| Abstract: |
This study examines the empirical relationship between skill development, workforce productivity and regional economic growth across India, using a fixed-effects panel framework applied to a district-level dataset compiled from secondary sources including the Periodic Labour Force Survey, NSDC skill-gap reports and state economic surveys. The paper builds on a well-established human-capital tradition, yet it departs from purely descriptive treatments of India's skilling ecosystem by quantifying, region by region, how far formal skill training translates into measurable gains in labour productivity and net state domestic product. Descriptive statistics across twenty-eight sampled districts reveal wide dispersion in the Skill Training Index, ranging from 19 to 84 points on a 100-point scale, alongside comparable dispersion in labour productivity. Regression estimates confirm that the Skill Training Index is the single strongest predictor of productivity (β = 0.417, p < 0.001), ahead of schooling, firm size, infrastructure and urbanization. Sectoral analysis further shows that IT/ITeS carries a skill-gap index almost three times that of construction or agro-processing, while regional comparisons expose a stubborn western-and-southern versus eastern-and-north-eastern divide in both skilled-workforce share and growth outcomes. The discussion situates these findings against comparable work from the ILO, OECD and World Bank, arguing that skill policy in India remains too centrally designed and insufficiently tuned to regional labour-market structure. The paper concludes that closing sectoral and regional skill gaps, rather than merely expanding aggregate training numbers, is what will determine whether India's demographic dividend converts into durable productivity growth. |
