As developing nations grapple with youth unemployment, social inequality, and ecological degradation, vocational education models focused solely on skill acquisition prove inadequate for these complex challenges. This paper presents a theoretical framework for transforming vocational education into a strategic policy instrument for social innovation and sustainable entrepreneurship. Using an interpretivist methodology grounded in critical policy ethnography, the study analyzes policy frameworks and conducts semi-structured interviews with 23 students and 15 faculty members at vocational institutes in Rajasthan. The study proposes reconceptualizing vocational institutions as “social innovation hubs” that generate sustainable entrepreneurship solutions.