NITI Aayog Urges Focus on Skilling as Services Employ 63.8% of Urban Karnataka

A new assessment by NITI Aayog has highlighted the urgent need to align youth education and training with Bengaluru's expanding services-led economy, pointing out that academic degrees are not consistently translating into job-readiness for the workforce.

According to the assessment, Karnataka's services sector employed around 1.02 crore people, representing 32.9% of the state's total workforce in 2023-24. This figure remains higher than the national average of 29.7%. The concentration is especially heavy in urban Karnataka, where services account for 63.8% of total employment, compared to just 17% in rural regions.

As Bengaluru drives the bulk of the state’s technology, finance, professional services, and research activity, the city has become the centre of a transition toward a more skills-intensive economy. The assessment mapped out the state's services employment distribution, noting that wholesale and retail trade accounted for 29.5%, transport and storage made up 14.1%, and information and communication comprised 12.7%.

Other key service segments include education at 9.3%, accommodation and food services at 7.6%, financial and insurance services at 4.3%, and professional and scientific services contributing 1.9%. To address these structural requirements, NITI Aayog recommended that Karnataka give greater priority to skilling in sectors such as information technology, financial services, healthcare, travel, and professional services, where employer demand is expected to remain strong.

The report emphasised that targeted training is particularly crucial for Bengaluru as the city continues to attract technology firms, global capability centres, startups, and research operations. With traditional degrees often failing to guarantee job-readiness, the assessment stressed the need for colleges, skilling institutions, employers, and the government to ensure training directly matches workplace needs.

In addition, NITI Aayog highlighted gender disparities, noting that care responsibilities, safety issues, and mobility challenges continue to prevent women from accessing training and employment. The agency recommended introducing flexible learning and work options, accessible training centres, career guidance, peer support, and enhanced transport and safety measures to help broaden the city's talent pool.