As the National Education Policy completes five years, it is an appropriate moment not just for celebration but for candid assessment. NEP 2020 was bold in its imagination; it called for flexibility, multidisciplinary learning, experiential education, and a decisive shift towards skills and employability. Few policy documents in recent decades have generated as much optimism about the future of Indian education.
Yet, five years on, a critical question remains unanswered: Has the promise of skills-based education translated meaningfully into workforce readiness? As the Union Budget approaches, this gap between policy intent and on-ground outcomes deserves urgent attention.
One of NEP’s most progressive ideas was the integration of vocational education and skills into mainstream higher education. In practice, however, skills curricula across institutions often remain peripheral, delivered as short-term certifications or add-on courses rather than embedded into core degree outcomes. While students may graduate with multiple certificates, employers continue to flag gaps in problem-solving ability, applied knowledge, digital fluency, and workplace readiness.
This disconnect is partly structural. Curricula in many fast-evolving sectors such as artificial intelligence, data analytics, cybersecurity, advanced manufacturing, and green technologies struggle to keep pace with industry realities. Faculty upskilling has not moved at the same speed as curriculum reform, and exposure to real-world industry environments remains limited for both teachers and students. As a result, skills education risks becoming theoretical rather than transformative.
Industry alignment, the second pillar of NEP’s skilling vision, also remains uneven. While partnerships between academia and industry have increased on paper, many are still limited to memoranda of understanding or guest lectures. Deep collaboration where industry actively co-designs curricula, defines competencies, and evaluates outcomes is still the exception rather than the norm.
Internships, a key bridge between education and employment, illustrate this challenge well. Too often, internships are short, unstructured, and compliance-driven, offering limited learning value. Small and medium enterprises, which employ a significant share of India’s workforce, are largely absent from formal skilling ecosystems due to lack of incentives, resources, or administrative support.
This is where the Union Budget can play a decisive role. The next phase of NEP requires a shift from policy articulation to execution architecture. Budgetary support must move beyond broad allocations and focus on outcomes, incentives, and institutional capacity-building.
First, there is a strong case for outcome-linked funding. Institutions should be incentivised not merely for enrollment or infrastructure creation but for demonstrable employability outcomes such as quality of placements, industry-recognised certifications, and sustained employer partnerships.
Second, industry-collaborated curriculum boards at the sectoral level can help ensure relevance and currency. Sector Skill Councils and industry bodies should be formally empowered to co-create credit-bearing courses that are updated regularly and aligned with labour market needs.
Third, faculty development deserves focused attention. Without continuous upskilling of teachers, skills education cannot succeed. Budgetary provisions for faculty sabbaticals in industry, funded training programmes, and global exposure can significantly strengthen classroom-to-workplace alignment.
Fourth, internships need structural support. Financial and administrative incentives for MSMEs to host interns, along with shared digital platforms for internship matching and monitoring, can dramatically improve access and quality.
Finally, India would benefit from shared national and regional skill infrastructure such as digital labs, simulation platforms, and applied research centres rather than fragmented, campus-specific investments.
India’s demographic advantage will only translate into economic growth if it becomes a capability dividend. NEP 2020 provided the framework for this transformation. The Union Budget now has the opportunity and responsibility to supply the execution muscle. The success of NEP’s next five years will not be measured by policy ambition but by how seamlessly classrooms connect to factories, studios, laboratories, startups, and shop floors across the country.
Vinay Maheshwari is Executive Director and Trustee, Mohan Babu University.