More than half of India’s population of 1.3 billion is below the age of 25.<1> It is estimated that the average age of India’s population will be 29 by 2020, compared to 40 years in the United States, 46 years in Europe and 47 years in Japan. India’s demographic dividend may prove to be disastrous rather than a source of growth, as the country struggles to create sufficient employment opportunities, and adequately prepare its young workforce.
India is the fastest growing large economy in the world. The distribution of the benefits of India’s growth are highly concentrated, however, with 1 percent of the population accounting for 22 percent of national income and the bottom 50 percent accounting for just 15 percent.<2> For India to achieve equitable growth, one necessity is to enable the development of a workforce with employable skills and knowledge that can effectively contribute to and benefit from the nation’s growth.
It is estimated that there will be 104.62 million fresh entrants in the labour market by 2022. India’s low skill intensity, and low education attainment present a challenge.<3> Currently, the youth unemployment rate (15-24) is 10.1 percent. More importantly, 43 percent of India’s youth are not in employment, education or training.<4> India faces an immense task in preparing the workforce. Three things in particular are needed — meaningful industry participation in skill training programmes to ensure that appropriate and necessary skills are being taught, a clear standards and certification system, and an appropriately designed and implemented long-term skill development strategy.
There are a number of existing skill initiatives, including Industrial Training Institutes (ITIs), Vocational Training Institutes for Women, Advanced Training Institutes run by the Directorate of General Training (DGT) and Basic Training Centres and Related Instructions Centres by private firms or the government. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) of the Central Government, training conducted by several ministries and departments such as agriculture, housing and poverty alleviation, women and child development, commerce and industry, Bachelor of Vocation (B.Voc) and Diploma of Vocation (D.Voc) by the Ministry of Human Resource Development, among others.
Even with such multifaceted efforts, India has formally trained just 4.69 percent of the total workforce (15-59 years of age) of about 487 million people in India.<5> More strikingly, a report released by TeamLease Services last month shows that only 18 percent of the students that participated in vocational education courses got jobs, of which, just 7 percent are in the formal sector. More such studies should be undertaken by the government to assess vocational education and training in the country.
Where is the lacunae then?
First, a recent Sharda Prasad Committee (SPC) report identified “inadequate industry interface” as one of the major issues facing the vocational education and training system in India.<6> This is further supported by a 2008 World Bank report which analyses a number of government schemes.<7> Whilst it is important to create a vocational education and training (VET) ecosystem, industry’s role in this space cannot be overlooked. Without substantial input from industry in the design and curriculum of VET courses, the skills that are taught are often out of line with the needs of employers.
Megha Agarwal, founder of Leap Skills Academy, also points to the lack of industry involvement in Vocational Education and Training as one of the key challenges faced by the skill development sector today. This includes low involvement in delivery, management of institutions and curriculum design. Low industry participation in these aspects has created a situation where many participants in skills training programs remain unfit for employment after completion.
A study conducted by the IIM Bangalore found limited employer participation in Institute Management Committees (IMCs) which were set up in 2007-08 as industry bodies tasked with making decisions on the introduction of new courses, course curriculum, and appointment of trainers.<8> The report released by TeamLease Services found that the National Skills Development Council (NSDC) has not been able to synchronise course structures and curriculum with industry needs. More than 78 percent of students and 66 percent employers surveyed rated institutions and courses as average or poor.<9>
A new path needs to be delineated that will more effectively engage industry in the design and delivery of VET. The responsibility has to be borne by both the government as well as the private sector, it is futile to develop a VET ecosystem without industry representation.
Second, there is an urgent need for standardisation of certification of skills training in the country. At present, some 20 ministries run vocational training courses, along with DGT and NSDC. Due to lack of clarification of available programmes and provision of different kinds of programmes, there is a significant lack of trust among employers in the integrity and quality of training.
For standardisation of curriculum and certification, the government should delegate industry bodies to audit the Quality Packs under National Skills Qualification Framework to align them with industry needs. Quality Packs are a set of occupational standards, aligned to a job role, formulated by the industry-led Sector Skill Councils. Following which, there should be regular third-party audits to ascertain the adherence to NSQF by training institutes or providers.
Currently, the training partners are given targets to place students in jobs – they are required to place 100 percent of enrolled participants. Two prominent risks emerge from this model, first, is that this incentivises placing trainees in positions and with employers that may not match their interest or skills. Second, placement targets reveal little about the quality of skills and effectiveness of programs. Instead, industries should adopt a few ITIs (or any existing training institute), assist in curriculum development, train the students and eventually hire a share of participants.
Third, the national skill development strategy needs to take into consideration a number of issues, including the lack of evaluations and evidence of effectiveness of existing programs. In order to chart an effective path forward, rigorous assessments of existing efforts are needed.
In addition, a number of evaluations from other contexts reveal the gendered nature of skill training programmes. This has a number of long-term consequences, including re-enforcing gender wage gaps, as women are often encouraged to work in lower-paying occupations. India’s skill training ecosystem must find ways of bringing more women into the labour force, particularly in high-skilled, full-time, high-wage occupations. In a study published last year, Evidence for Policy Design (EPoD) surveyed over 2,610 former skill trainees in one of the largest government training programs under Skill India. They found that after training, male participants were 13 percentage points more likely to receive a job offer than females. Nearly one third of females did not receive a job offer compared to 15 percent of males.<10>
A further issue that must be considered is alignment of skill initiatives with youth aspirations and preferences. The above mentioned EPoD study found that 74 percent of those surveyed had dropped out of their job placement by the time of the survey (which was on average nine months after completion of the training course). Further, just 20 percent of those that had dropped out were employed in a new job.<11> This highlights the potential disconnect between the design of skill training programmes and the desires, aspirations, freedom and capabilities of participants.
Finally, despite the dominant approach of providing job specific skills, increasing attention should be given to skills that will allow individuals to adapt. Basic education is essential for realising this and enabling youth to achieve their full potential. On top of that, due to changes in the structure of the labour market, and increasing technological adoption, skill premiums can be found in soft skills, interpersonal skills, creativity and critical thinking. Moving forward these should be central to skill development strategies.
Given the extent of the employability challenge, India must find innovative ways of skilling and educating its population. The strategy moving forward must ensure that industry plays a key role in shaping skill development programmes. Further, certification of skills training in India must be standardised, in order to ensure the quality of delivery and trust among employers. Further, a long-term skill development strategy must account for persistent gender gaps in training and labour force participation, as well as youth aspirations and the need for solid basic education. For India to capitalise on its demographic dividend, and chart a path towards inclusive growth, India must find effective ways of skilling, up-skilling and re-skilling its rising youth population.
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Priyanshu Agarwal Student Member Centre for Law and Society Gujarat National Law University
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