time. The second builds strength. That requires making “learn, unlearn, relearn” not just a personal mantra but a national policy.

The soul of self-reliance is a strong skill framework. The India Skills Report 2024 found only 51% of graduates employable, with even lower rates in some technical streams. That drags down competitiveness. One bold idea is to link social security with skilling. EPFO and PFRDA, which operate on a deferred income model, could earmark a small portion of contributions for a skills fund. Today, workers contribute during their careers and withdraw only at retirement or in emergencies. But what if part of those contributions also keeps them employable by funding certified, industry-relevant training throughout their working lives? A sort of career insurance.

These institutions could serve as delivery hubs: financing training, connecting workers to accredited providers through NSDC and sector skill councils, and maintaining a skills ledger that follows across jobs and geographies. A minimum contributory period would ensure accountability, while guaranteeing equal access to both white- and blue-collar workers. In an age of trade turbulence and AI disruption, such a model could turn social security from a passive safety net into an active engine of resilience. The newly launched Pradhan Mantri Viksit Bharat Rozgar Yojna is a step in the right direction, requiring workers to complete financial literacy training to access full benefits. We can scale up this idea: no withdrawals from the ‘skill account’ unless used for programmes tied to employable skills ending in real hiring.

Sceptics will ask why risk retirement funds for training that may not guarantee jobs. The answer is safeguards. The system must be opt-in, capped at a safe percentage, and matched by contributions from workers, industry, and possibly the government. This is not about raiding the corpus; it is about co-investing in employability. Singapore’s SkillsFuture credits and Germany’s dual apprenticeship system show that when funding, employer partnerships, and accountability align, lifelong skilling works. India can take lessons with an emphasis on measurable outcomes and employer buy-in.

Operation and challenges

A worker’s UAN or PRAN could be linked to a skill account managed by EPFO or PFRDA. Co-funded by workers, employers, and possibly the government, it would be accessible only for certified courses through NSDC and sector skill councils. A portable skills ledger would track training across jobs and geographies. Industry would co-invest, ensuring training aligns with real hiring pipelines. Since the fund is purpose-bound, it would not vanish into unrelated expenditures.

Execution is the toughest hurdle. India’s training programmes have a mixed record, plagued by poor quality, low completion rates, and weak industry relevance. For this idea to work, it must enforce ruthless quality control, transparent fund management, and strong employer partnerships. Otherwise, it risks becoming another well-intentioned policy that burns cash without building capability.

Harvard’s Mark Moore offers a useful ‘Strategic Triangle’ to test public policy: does it create real value, will stakeholders back it, and do we have the capacity to deliver? Linking social security to skilling clears the first test easily. The second depends on careful execution, and the third is achievable with institutions already proven to deliver at scale.

A skilled, adaptable workforce is as strategic as any nuclear reactor or space station. If India can combine self-reliant industries with self-reliant workers, it can absorb tariff shocks, ride the AI wave, and turn uncertainty into opportunity. This idea is not entirely new. In the 19th century, Bismarck’s social insurance kept workers not only solvent in old age but employable through life. That principle is just as relevant today.

India can build not just on machines and minerals, but on the continuous reinvention of its people and the full use of its demographic dividend.

(Uttam is Regional PF Commissioner – Kochi, and an alumnus of ISS The Hague; Rohit is Regional Labour Commissioner – Thiruvananthapuram. He was part of the drafting committees for the Industrial Relations Code and the Code on Wages)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.