Economic Survey Praises Odisha Skill Development Model

Economic Survey Praises Odisha Skill Development Model

Why in News? 

The Economic Survey 2025–26 has lauded Odisha’s skill development model, highlighting the state’s strategic “Fix, Accelerate, Scale” approach under the Odisha Skill Development Authority for strengthening ITIs and expanding market-responsive training, positioning Odisha as a national template for skill ecosystem reforms.

Odisha’s Skill Development Model

• • About: The Odisha model is an integrated, demand-driven approach that bridges the gap between academic education and industrial requirements. It prioritizes competency-based learning over mere certification, focusing on creating a “finishing school” environment for youth to ensure they are globally employable. 
  • Background: The transformation began in 2016 with the creation of the Odisha Skill Development Authority (OSDA). Facing a legacy of underutilised Industrial Training Institutes (ITIs), the state adopted the “Fix, Accelerate, Scale” strategy: 
    • Fix: Revitalizing ITI infrastructure and perception.
    • Accelerate: Implementing advanced, short-term training.
    • Scale: Expanding the reach to millions of youth across the state. 
  • Governance: The ecosystem is governed by the Skill Development and Technical Education (SD&TE) Department, with the OSDA acting as the apex implementation body.  
    • The World Skill Centre (WSC) in Bhubaneswar, established with an $85 million loan from the Asian Development Bank (ADB). The WSC operates under a hub-and-spoke model, where it serves as the premier “hub” providing technical mentorship and leadership. 
    • The Directorate of Skill Development cum Employment supports OSDA in mission execution, planning and monitoring skilling targets.
  • Strategic Policies: Odisha has pioneered several forward-looking policies:
    • Global Benchmarking: A strategic partnership with Institute of Technical Education – Education Services (ITEES Singapore) ensures the curriculum meets international standards.
    • Sector-Specific Focus: Recent MoUs in 2025 have expanded skilling into semiconductors, green hydrogen, and AI.
    • Nano Unicorn Scheme: This unique policy encourages skilled youth to become entrepreneurs, providing them with the necessary philanthropic capital and mentorship to start small businesses. 

• 10-6-4-2 Formula: The ‘10-6-4-2’ formula is a key pillar of the “Skilled in Odisha” model, designed to transform the perception of ITIs by leveraging relatable success stories. 

• Every ITI principal was tasked with identifying and sharing the journeys of 10 role model alumni to inspire current trainees.  

• 6 Alumni employed outside Odisha: To demonstrate that local training meets national and global industry standards.

• 4 Women: To encourage female participation in traditionally male-dominated vocational trades.

• 2 Entrepreneurs: To highlight self-employment and job creation as viable career paths after ITI. 

• Confidence-Building: Focused on psychological and environmental changes to build student confidence: 

• Image Re-invention: Traditional khaki uniforms were replaced with corporate-style uniforms to foster professional pride.

• ITI Fests: Large-scale events and competitions, such as Odisha Skills, were introduced to celebrate technical talent and create a sense of community.

• • Convergence: A key strength of the model is its inter-departmental convergence. The Nua-O scheme and the Odisha Skill Development Project Phase II (with a budget of ₹1,140 crore) integrate skill training with higher education and tribal welfare. 
    • The model specifically targets tribal and rural youth, aiming to reduce unemployment among marginalized communities through tailored livelihood missions like the Mukhyamantri Janajati Jeebika Mission, Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY).

• Infrastructure: Odisha has modernised existing Industrial Training Institutes (ITIs) and planned multiple Centres of Excellence (CoEs) equipped with advanced labs and tech-integrated classrooms for future skill sectors like AI, EV technology and robotics. 

• The government announced transforming 47 ITIs into Centre of Excellence with AI labs, enhancing industry relevance, providing advanced training, teacher upskilling and global exposure. 

• Impact: The state is expanding to four new campuses in Berhampur, Sambalpur, Rourkela, and Bhubaneswar, focusing on aerospace and agri-tech. This evolution ensures that the “Skilled-in-Odisha” brand remains a cornerstone of India’s journey toward Viksit Bharat 2047. 

