The backbone of India’s economy
India’s growth ambitions rest on the shoulders of its blue-collar workforce – the electricians, plumbers, painters, construction labourers, delivery riders and countless others who keep the nation running. These workers make up the vast majority of India’s labour force, yet most operate in the shadows of the informal economy. Over 90% of all workers in India are employed under informal arrangements, meaning they lack formal job contracts, benefits, and often access to structured training. This predominance of informality has long been a double-edged sword. While it provides livelihoods for millions, it also means low productivity, precarious working conditions and a persistent skills deficit.
As India marches toward a modern, $5-trillion economy, the demand for skilled labour in infrastructure, construction, manufacturing and services is skyrocketing. By 2030, the country is expected to need to create 90 million new non-farm jobs and fully 70% of these will be in blue-collar roles that require vocational or soft skills training. Sectors like logistics, e-commerce, construction and the gig economy are already experiencing surging demand for workers. Blue-collar workers account for roughly 80% of India’s non-agricultural workforce and are truly the engine of the economy. However, while demand for these workers is rising, most remain largely untrained or under-skilled, limiting productivity and earning potential.
Only about 4% of India’s workforce has received formal vocational training as of 2023. Even including informal on-the-job learning, a full two-thirds of working-age Indians have never received any skills training at all. This skills gap hits the informal and blue-collar workforce the hardest, trapping many in low-pay, low-productivity jobs and constraining India’s overall growth. Bridging this gap by transforming upskilling opportunities for India’s informal workers is necessary for inclusive growth.
The coming jobs surge and the skills mismatch
Several megatrends are poised to reshape India’s labour market in the coming decade. Rapid urbanisation, infrastructure expansion, the push in manufacturing (e.g. Make in India) and the digital services boom could together generate tens of millions of new jobs. McKinsey & Company projects that by 2030 India may generate 90 million net new jobs (non-farm), with blue-collar jobs driving 70% of this growth. These include roles like factory workers, carpenters, drivers, warehouse staff, cleaners, and tradespeople – jobs that typically do not require college degrees but do demand vocational skills or soft skills proficiency. The rise of the gig economy further accelerates this trend.
App-based platforms are creating work for delivery couriers, rideshare drivers, and freelance service providers. India’s gig workforce, estimated at around 7.7 million in 2020-21, is projected to nearly triple to 23.5 million by 2029-30. By then, gig workers could form over 4% of the total workforce – a significant share for a workforce as large as India’s. Notably, the bulk of these gig roles are in low-to-mid skilled services (only ~22% are high-skilled jobs), indicating a vast need for upskilling if gig workers are to transition into more stable, higher-paying opportunities.
The challenge India faces is that its workforce training ecosystem is not yet equipped to meet this surging demand for skills. This mismatch between the skills required by a modernising economy and the skills available in the workforce could become a serious bottleneck. Already, industries from construction to healthcare report difficulties in finding trained personnel, even as millions of youths remain unemployed – a paradox of unemployable labour alongside unfilled job vacancies. Unless India dramatically expands and improves its upskilling initiatives, the anticipated jobs surge may be undermined by a lack of job-ready talent.
Gender gaps and structural inequities in upskilling
Any discussion of workforce transformation in India must confront the deep gender gap in both employment and skills training. Women’s labour force participation in India remains among the lowest in the world for a major economy – only about 37% of working-age women are either employed or seeking work, compared to nearly 79% of men. In the vocational training domain, the divide is equally stark. As of 2022-23, only 18.6% of Indian women aged 18–59 had ever received any vocational training, compared to 36.1% of men. This gap has in fact widened over time. Even within government skill programmes, women are under-represented; in 2021, women made up a mere 7% of total trainees in skill development schemes despite policy mandates like reserving 30% of seats in Industrial Training Institutes (ITIs) for women.
Crucially, even when women do get upskilled, they tend to be tracked into lower-paying “feminine” trades, reflecting ingrained gender stereotypes in skills training. Data shows that women most commonly train in areas like beauty and wellness, tailoring, textiles, clerical work or healthcare assistance, whereas men dominate training in higher-paying trades such as electrical, mechanical and civil engineering, automotive, and IT hardware. This gender segmentation means women often miss out on the booming opportunities in construction, manufacturing, plumbing, electrical works, or emerging tech maintenance – sectors where wages and demand are growing.
A recent study found that over 30% of skilled young women went into beauty-related work and 21% into tailoring, while men were far more likely to go into electronics or automotive work that typically commands higher earnings. Such occupational segregation is one reason the return on training (in terms of salary uplift) tends to be lower for women. It is clear that without deliberately addressing gender bias by encouraging and enabling more women to enter non-traditional trades and ensuring training environments are gender-inclusive, India’s overall skilling mission will leave a huge portion of its potential workforce behind.
