India, Aug. 27 -- In a bid to address persistent gaps in India's labour market, NITI Aayog has proposed linking government funding for skilling programmes to verified employment outcomes. These outcomes include job placements, employment retention and wage growth.

In its recent report, Reimagining Skilling for Viksit Bharat@2047, the think tank cited Skill Impact Bonds as an example of a "pay-for-results" model. Under this framework, private institutions finance training programmes upfront and the government reimburses them when they meet predefined employment benchmarks.

The proposed shift, if implemented, would introduce greater competition among training providers, as funding would follow outcomes rather than the number of students s...