Finance Minister Nirmala Sitharaman has warned that Indian companies are spending up to six months retraining recruits they believed were already qualified, and urged the HR industry to act decisively to bridge the skills gap.
“You recruit someone whom you think is qualified but then you spend six to eight months to actually prepare them for the job. We need not do that,” Sitharaman told business and HR leaders at the IFQM symposium in New Delhi on Thursday.
The minister said the persistent mismatch between academic qualifications and job-readiness was undermining productivity and slowing India’s growth ambitions. She pressed the HR industry to work more closely with government and educational institutions to align training with the realities of the workplace.
Employers, she noted, often report that graduates lack practical skills despite holding degrees. The result, she said, is costly onboarding programmes that delay the contribution of new employees. “Industry cannot afford to waste six to eight months preparing new recruits when they should be effective from day one,” she added.
Government initiatives underway
Sitharaman highlighted the government’s own initiatives to modernise skills development. Industrial Training Institutes across 750 districts are being upgraded, while specialised hubs for artificial intelligence training are being created. The Union Budget also proposed AI-driven skilling programmes to prepare young people for technology-intensive roles.
“We have an advantage of demographic dividend, but we have to provide them the right skills,” she said.
The minister’s message placed responsibility squarely on HR leaders to help shorten the transition from education to employment. She called for structured collaboration between companies, MSMEs, and policymakers to ensure that training pipelines generate job-ready talent.
She also urged industry to invest more aggressively in capacity expansion. Citing Prime Minister Narendra Modi’s track record of responding to corporate demands, she argued that the environment was conducive to investment and that hesitation from business should not delay India’s economic momentum.
“Engagement between government and industry should be ongoing through the year and not just before the budget,” she said.
Sitharaman’s remarks underscore the government’s concern that the demographic dividend could be squandered without effective workforce preparation. India produces millions of graduates annually, yet employers continue to cite gaps in communication, technical competence and applied knowledge.
For HR leaders, the warning was clear: qualifications on paper are no longer enough. By cutting the six-month training lag and ensuring young hires are ready to contribute immediately, HR and industry can help India accelerate growth and realise its ambition of becoming a developed economy under the Viksit Bharat vision.