Inclusive upskilling must address issues like providing safe training facilities, flexible schedules, mentorship and placement support for women. Promisingly, when women do receive market-relevant skills, the impacts are massive: one survey showed skilled women earned 27% higher incomes than unskilled women, and had significantly better odds of securing formal jobs and financial independence. Thus, closing the gender gap in skilling has the huge potential of bringing millions more women into the labour force in better-paying jobs.
Government initiatives
Recognising the looming skills challenge, the Indian government has launched several initiatives over the past decade under the banner of Skill India mission. Flagship programmes like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), started in 2015, and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), focused on rural youth since 2014, have aimed to provide short-term vocational courses and improve employability. Early on, policymakers set bold targets – the National Skills Policy of 2015, for instance, envisioned training 400 million individuals by 2022. These efforts have undoubtedly increased awareness of skill development and millions have undergone some form of training through government-funded programmes. However, the overall impact has fallen well short of what is needed.
As of 2023, for example, the PMKVY scheme – despite multiple phases and iterations – had cumulatively trained a number of people quite different from the original aspiration. DDU-GKY and others add some numbers, but the combined reach still pales in comparison to the hundreds of millions in the informal workforce needing upskilling.
While government-sponsored training programmes like PMKVY and others have made considerable strides in expanding the reach of skilling across the country, there remain opportunities to enhance the depth and industry alignment of these efforts.
Community-based training: Bringing upskilling to the workers
One of the most effective strategies to upskill informal and blue-collar workers is to bring training opportunities directly to their communities. Traditional vocational institutes or ITIs are often concentrated in urban centers and many informal workers – juggling jobs and family responsibilities in peri-urban or rural areas – cannot easily access them. To overcome this, Smile Foundation is operating mobile training and community-based upskilling programmes that meet workers where they are. A standout example is Smile Foundation’s iTrain on Wheels programme which deploys mobile training vans to impart vocational skills in underserved areas.
In partnership with industry (such as a collaboration with Berger Paints for training painters), the iTrain on Wheels model has supported vocational training for painters across 24 states in India. These brightly painted vans are essentially classrooms on wheels – equipped with training equipment, simulators and audiovisual aids – that travel to over a hundred locations, from urban slums to remote townships.
The programme is designed around the needs of the worker—not the convenience of the provider. Static training set-ups are supported by specially equipped mobile units that bring workshops to worksites, dealer points and residential areas. Sessions are held in morning or evening slots to avoid wage loss and training durations are kept efficient—2 to 3 days per module—without compromising content depth. The curriculum spans a comprehensive range: pre-installation practices, fault diagnosis, safety standards, customer engagement, and even entrepreneurship ensuring that trainees are not only upskilled technicians but also confident, service-ready professionals. By literally rolling into communities, such programmes eliminate the cost and distance barriers that often exclude informal workers from formal upskilling courses.
By 2024, these mobile vans had empowered tens of thousands of unskilled or semi-skilled painters – including women painters breaking into the male-dominated trade – to become certified, improve their techniques and increase their incomes. Trainees practice everything from surface preparation to safe use of tools and even learn basic literacy and etiquette needed to deal with clients. An internal assessment of this programme showed enhanced technical proficiency and employability among graduates, many of whom have since secured better-paying contracts or started small painting businesses in their communities.
Similarly, our electrician training initiative plans to reach 300 workers annually, with 10–15 day modules delivered outside of regular work hours. Training centers are equipped with hands-on aids and simulation tools, building technical capacity while ensuring practical relevance.
Toward an equitable workforce transformation
With the largest youth population in the world and a potential demographic dividend on the horizon, the country cannot afford to let its informal, blue-collar workforce languish in a low-skill equilibrium. Upskilling India’s informal workers is a foundational pillar for inclusive growth and a stronger social contract. When an electrician from a village gains certification in solar panel installation or a domestic worker learns professional caregiving skills, it doesn’t only elevate their own income; it enhances the productivity of entire sectors and improves services for everyone. Conversely, failing to upskill this vast workforce risks trapping millions in subsistence jobs, deepening inequality and slowing India’s economic engine just when it needs to accelerate.
For India to fulfill its economic promise and social goals, the upskilling revolution must reach every alley and village, uplift men and women alike and equip them for the jobs of tomorrow. In doing so, India can craft a new model of growth – one that leaves no worker behind and in which prosperity is truly shared on the strength of a skilled and upskilled nation.
Sources: Periodic Labour Force Survey (PLFS) 2022-23; International Labour Organization; National Skill Development Corporation; McKinsey Global Institute; Smile Foundation programme reports; Government of India skill mission documents.
