The Odisha Skill Premium
In Tirupur, Tamil Nadu, textile employers are paying a wage premium for workers trained in Odisha. Not as policy. Because the quality is better. That fact, sitting quietly in a textile cluster 1,500 kilometres from Bhubaneswar, is worth spending some time with.
Founder, Majhi Group & Majhi OS
In Tirupur, India's textile manufacturing capital in Tamil Nadu, employers are paying more for workers trained in Odisha.
Not because of a government mandate. Because when asked, those workers do the job better.
"They understand the work better. They produce more. The discipline is different." That is what employers in Tirupur say when asked directly. The workers are sought after. They command a wage premium over comparable workers from other states.
This is happening 1,500 kilometres from Bhubaneswar, inside Tamil Nadu's textile economy, and almost no one in Odisha's public conversation is talking about it.
The question worth asking is: how?
Seven years
Between 2016 and 2023, Subroto Bagchi led Odisha's skill development mission. He writes about what he did and why in a book called When the Chariot Moved: How India Grows at the Grassroots. The book deserves more readers than it has.
The central problem Bagchi identified was not a shortage of training infrastructure. It was that nobody wanted to use what existed.
Skilled trades in India carry a specific stigma, not everywhere, but deeply enough to shape decisions. Parents who could influence their children toward electrician training, welding certification, or fitter apprenticeships often didn't. Not because the work was unavailable. Because the career felt like evidence of failure. The kid who couldn't get into engineering college became the electrician.
When the aspiration is absent, the training centre is empty.
So Bagchi worked on the aspiration problem first.
Campuses were rebuilt, not upgraded, rebuilt, as places that felt like they expected something of you. The difference between walking into a crumbling ITI and walking into a facility with real equipment and a professional environment is not cosmetic. It changes what a young person believes they are entering.
Uniforms were redesigned. A woman working on a lathe cannot safely wear a dupatta, it is not a dress code issue, it is a safety issue. Designing appropriate, well-fitted workwear for women in technical trades sent a message that could not be sent with a poster: you belong here, and the system has thought about you.
And then there is the story of a young woman, small, from a family with no industrial background, who came through the programme and became a locomotive engineer. Bagchi tells it. It is the kind of story that travels faster than any policy brief, because it answers the question that policy briefs cannot: can someone like me do this?
The jobs the models can't do
There is a reasonable amount of anxiety right now about what artificial intelligence does to employment. Some of it is legitimate.
But there is also a version of the argument that mistakes visibility for vulnerability. The jobs that are most visible to the people writing about AI, knowledge work, content creation, coding, analysis, are the ones getting the most attention. The jobs that are harder to see from a desk in Bengaluru or San Francisco are getting less.
The electrician wiring the data centre that runs the AI is not obviously automatable. The plumber maintaining the hospital is not obviously automatable. The fitter, the welder, the construction technician, the geological engineer in the field, the physical world still requires people who show up to it.
What Odisha's skill development programme was building, before anyone had a vocabulary for it, was a workforce with exactly the kind of embodied, contextual, physical competence that is genuinely difficult to replicate with software.
Whether or not you believe AI will transform white-collar work, and there are serious arguments on multiple sides, the case for skilled trades does not depend on settling that debate.
What Germany needs, Tirupur confirmed
Germany has a structural labour shortage in skilled trades. Australia is importing electricians. The Gulf's construction economy runs on South Asian workers. The demand is not speculative, it is chronic, documented, and growing.
The interesting thing about the Tirupur wage premium is not just that it exists. It is that it emerged without a strategy for it. Workers trained in Odisha's skill ecosystem started appearing in Tamil Nadu's textile clusters, performed measurably better than their counterparts, and employers responded by paying more for them.
That is a market signal. Markets are not always right, but when employers in a competitive manufacturing sector start paying premiums for workers from a specific state, they have observed something real.
The domestic version of this is already working. The international version, Odisha as a supplier of certified tradespeople to countries that cannot produce enough of their own, has not been seriously attempted yet.
What Odisha's minerals never did
Every tonne of iron ore that leaves Odisha's hills generates value somewhere else. The ore goes to the smelter. The steel goes to the factory. The finished product goes to the customer. Odisha captures a fraction of the chain, royalties, local employment, some infrastructure investment, but the majority of the value created from Odisha's resources is created outside Odisha.
This is not a complaint. It is the structure of resource extraction. It has always worked this way.
Skills work differently. A worker who leaves Odisha carrying internationally recognised technical training does not leave the value behind. The training goes with them. The wages they earn abroad come back in remittances. The reputation they build creates demand for the next Odisha hire. The employer who pays a premium in Tirupur calls the same training network again.
It compounds in a direction that iron ore cannot.
Odisha has been trying to figure out for decades how to capture more value from what its ground contains. The answer may have been above ground the whole time.
A state that can train people to standards that other states - and other countries - will pay premiums for is not a supplier. It is a source. That distinction is worth building toward.
See also: The Odyssey of Odisha, Beyond GDP: What a Developed Odisha Must Be Answerable For, Odisha's Untapped Potential
Sources
International Labour Organization: Skills for Employment: Global Demand for Skilled Trades
McKinsey Global Institute: India's Turning Point: An Economic Agenda for the Decade
Ministry of Skill Development and Entrepreneurship, Government of India: Annual Report 2023-24
Frequently Asked Questions
What is the Odisha skill premium and why does it matter as evidence?
In Tirupur, India's textile manufacturing capital in Tamil Nadu, employers are paying a wage premium for workers trained in Odisha's skill development programme. Not as policy, not as regional affirmative action. Because when asked, those workers perform better. 'They understand the work better. They produce more. The discipline is different.' This is a market signal from competitive manufacturing employers responding to observed performance differentials. It matters as evidence because it represents external validation, emerging organically across a 1,500-kilometre distance from a competitive employer base that has every incentive to hire the best available workers at the lowest cost. They are choosing to pay more for Odisha-trained workers because it is worth it to them.
What did Subroto Bagchi's skill development mission between 2016 and 2023 actually change?
The central insight was that the problem wasn't infrastructure, training centres existed. The problem was aspiration: skilled trades in India carry a stigma strong enough that parents actively steered children away from electrician training, welding certification, and fitter apprenticeships, associating them with academic failure. When aspiration is absent, the training centre is empty. Bagchi worked on the aspiration problem first. Campuses were rebuilt, not upgraded, rebuilt, as facilities that expected something of students. Uniforms were redesigned: a woman working on a lathe cannot safely wear a dupatta, so designing appropriate technical workwear sent a message that policy briefs cannot. Stories were cultivated: a young woman from a non-industrial background who came through the programme and became a locomotive engineer. That story answers the question policy cannot: can someone like me do this?
How is skilled workforce development different from mineral extraction as a value capture strategy for Odisha?
Every tonne of iron ore that leaves Odisha's hills generates value somewhere else. The ore goes to the smelter in another state; the steel goes to a factory elsewhere; the finished product reaches customers who create the final economic value. Odisha captures royalties, local employment, some infrastructure investment, a fraction of the chain. Skills work differently. A worker who leaves Odisha carrying internationally recognised technical training does not leave the value behind, the training goes with them. The wages earned abroad come back as remittances. The reputation they build creates demand for the next Odisha hire. The employer who pays a premium in Tirupur calls the same training network again. It compounds in a direction that iron ore extraction cannot: toward reputation, demand, and premium pricing that reinforces itself over time.
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