All developed countries have focused on building the skills and knowledge of their population for accelerating economic growth and social development in their nations. India is in a sweet spot as far its demographics are concerned. As per the National Policy for Skill Development and Entrepreneurship, 2015, it was estimated that the average age of the population in India by 2020 would be 29 years as against 40 years in the US, 46 in Europe and 47 in Japan.
India has a great opportunity to supply a workforce to its industries and to the rest of the world. This is likely to attract foreign companies to set up industries in the country. The labour is affordable and the people are willing to work for longer hours than their counterparts in developed nations. The return of investment for a foreign company is much greater than it would be in other countries. In addition, English is one of the official languages, which makes it easy to work.
The Government of India, in the last few years, has taken positive steps to increase the ease of doing business, though there is still more to do along the lines of digitising land records, getting tax authorities to be more sensitive to foreign companies, reducing the cost of power, reducing GST, etc. It is working in the right direction. The unemployment rate in India as per the Centre for Monitoring Indian Economy is 15.4 per cent as of on June 20, 2020. In June 2019, it was 7.87 per cent. Such a high unemployment figure is not good for any growing economy and it can create social unrest.
The unemployment situation can be tackled by providing skill development training at a much faster rate than is happening in the last few years. The National Skill Development Corporation (NSDC) needs to wake up to the reality of the nation and work much better. Presently, only 2 per cent of the total workforce in India have undergone skill training. Three-fourths of the youth in the country have never enrolled for a skill development programme. The Prime Minister’s National Council on Skill Development recognised this fact and as an apex institution, aimed to skill 40 crore people by 2022 through its ‘Skill India’ programme.
The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is a great flagship skill training scheme of the Ministry of Skill Development and Entrepreneurship. The objective of this skill certification and reward scheme is to enable and mobilise a large number of youth to take up outcome-based skill training to become employable and earn their livelihood. The NSDC is the apex body to implement this scheme.
It appears the skills ministry and NSDC have had differences over the last few years. The ministry is also unhappy with the low percentage of placement of students under PMKVY, which is under the close watch of the Prime Minister’s Office.
According to the PMKVY website, in 2016-17, NSDC trained 5,57,000 people but placed only 63,000—a success rate of less than 12 per cent, against a requirement of 70 per cent. According to the Planning Commission, 85 per cent of the labour force in India has educational qualifications up to the secondary level, within which 55 per cent have an educational qualification only up to the primary level and a mere 2 per cent of the workforce has any vocational training. A lot of educated job seekers also are unable to find jobs or are settling for jobs below their capability and expectation. When we combine the first-time job seekers (level-1 skill), and upskilling and reskilling requirements, the need for skill training acquires enormous magnitude and unprecedented urgency.
The Federation of Indian Chambers of Commerce and Industry (FICCI) says, “The Indian skills ecosystem is maturing; and there is a strong intent from the new government to get all stakeholders aligned to the new ecosystem. However, coordination remains a key challenge. Clearly we need more action on the ground. We also need to identify skilling models that are workable at ground zero; learn from the practitioners who made a real difference and from projects that are innovative and scalable. The aim should be to create quality and productive employment opportunities.” Just providing skill training in itself does not solve the problem. It needs to lead to employment.
A model has to be implemented that provides skill training to the youth and then ensures they are placed in jobs in industries, or provided with micro finance to start a small enterprise. They can also be provided with business management consulting support to become viable. There is a need to build entrepreneurship in the country. It is extremely important to involve both public sector and private sector industries in every district where they are located.
It should be made mandatory for these industries to provide training and stipend to the youth who reside within a 25 km radius of the factory under the Apprenticeship Training Act and then provide them employment. This will also offer a skilled workforce to the industry. The skill training requirement is huge in India and the NSDC and other agencies need to work much faster, become more agile, responsible, accountable and transparent. It needs a leadership of those who are passionate about training and skill building.
Ashoke K Maitra
HR and Strategy Adviser to Industries
(ashoke.maitra@gmail.com)