Business Today

The Skilling Enigma

The Skilling Enigma from the Editor Prosenjit Datta
twitter-logo Prosenjit Datta   Delhi     Print Edition: April 9, 2017
The Skilling Enigma

India's "demographic dividend" is often cited as a major reason for India becoming an economic superpower in the next couple of decades. The term refers to the fact that the country is in that sweet spot where the bulk of the population is in the working age group (15-64), and is expected to remain so over the next decade or more. By 2020, India is expected to have the world's largest population of working people, and the average Indian will be 29 years old compared to a 37 for China and US, 45 for Western Europe, and 48 for Japan. According to the labour ministry data, roughly one million Indian youth are joining the workforce every month.

The demographic dividend is expected to increase economic activity and production rapidly, thus increasing the GDP growth rates, and propelling India from the sixth-biggest economy in nominal terms to the third-largest economy by 2030.

But to reap the benefits of the economic dividend, India needs to create a lot of jobs - a point the prime minister has made many times. (And hence programmes such as Make in India, which is expected to eventually create a lot of jobs.) Equally, it needs to make sure that the youth joining the workforce are employable.

The latter is a fairly thorny issue. By some estimates, barely 9.3 per cent of the population joining the workforce have graduate degrees. Even among these, only a fraction is actually employable. Industrialists often grumble that Indian colleges churn out graduates and postgraduates, but most of them are incapable of the basic work demanded by a large company. More acute is the problem of the number of blue-collar workers. Here, in many cases, there is neither a basic college degree, nor any kind of skills that will make a person employable.

When the Narendra Modi government took charge in 2014, it created a new ministry - the Skill Development Ministry - with Rajiv Pratap Singh Rudy as the Minister of State with Independent Charge, specifically to look at the problem of skilling blue-collar workers. In the past three Budgets, roughly `6,000 crore has been allocated to the ministry. The goal of the ministry is ambitious - to skill 40 crore workers by 2022.

Since its inception, the skill development ministry has been busy trying to create the necessary ecosystem to provide skills to youth and also help them find jobs or create new professions. It is handicapped by the fact that India's education system at the school level is broken and the ITIs - the original institutes created to impart skills to blue-collar workers - often have obsolete equipment and redundant courses. Till last year, barely 17.58 lakh youth have been trained up, and 81,978 have found jobs through their flagship PMKVY (Pradhan Mantri Kaushal Vikas Yojana) scheme.

India's demographic dividend is real. But so is the prospect of the demographic nightmare if enough jobs are not created and enough workers are not skilled. Our cover this issue puts the skilling programme under the scanner.

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