Skilling India & Challenges

http://ijopaar.org/ijopams.php/; 2018 Vol. 1(1); pp.
17-22, ISSN: 456-4516
Skilling India & Challenges

Dr. Hilal Ahmad
Associate Professor, Department of Economics,
S.J.N. (P.G.) College, Lucknow University, Lucknow.
Abstract
India encompasses a huge challenge of the ‘Young India’ and will be self-addressed at the war
footing and could be a huge chance likewise to become ‘Developed Economy’ and do away with this
standing of ‘Developing Economy’. The demographic dividend is offered solely until concerning
2040, if the challenge of Skilling the Indian Youth isn't met inside following few years this once in an
exceedingly life time chance of demographic dividend are going to be lost. There’s a risk that India is
also unable to sustain growth in non-agricultural output and non-availability of proficient men could
lead to machines exchange labour on an oversized scale. This, in turn, can lead to declining
employment physical property of output going massive numbers among the more and more young
labour force idle. The idle youth force won't be straightforward to manage while not using them
usefully, and therefore the demographic boon can grow to be a curse.
Keywords: Challenges, Economy, Growth, Skilling.
1. Introduction
India’s economic growth rate changed from 3.5% per annum between 1950 and 1980 to 5.4% per
annum in 80’s and 90’s, some signs of a skills shortage was observed in 90’s. However, the policy
discourse on skill development has changed dramatically once the gross domestic product (GDP)
growth rate jumped to 7.3% during the Tenth Five-Year Plan period (2002-07) and around 8%
between 2008 and 2015. Despite sustained economic growth in the last three decades, India has not
generated decent employment and India’s growth has been termed as ‘jobless growth’. The Planning
Commission had acknowledged the fact that “the process of structural change in employment that one
would expect with a period of unprecedented growth in output in the economy outside of agriculture
is not occurring fast enough” [GoI 2013: 128, Twelfth Five Year Plan (2012–2017)]. The other
structural shift in the Indian economy is a demographic one, with significant implications for skills.
The increase in GDP growth has itself been partly driven by an increase in the share of working-age
population in total population. This demographic dividend comes but once in the life of any nation. It
is defined as the benefits derived from a rise in the ratio of working age (usually 15-59) to dependent
or non-working population (usually under 15 and over 60-year olds). When the share of population
above 60 years goes over 10% of the total population, the United Nations (UN) defines that society as
ageing. China’s demographic dividend will be over by 2015; India’s, is expected to continue till about
2040 [World Bank 2012].The benefits of demographic dividend come from the fact that as the share
of working-age population rises; they get work, earn incomes and save part of that income this leads
investment that brings in Economic Growth. It is this rise in the savings-investment ratio that is a
major part of the explanation of the high GDP growth story of India, though there are many other
factors.
Employment increased in the first half of the 2000s (1999-2000 to 2004-05) by 60 million, but it
hardly grew in the second half. Employment in manufacturing sector fell in the second half of the
decade (2005-10) by five million while in service sector it registered the increase of only four million
[Mehrotra et al 2012]. The realisation of full potential of the demographic dividend in the future will
depend critically for India upon both generating non-agricultural employment by upgrading the skill
levels of the existing as well training the growing workforce.
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The Eleventh Five-Year Plan document [Planning Commission, 2008], for the first time in the history
of Indian planning, introduced a chapter on skill challenges facing the nation. The increase in the
GDP growth rate has been one reason for emerging skill shortages in the Indian economy. Another
reason for the Skill Development programme has been that India is one of the youngest nations in the
world with more than 54% of its total population below 25 years of age. This necessitates that the
youth in the country are equipped with the skills and knowledge to enter the workforce through
education and training ... A large proportion of the products of the education system are found to lack
employable skills. [MHRD 2016b: 8–9]
2. Objective and Methodology
The objective of this paper is to evaluate the present government schemes and the challenges which it
is facing in skilling the Indian youth. The paper has focused the educational challenges which is the
biggest stumbling block in skilling India. This paper has also evaluated the employment need and the
impact of skill development programmes of government of India. This paper is based on secondary
data and the reports of Government of India and NSS sample survey.
