Challenges to Skill Development in India

Skill development refers to all the efforts to improve the effectiveness and contribution of labor to the overall productivity as well as production, which lead the economy to a higher trajectory.

The skill development has been a hot topic in current times in our country. What triggered such focus? Mainly two things as follows:

  • Demographic dividend
  • Expansion of knowledge based economy

Demographic dividend was indicated by the changing demographic profiles of India vis-à-vis some other countries such as China. The changing demographic profile indicated that India has a unique 20-25 years window of opportunity. This opportunity comes to us because of increased ratio of young and working population, lesser dependency ration due to declining birth rates and improvement in life expectancy. More working people means more savings which, in turn, means more money for investments. As the number of working people grows, it also reduces the dependency ratio, which is the proportion of non-working population to the working.

The expansion of the talent based economy worldwide indicated that global economy is witnessing an acute shortage of skilled manpower.

Efforts till UPA-2 regime

On the basis of an 11th plan recommendation for creation of a comprehensive National Skill Development Mission, a Coordinated Action on Skill Development was envisaged in UPA-2 regime. In 2009, the government launched a National Policy on Skill Development to train 500 million people by 2022 by empowering all individuals through improved skills, knowledge and nationally and internationally recognized qualifications to gain access to decent employment and ensure India’s competitiveness in global market. It also aimed to increase produce workforce in organized and unorganized sectors especially among youth, women, disables, disadvantage sections.

In this way, a three tier institutional structure came up in India in last decade which had the following three tiers:

PM’s National Council on skill development

National Skill Development Coordination Board (NSDCB)

National Skill Development Corporation (NSDC)

In the above structure, the functions were as follows:

  • The PM’s National Council spelt out vision to create 500 million skilled people by 2022 through skill systems.
  • NSDCB was given the task to cooperate with a large number of central ministries, departments and state governments.
  • NSDC was charged for preparing comprehensive action plans and activities which would promote PPP models of financing skill development.

The National Skill Development Corporation was set up as a public-private-partnership project, and the then prime minister Manmohan Singh brought in S. Ramadorai, the then vice-chairman of Tata Consultancy Services Ltd, to be his skill adviser.

However, so far, India is marred with various problems in the skill development sector.

 Problems with Skill Development Programmes

  • The UPA regime is known for tedious governance structures. The biggest problem that occurred was of lack of coordination. Government was preoccupied with financing and implementation lost track. The Employment Exchanges, NCVT SCVT etc. were not utilized properly for training and information dissemination. The skill development programmes were implemented by ministries, departments and state governments. For example,
    • In UPA regime, 20 different ministries handled 73 different skill development schemes.
    • There was not centralized curriculum or certification.
    • NSDC was kept under the Finance Ministry. It had hardly succeeded in coordination among various ministries and departments.
  • Involvement of Industry and employers in the skill training structures (such as ITIs) is almost nothing. They could not be brought forward to proactively participate in the skill development. They were not brought forward because this would entail larger autonomy to institutions.
  • India has a fragmented vocational education system, managed by multiplicity of bodies under the NCVT, DGET and the SCVTs. Lack of coordination among them has resulted in ineffectiveness of any top down approach to skill development. The quality of vocational institutes is also low.
  • Funding of vocational education in India is restricted largely to government, where little attention was paid to quality. Once an institution begins to receive funding, subsequent funds are assured regardless of the institution’s performance.  Moreover, Education being a state subject, the implementation of any vocational; education would be in the domain of respective state governments. While the student fees in ITI’s/polytechnics go to the State treasuries, the institution itself does nothing to cater to the market requirements.
  • For now, far too much of young India learns on the job. It learns well but lacks the stamp of authority, and languishes in low-paid jobs or in the informal sector.
  • A large number of students with vocational education need to look for placement in private organizations or for self employment. The condition of private industrial employments and self employment are inferior in India in comparison to other countries. Subsequently, only a smaller fraction of students (~5%) opt for vocational education.

The Efforts under New Government : Separate Ministry

The incumbent NDA government has established a separate ministry for skill development. This central ministry takes the core elements from various ministries and pools them under one minister, Sarbananda Sonowal, and under one budget, which could be in the region of Rs 25,000 crore. In June 2014, the ministry had begun negotiations with two dozen ministries, however, most of them had apparently objected to losing their turf. The current position is as follows:

  • The 73 schemes remain (as of now) with the respective ministries and the skill ministry to work as coordinator
  • The new ministry will devise training curriculum in key sectors and issue certificates to trained personnel.
  • Three key agencies — National Skill Development Corporation, National Skill Development Agency and National Skill Development Trust — which used to be attached to the department of economic affairs under the ministry of finance are now under the administrative control of new ministry.

Whether the government will continue to fund individual ministries for skill development as it did earlier or, the new ministry finally gets a mandate of handling all skill development work across sectors, thereby trimming work assigned to other ministries—this question remains unanswered as of now.

Challenges to Skill Development in India

By 2022, India will have the maximum number of working age population in the world. The FICCI-KPMG Global Skills Report has noted that if properly skilled, they can contribute to economic growth. But there are many challenges to skilling in India. Some of them are:

  • Problem in Mobilization
  • Student mobilization to get trained has been a major concern due to the traditional mindset, low willingness to migrate, low salaries at entry level.
  • Issues in Employers’ Buy-In
  • The employer does not distinguish whether an employee has picked up skills on the job or he has acquired them through formal training,
  • Problems In Scalability
  • Scaling up aspirations to current jobs as well as getting the right kind of training partners and effective stakeholder management are important.
  • Mismatch between youth aspirations and jobs
  • Finding students to fill the classrooms and getting people to accept new kind of jobs have been difficult,
  • Ensuring Minimum Wages
  • At present, wages are linked with categorization of ‘skilled’, ‘semi-ski lied’ or ‘unskilled’, but these have to be aligned with skill levels defined as per National Skill Qualification Framework (NSQF) and recognition of higher level of skills in terms of minimum wages is noted.

What can be done?

  • With just about 2% of the country’s labour force having formal skill certification, government and industry must create pull factors to attract workers to get vocational training. For this, there is a need to create the macro and micro policies to encourage workers.
  • The government should include a minimum percentage of certified skilled work forces in the tendering process of every manpower intensive project and increase the minimum percentage every year.
  • At a local level, the industry can enforce it by ensuring that ancillary service providers like drivers, housekeeping and security staff have skill certification.
  • Minimum wages need to be re-looked and aligned to the levels defined in the National Skills Qualification Framework.