For decades, India's workforce debate has been organized around one question: how do we train more people? Missions have been launched, targets set, and progress counted in enrolments and certificates. Underneath sits an assumption — that skills are scarce.
For millions of workers, the binding constraint is different. They already possess economically valuable competence that employers cannot reliably observe, verify, or price. A laboratory technologist with ten years of diagnostic experience and a weekend-certificate holder can present near-identical paper. When employers cannot tell the difference, they pay for neither — they price both the same, at whatever the market will bear for the weaker one.
That is not a skills gap. It is a skills visibility gap — and closing it requires market infrastructure, not just more training volume.
The Missing Middle of the Skilling Story
Most workforce programmes rest on a linear theory: training leads to skills, skills to employment, employment to higher income. Real labour markets do not work that neatly. Between training and economic returns sit institutions that the theory quietly assumes into existence: assessments that measure real competence, credentials that carry that signal, verification systems that let an employer trust it, and matching mechanisms that connect it to a job.
When any link in this fuller chain is missing, training produces certificates without producing mobility.
The scale at stake is substantial. Our analysis of three service sectors — healthcare, education, and financial services — estimates that they employ roughly 23.6 million workers, about 69% of them informally, with some 1.59 million new graduates entering these sectors every year. Most of those workers already hold some qualification. The question is whether the market can read it.
What Invisibility Looks Like: Allied Healthcare
Consider the professionals who run India's diagnostic and rehabilitative backbone — laboratory technologists, radiographers, physiotherapists, dieticians, emergency care technicians, and health information professionals. In 2021, Parliament passed the National Commission for Allied and Healthcare Professions (NCAHP) Act, granting statutory recognition to 56 professions across 10 categories and requiring every state to constitute a State Allied and Healthcare Council within six months.
Recognition on paper has not yet become visibility in the market. In 2025 — four years after the Act — the Commission was still directing 22 states and union territories to constitute or reconstitute their councils, and at least 11 councils had been constituted in deviation from the Act's own composition rules, including medical doctors rather than allied health professionals appointed as chairpersons. Uttar Pradesh created its council in 2021 but appointed its chairperson only in July 2025, and its remaining nominated members in April 2026 — five years from creation to a fully constituted regulator[1]. National standards are similarly mid-built: by April 2026, 17 competency-based curricula had been released, covering roughly half the recognized professions.
Where statutory visibility is incomplete, unofficial signals fill the vacuum. When we mapped the institutional ecosystem around these professions across five states and the national level, we identified 76 bodies engaging with allied health professions — associations, societies, training providers, and self-described councils. Only ten had statutory standing under any law, and only five were the State Allied and Healthcare Councils the Act envisages. Several non-statutory bodies use “council” in their names; some cite MSME registrations, general-purpose society law, or even non-existent statutes as evidence of regulatory authority. None of this confers the power to regulate professions or award recognised qualifications — but an employer, a student choosing a course, or a patient cannot reasonably be expected to know that.
This is a textbook market for lemons — the same information asymmetry George Akerlof famously described in used-car markets, now playing out in India's labour market. An employer in Patna or Lucknow cannot cheaply distinguish a rigorous credential from a purchased one, so the rational response is to discount all credentials equally. Competent workers get underpaid, undertrained practice persists, and every rupee invested in training leaks value at the point of verification.
Visibility is Infrastructure — and India has Built It Before
The nursing sector offers a working precedent. The Indian Nursing Council's Nurses Registration and Tracking System gives nurses a nationally verifiable unique identity while preserving the registration authority of state councils. It did not replace the regulatory system; it made the system legible.
An equivalent for allied health does not require parallel registers or testing every profession at once. It requires strengthening state council registration workflows, piloting digital credential verification in a small number of priority professions and designing data to flow into the national registry architecture that already exists. It also requires sequencing honestly: states with functioning councils can move towards digital integration now, while states whose councils remain non-compliant need governance foundations first. Uniform national rollouts stall at the weakest link; tiered approaches compound.
What Funders and Policymakers Should do Differently
Three shifts follow — and none of them is “train harder.”
First, fund the market, not only the training. Assessment capacity, credential verification rails and registries that employers actually query are higher-leverage investments than another round of training volume.
Second, measure differently. Certificates issued is an output metric. Credentials verified, employer queries against those credentials, and the wage premium attached to verified competence are outcome metrics — the signs of a talent market that actually works.
Third, sequence by institutional maturity. Differentiated support — anchor states demonstrating what good looks like, others mentored towards compliance — outperforms uniform mandates.
The payoff goes beyond individual wages. When competency becomes visible, employers can match people to roles more efficiently, workers have stronger incentive to invest in skills than market value, and training institutions receive clearer signals about what employers need. Visibility, in other words, is also productivity infrastructure.
The Dividend Depends On It
India rightly describes its young population as an economic advantage. But a population becomes a dividend only when capability translates into productive, fairly rewarded participation. The uncomfortable proposition is that India may not have a shortage of talent so much as millions of people whose talent is economically invisible.
Training built the skills. The next reform is making them visible — trusted, portable and priced. That is not another training programme. It is market infrastructure, and for funders looking for the highest-leverage rupee in workforce development, it is the one still sitting on the table.
Evalueserve's Social Impact Practice works with foundations, development agencies and public institutions on workforce, health systems and impact measurement across South Asia and Africa.
[1] Office Memorandum No.-I/1293849/2026/71-4099/192/2021, Medical Education Section-4, Uttar Pradesh State Allied and Healthcare Council UPSAHC_NOMINATED_MEMBERS09Apr2026.pdf