3. Governments Strategy for Skill Development in India
To achieve 25 million jobs in next seven years, the current government has announced a National
Skill Development and Entrepreneurship Policy in 2015 that supersedes the GOI policy of 2009. The
GOI policy of 2009, believes that skill development is the shared responsibility of the government,
employers and individual workers, with NGOs, community-based organisations, private training
organisations and other stakeholders playing a critical role. The framework of entrepreneurship is the
core element of the government’s macro strategy, both for growth and skill generation. It wants to
encourage both self-employment and entrepreneurship as a viable career option. The finance
minister’s budget speech of 2013 made an interesting announcement: ‘A large number of youth must
be motivated to voluntarily join skill development programmes. I propose to ask the National Skill
Development Corporation to set the curriculum and standards for training in different skills. Any
institution or body may offer training courses. At the end of the training, the candidate will be
required to take a test conducted by authorised certification bodies. Upon passing the test, the
candidate will be given a certificate as well as a monetary reward of an average of Rs.10, 000 per
candidate. Skill-trained youth will give an enormous boost to employability and productivity. On the
assumption that 10 lakh youth can be motivated, I propose to set apart Rs.1, 000 crore for this
ambitious Scheme. I hope that this will be the trigger to extend skill development to all the youth of
the country.’
Following this announcement, the Standard Training Assessment and Reward (STAR) scheme in
India was launched with the objective to benefit 10 lakhs youth during the span of one year and the
scheme was to be implemented by the National Skill Development Corporation (NSDC), a public–
private partnership (PPP) initiative created by the Government of India to foster private sector
engagement in skill training. The aim of the scheme was to encourage standardisation in the
certification process and boost employability and productivity of youth by incentivising them for skill
trainings by providing monetary reward. The Sector Skill Councils (SSCs), which are industry-backed
bodies, were an important stakeholder in the implementation of the STAR scheme. In order to
standardise training as per industry standards, training was to be imparted on the basis of National
Occupational Standards (NOSs). These NOSs indicate the kind of job responsibilities that individuals
at the job market are expected to deliver. The SSCs, as part of their mandate, have mapped all the job
roles existing in their respective sectors and the NOSs for these job roles have been identified and
clubbed into what is called the Qualification Pack (QP). Thus, for every job role, there exists a QP and
STAR scheme required training to be conducted for specific job roles as per the QPs. The training
providers of the scheme could be government as well as private institutions implementing any
government-funded scheme or NSDC partners. Candidates can enrol for any of the course with any of
the affiliated training providers.
STAR the first skill development scheme to introduce monetary reward to beneficiaries, the scheme
became popular. The component of monetary reward had a positive effect in terms of generating
interest among training providers and students to join the programme. As an incentive mechanism, it
strikes a two-pronged approach to tackle the issue of mobilisation as well as ensure standardised
system of training delivery to make skilling programmes effective and inspirational.
The STAR scheme was re-launched in July 2015, by the MSDE as its flagship programme called the
Pradhan Mantri Kaushal Vikas Yojana (PMKVY). This is an ambitious programme to skill 24 lakh
youth in one year. The main working strategy of the scheme, just like STAR, is that it entails a
financial reward and a government certification on successful completion of training and assessment.
The manner in which this scheme has been launched is laudable and shows the commitment of the
government towards skilling the youth. The scheme has some promising features like training in
market relevant trades of National Occupational Standards (NOSs), training by the industry backed
SSCs (Sector Skill Councils), third party assessment, and direct fund transfer to beneficiary’s bank
accounts in a transparent manner. There is a new component on Recognition of Prior Learning (RPL)
under PMKVY, which was not present in the earlier STAR scheme. Under this RPL component,
candidates who have prior work experience without any formal training are also eligible to get
assessed and certified and avail of the monetary benefit.
4. Challenges in Skilling India
The challenge of skill development is not only skilling the new job seekers but providing the jobs
also. What all these schemes missed to achieve was the ultimate objective of skill development, which
is placement. The entire focus was on certification, which has its own risk of overriding quality if left
unchecked. The scheme supplied a group of students with quick skill certification, but it did not have
any mechanism to monitor the quality and relevance of training or to check whether the students who
were trained and certified were employable at all.
The monetary reward can perhaps be an effective tool for skill programmes only when it is linked to
the placement of skilled individuals and is backed by a transparent monitoring mechanism. Simply
put, monetary reward should be given to beneficiaries after they are placed in a job. The entire skilling
machinery in the country is being revamped such that placement of a skilled individual (wage or self)
is being recognised as the ultimate outcome of skill programmes.
The big challenge posed by the rapid economic growth and the rising share of working-age population
is that, the general education level of India’s labour force in the age group 15-59 is extremely low.
