An impediment to India reaping its demographic dividend is the lack of skill-preparedness of the youth entering the workforce. The competition for existing institutions will increase as India opens its education sector to foreign universities. There is unlimited growth potential from K-12 to higher education, and even in skill update programmes. Our guidance will help you recommendations pass all tests with flying colours.
The poor levels of skills are threatening to ruin India’s demographic dividend. Just around 2 percent of Indian workers are formally skilled. Net enrolment in vocational courses in India is less than half compared with China and a sixteenth of that in the US. More than 90 per cent of the labour force in India works in the unorganised sector and does not have formal training. In comparison, 96 percent of the workers in South Korea, 80 percent in Japan, 75 percent in Germany and 68 percent in the UK receive formal training in a particular skill. Vocational training could generate business worth $20 billion per year according to a report.
India will have more than 700 million people in working age by 2022, but only 200 million graduates. This puts a question mark over the employability of the rest. Also most Indians are reluctant to take up blue-collar jobs which would ensure them steady employment and income. Skill training the workforce would entail an expenditure of more than Rs 5 lakh crore. Realising this, the government set up the National Skill Development Corporation in October 2009 as a PPP initiative of the finance ministry and 10 industry bodies. It has been mandated to provide skill training to 150 million people by 2022 by catalysing private sector participation in sustainable training ventures in 20 high growth sectors and the unorganised segment, and set up Sector Skills Councils. NSDC-funded organisations have to ensure the placement of at least 70 percent of the trainees.
The sector has attracted diverse player including big names of India Inc, NGOs, educational institutions and social entrepreneurs. Accessibility to skill development programmes remains a hurdle. The benefits of the scheme are limited as most of the skill training focuses on in-house requirements of the company conducting it or is done with a CSR perspective. Government schemes with multiple certification systems add to the problems.
A McKinsey report covering nine countries, titled Education to Employment, found that 64 percent of Indian youth think conventional education is more valued by society. Most see little worth in pursuing vocational studies or skill development programmes.
Also, educators are more optimistic of a graduate’s employability compared to employers and youth. The report finds that a third of education providers are unable to provide job placement rates. Recruiters place less value on people with vocational training but lacking formal education.
According to a study, an impediment to creating a skills culture is the industry’s disinclination to create salary differential between skilled and unskilled or semi-skilled workers so that workers are have a reason to get vocational training. Even in-service skilling in India is among the lowest in the world. Many government and private sector skill development programmes do not take cognisance of the needs of the employers. This leads to a mismatch in terms of quantity, quality and qualification, resulting in disappointment for the job-seeker as well as employer.
The poor have shown a willingness to pay for good quality products and services. They would not mind paying for skill training if it ensures a job.
(Disclaimer: The information has been aggregated through secondary research. IFIE is not responsible for errors if any)