Why Economic Survey Praised Odisha’s Skill Development Model?

• Decoupling from Demand Slack: It was specifically commended for addressing the “demand slack” in vocational education by treating skilling as an aspirational brand rather than a fallback option.
• Labour Domain Deregulation: Odisha was highlighted as one of only five states that removed restrictions on women working in a wider range of industries, directly linking skilling to legislative progress in gender-equal employment.
• Convergence with High-Tech Hubs: The model was praised for being “future-ready” by aligning with the India Semiconductor Mission. The survey noted that Odisha’s skilled workforce is being prepared for semiconductor projects worth ₹1.6 lakh crore, complementing national efforts with state-specific Fabless policies.
• Institutionalized Experiential Learning: The report cited the success of mapping nearby industries to ITIs to provide regular real-world exposure and experiential learning, which reduced the disconnect between classroom training and shop-floor requirements.
• Economic Structural Shift: The survey observed that while the services sector’s share declined, the 13.04% NSDP growth rate was significantly bolstered by this “new-age” technical workforce, which effectively turned human potential into a durable development dividend. 

Issues Hindering India’s Skill Development Efforts 

• Weak Translation of Training into Value: The central challenge is poor translation of training into “durable labour-market value.” Most programs prioritize enrolments and certificates over whether trainees secure stable jobs or sustained income gains.
• Massive Skill Mismatch: There is a significant disconnect between employer expectations and workforce potential. Approximately 80% of employers report difficulty finding skilled professionals, even as graduate employability remains low at roughly 42.6%.
• Low Placement and Retention: Standard flagship programs like PMKVY have seen placement rates as low as 18% to 23%. The survey advocates for shifting public funding away from training volumes and re-anchoring it around 6- to 12-month job retention and earnings growth.
• Weak Employer Participation: Skilling is often treated as a government welfare intervention rather than an industry-led process. The survey notes that employer linkage must be a “foundational design feature” where companies actively co-design curricula and provide on-the-job training.
• Aspiration Gap and Perception: Vocational training is still largely viewed as a social “last resort” compared to traditional academic degrees. This stigma, combined with outdated ITI infrastructure, discourages youth from pursuing technical trades. 

Recommendations for India’s Skilling Ecosystem

• Upgrading Diplomas to Degrees: To make vocational education aspirational, the economic survey recommends upgrading ITI diplomas to bachelor-level degrees. This aims to improve social prestige and allow vocational graduates lateral entry into higher education.
• Unified Apprenticeship Mission: The report calls for merging the National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Training Scheme (NATS) into a single unified scheme. This would reduce compliance burdens for industries and ensure closer integration between education and employment.
• Outcome-Based Funding: Public funding should be tied to long-term employment outcomes rather than just enrolments or certifications. Evaluation must track the trainee’s post-training trajectory, including job retention and earnings growth over 6–12 months.
• Replicating the “Odisha Model”: States are encouraged to adopt Odisha’s “Fix, Scale, Accelerate” strategy. This includes revamping ITIs into “world-class” institutes, using role-model campaigns like the 10-6-4-2 formula, and establishing global partnerships for advanced training.
• Early Skilling in Schools: To address the “skill deficit” (where 91% of adolescents have no formal skilling exposure), the survey suggests integrating formal skill education directly into school curricula to reduce dropouts and equip youth for the services sector.
• Strategic Sector Focus: Skilling investments should be calibrated toward high-growth drivers, specifically semiconductors, green hydrogen, and the gig economy. The goal is to build strategic resilience and integrate Indian workers into Global Value Chains (GVCs).
• Digital Public Infrastructure Integration: The survey recommends a “whole-of-government” approach by linking the e-Shram (unorganised workers), National Career Service (job vacancies), and Skill India Digital Hub platforms to create a unified data system for real-time monitoring of employment outcomes.