The total labour force in 2009-10 was 470 million. The labour force estimates of those aged between
15 and 59 years (the working age population) is 431 million. Of the labour force of 431 million
between the ages 15 and 59 in 2009-10 nearly 126 million or 29% of the labour force, are not even
literate. An additional 102 million, or nearly 24%, of the labour force either has below primary or
only primary level of education. [Computed from the NSS, 66th round, 2009-10]
In other words, well over half of the labour force between 15 and 59 years of age has extremely low
levels of education or none at all. An additional 17.6% had middle level education in 2009-10 and a
further 12% had attained secondary level education. In other words, the remainder of only 17% has
higher secondary and higher levels of education (including diploma/certificate, graduates and post-
graduation levels of education). The education scenario of India has not changed significantly in terms
of percentage if we take in numbers it has definitely increased with the increase in population the real
education has not increased even with the introduction of RTE (Right to Education). The literacy rate
may have gone up but it does not work when we are planning to skill the youth and reap the
demographic dividend for the economic growth. This low level of general education corresponds to
the continuing high share of those engaged in agriculture and even higher share of the total population
that lives in rural areas.
Economic growth should entail a transition of labour out of agriculture into manufacturing, non-
manufacturing industry and services (Mehrotra et al. 2012). Low levels of education in the labour
force, especially among those engaged in agriculture make it more difficult for the latter to move into
activities in urban areas, except as labourers in the construction industry.
The low level of general education makes it more difficult to provide vocational training to youth who
have not even completed elementary education (i e, until class 8). In other words, the challenge for
skill development in the Twelfth Plan was twofold. The first was that existing 228 million in the
workforce, or half of the current workforce, that is either illiterate or have only attended primary or
less education (who are likely to be functionally illiterate except for the ability to write their names),
must be ensured functional literacy and numeracy. Even though such workers have acquired their
skills informally, they should be able to get recognition of their prior learnt skills, for which there is a
provision now in the National Skill Qualification Framework (NSQF). The second challenge was that
all children between the age of 6 and 14 complete elementary education by the end of the Twelfth
Five Year Plan, as required by the Right to Education Act, 2009, this target is not achieved hence it is
a big challenge for the government to prepare this demographic dividend for the Economic growth of
the country. In other words the very concept of ‘Skill India’ gets defeated, if these children didn’t get
secondary level education & skill education simultaneously. These are primary issues which should
have been addressed before coming up with the idea of skilling Indian youth.
There are two major issues with the existing workforce which should also be considered before we
come up with another ‘Yojna’ for Skilling India. First, is the poor quality of the product who have
general education up to secondary level or those having vocational training this includes post-
secondary level technical education, this puts question mark on their skill ability and in turn their
employability. Secondly, the type of skills demanded by the market and the skills available in the
educated or certified skilled labour force, are no match to each other. As the Twelfth Plan document
states, there should be a focus on demand-aligned skill development in the country, and aim to step up
growth in employment in manufacturing, so that under-employed labour force can speedily move
from low-paid farm jobs to better paid, more productive manufacturing and service sector jobs. As the
flagship programme of the MSDE, PMKVY can act major driver for employment-driven training. The
scheme should be aligned with the objective of an outcome-based skilling programme where the
outcome is placement of an individual. The scheme already entails industry-designed trainings as per
National Occupational Standards (NOSs) and QPs (Qualification Pack). But an assessment of job
requirements against each of these QPs (Qualification Pack) should be conducted and prioritised
accordingly, so that the students trained against these QPs get gainful employment.
This demand-supply mismatch and the quality problem has to be addressed in near future otherwise
all the ‘Yojnas’ e.g. Start Up India, ‘Make in India’ etc will remain on paper and will have no positive
impact on the Economy. The MUDRA Yojna of the government was launched to finance the skilled
youth so that they not only become self-employed but also create employment for the others. The
demand-supply mismatch has created another kind of problem that is loan given to these skilled youth
under MUDRA Yojna has turned into NPAs (Non-Performing Assets) in large number which is
another area of research and is beyond the scope of this paper.
5. Conclusion
On one hand India has a big challenge of skilling and employing the ‘Young India’, which should be
addressed at the war footing on the other it is a big opportunity as well for the country to become
‘Developed Economy’ and do away with the current tag of ‘Developing Economy’. The demographic
dividend is available only till about 2040, if the challenge of Skilling the Indian Youth is not met
within the next few years this once in a life time opportunity of demographic dividend may be lost.
There is a risk that India may be unable to sustain growth in non-agricultural output and non-
availability of skilled manpower may result in machines replacing labour on a large scale. This, in
turn, will result in declining employment elasticity of output leaving large numbers among the
increasingly youthful labour force unemployed. The unemployed youth force will not be easy to
manage without skilling and employing them usefully, and the demographic boon may turn into a
curse.
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http://ijopaar.org/ijopams.php/; 2018 Vol. 1(1); pp.

17-22, ISSN: 456-4516