Most successful education systems concentrate on building a hierarchy of skills. Testing and certification available at each level facilitates upgrading and enhancement of the existing set of skills. Getting rid of poverty is about the abilities of people to make use of the economic opportunities available to them. Education is not just about teaching people a mysterious subject but equipping them with meta-skills — of language, record keeping, data entry and analysis that can be translated into many other skills. For, in a growing economy like India, such opportunities are definitely there: the issue is how to help people use these to increase their incomes. Whether it is wage employment or self-employment, improving incomes is about skills that people have. Fortunately, the present government is seized of the matter and its Skill Development Mission could be effectively leveraged to teach students skills that might help them earn a decent livelihood. Indian education system in general and higher education in particular has not been proved too efficient to make youths of our country employable according to the need of job market. Despite the increase in number of institutions at primary, secondary and tertiary level our young educated people are not capable of being employed and getting better job opportunities. Reason being they have not acquired specified skills essential for requirement of the job market. India is one of the youngest nation in the world with more than 62% of the population of the people is in the working age group (15-59 years) and more than 54% of the total population is below 25 years of age. This poses the challenges and opportunity. To reap the demographic dividend which is expected to last next 25 years. For this, India needs to equip its workforce with employable skills and knowledge. So that youth can participate productively to make India a developed country. The biggest challenges confronting us is low employability of our graduate passing out higher education state institutions. The argues on the supply side a huge skill gap has to be bridged while on the demand side, there is need for skill matching and the creation of opportunities. It also makes an attempt to critically examine the efforts being made by Govt. of India in this direction .This paper tries to address that like education skill development is also an important driver to address poverty reduction by improving employability and The lack of access to education and training or the low quality or relevance of training keeps the vulnerable and marginalized sections into the vicious circle of low skills and low productive employment.