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2014-09-08

How Skilling can Change the Labour Dynamics in India

The education and training of a country\'s workers is a major factor in determining just how well the country\'s economy will do.

The labour market in India is undergoing a dynamic change. It is expected that over the next 15 years, 365 million people will be eligible to join the workforce. Over the next decade and a half, 11-13 million people are expected to look for employment opportunities each year. Despite this huge labour pool, the employability continues to be a major concern in India mainly due to the absence of a proper linkage between the formal education system and vocational training.
 
 
High school dropout rates (up to 56.8 per cent) and low turnout at the vocational training institutes add on to the challenge. Today, a mere 2 per cent of the Indian workers are formally skilled. In-service training is received by only 15 per cent of workers in the manufacturing sector. A significantly large bulk of the labour force in India - about 93 per cent works in the unorganised sector, without any formal training.
 
 
By 2025 India's population is expected to exceed that of China, making India the world's most populous country. Today if you look at the economic growth around the world since the industrial revolution, there is a certain level of parity being achieved in terms of technology and consumption patterns. What will make or break a country's future is the adequate supply of skilled manpower.
 
 
The education and training of a country's workers is a major factor in determining just how well the country's economy will do. Workers increase their earning potential by developing and refining their capabilities. The more they know about a particular job's function or the more they understand a particular industry, the more valuable they will become to an employer. While on the other hand, employers want workers who are productive and require less management. Hence it's imperative for all the stakeholders including government and industry, to work together for strengthening the skills ecosystem in the country.
 
 
For example - National Skill Development Corporation (NSDC) aims to skill around 150 million people by 2022 by fostering private sector initiative in skill development. This is part of the National Skilling Mission that targets to skill 500 million people by 2022. The 350 million outside NSDC's scope is being handled by 19 central ministries, i.e., Ministry of Labour, Ministry of Rural Development, etc.  
 
 
Demand & Supply Gap
 
The challenge with India's skill space is two fold - Demand side and Supply side:
 
 
Demand Side
 
According to our skill gap analysis for 22 high growth sectors, industry will require 347 million trained workers by 2022, to sustain its growth. With another 150 million that require up-skilling/re-skilling. The industry earlier did not have a say in forming curriculum, and setting standards, for the skilling program across the country. As a result, the majority of the students coming out of the system were unemployable.
 
 
Supply Side
 
There is a requirement of an eight fold increase in the existing capacity to train 500 million people by 2022. Almost 90 per cent of the students drop-out at different levels before they reach college. Majority of these students are unemployable due to lack of skills.
 
 
Finding Solutions
 
Identifying the challenges in the labour market, the Government of India formed a 'National Policy on Skill Development' in 2009, with a target to train 500 million people by 2022 by catalysing creation of large, quality, for-profit vocational institutions across the country. 
 
 
Training and assessment for the unorganised sector is of utmost priority in the current scenario and also for those who are at the bottom of the pyramid. The workforce in the unorganised sector is ever-growing and there are many reasons which contribute to this continuous growth. One is the rate of drop outs in schools which is about 88 per cent today. These students join the unorganised labour sector as they are not fully trained and skilled to acquire jobs elsewhere and hence year on year the number keeps on increasing.
 
 
The number further increases due to increase in the number of people who migrate from their homeland. A report says 90 lakh people migrate over 10 years in search of job. It is crucial for the industry and government to come together and keep a tap on this segment of youth. There is an urgent need to empower those in the unorganised sector through skill training and make them employable as per industry requirement and standards. Skill education and skill diversity need to lay importance on connecting skill education with livelihood, linking 91 per cent of the unorganised workforce and their traditional livelihood. The focus should be on skilling, up-skilling and re-skilling.
 
 
It is time that the industry and academia come together to address this urgent need in the country and design highly diversified skill training programmes for an efficient and prosperous India.
 
 
Organisations like NSDC is closely working with all the stakeholders including government and industry to develop a robust skilling ecosystem across the country. They engage with the industry to channelise their CSR fund into skilling ecosystem, and also provide an incentive to the skilled manpower and skill/up-skill their existing employees.
 
 
The Road Ahead
 
Going forward, the government should encourage more entities and corporates to enter into the skilling space. They have to work towards filling the gaps in the sectoral coverage of Sector Skill Councils while focussing on fostering innovation and the use of technology that could bring change, hopefully disruptive in nature, which could help in building scalable and sustainable skill development models across the country.
 
 
There is an unfinished agenda for skills. Increasing the annual output and outcome of the skills system, increasing the number of apprenticeships - the amendment of the Act,  reform of the employment exchanges - the national career service, implementation of the vocational loan credit guarantee scheme, the labour market information system, the roll out of the NSQF adoption of the National Occupation Standards and Qualification Packs developed by the SSCs and the creation of more,  the review and rationalising of schemes, the integration of the State Skill Missions into the national fabric, changing the image of skills and skilled workers, benchmarking our skills and qualifications to international levels, bridging the gap between what is taught to what the eco-system requires, these are also challenges we need to address going forward. 
 
 
We have choices to make. We need to articulate the role of government and the private sector.  It is clear that we need to work together and collectively address these issues. 'Honhar Bharat' i.e., Skilled India could be made a household call for action. This would mean a focussed, sustained and nation-wide advocacy campaign.  Two key phrases 'minimum government, maximum governance' and PPPP (People Public Private Partnership) have great importance for the skills space. 
 
 
The author of this article is Dilip Chenoy, CEO & MD, National Skill Development Corporation (NSDC)
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