Skills and knowledge drive economic growth and social development of a country. Nations with higher levels and better standards of skilled workforce can deal with challenges and opportunities in the domestic and global market. India is one of the fastest-growing economies in the world. It is currently celebrating demographic dividend with two-third of 1.3 billion people under the age of 30 years. However, a big challenge lies ahead as estimates show that India has a very few skilled labour force. According to Organisation of Economic Cooperation and Development (OECD), over 30% of the youth aged between 15 to 29 years are ‘not in employment’ which refers to those who are not searching for jobs either due to unavailability or there are no jobs that match their skills. Despite the government’s initiatives to promote jobs, unemployment is turning out to be a new norm. This is because India is facing challenges at many levels. Skill India, that seeks to improve the skills of the Indians, is showing very limited results. This is because of the limitations that exist within the various government initiatives. It is necessary to address these issues so that India can become a $5 trillion economy.
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What is Skill India?
- Skill India, launched on July 15, 2015, is a comprehensive program to train and develop industrial, entrepreneurial skills among Indians.
- It is a major project that involves every segment of the Indian society, local and foreign companies and governments.
- It aims to train a minimum of 300 million skilled people by the year. 2022
- Every ministry of the Central government is involved in this massive programme.
- It is seen as the world’s largest initiative to train manpower in a single country or geographical location.
What are the objectives of Skill India?
The main objectives are as follows:
- To create opportunities, space and scope for the development of talents of the Indians.
- To develop sectors that have already been put under skill development for the past many years.
- To identify new sectors that require skill enhancement.
- To provide training to over 40 crore people in India in different skills by 2022.
What are the initiatives under Skill India?
The following initiatives were launched to attain the above-mentioned objectives:
- National Skill Development Mission was launched on 15th July 2015 (World Youth Skills Day) by the Ministry of Skill Development and Entrepreneurship (MSDE). It was launched to create convergence across various sectors and states in terms of activities related to skill development. It would, along with consolidating and coordinating the skilling effort, accelerates decision making across sectors to achieve quality skilling on a large scale. It would be implemented through a streamlined institutional mechanism driven by the MSDE. The institutional mechanisms for achieving the objectives consist of a Governing Council for the policy guidance at the apex level, a Steering Committee and a Mission Directorate (along with Executive Committee) as the executive branch of the Mission. The Mission Directorate is supported by:
- National Skill Development Agency (NSDA)
- National Skill Development Corporation (NSDC)
- Directorate General of Training
The seven submissions to achieve the Mission’s objectives are:
- Institutional Training
- Overseas Employment
- Sustainable livelihood
- Leveraging Public Infrastructure
- National Policy for Skill Development and Entrepreneurship 2015 is the policy that aims to create a skilling ecosystem on a large scale. Its objective also is to address the challenges of skilling with quality and speed so that the individuals can realize their full potential through life-long competencies gained through instruments like credit accumulations, creditable certifications etc. This policy links skills with improved employability and productivity.
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is MSDE’s flagship scheme that was launched to enable the Indian youth to take up skill training that is relevant to a specific industry. This, as a result, would enable them to obtain a better livelihood. The scheme caters monetary rewards for those who have completed the sanctioned training programme. Sector-specific skill councils like Agriculture Sector Skill Council, Food Industry Capacity and Skill Initiative (FICSI) etc. are established under this scheme. The key component of this scheme are:
- Short-term training
- Recognition of Prior Learning
- Special Projects
- Kaushal and Rozgar Mela
- Placement Assistance
- Continuous Monitoring
- Standardized Branding and Communication
- Skill Loan Scheme was launched with an intent to support the youth who are willing to take up skill training programmes within the country. This scheme has replaced the earlier Indian Banks Association (IBA) Model Loan Scheme for Vocational Education and Training. Any Indian who is taking admission in a course offered under the educational and training institutes that are recognized under this scheme can avail loans to pay for these courses.
- National Skills Certification and Monetary Rewards Scheme was launched by the Ministry of Finance as a part of Skill India. Its objective is to encourage youth to undertake skill development by providing them with monetary rewards for the successful completion of the approved training programmes.
Why do we need Skill India?
- The demographic dividend does not necessarily mean just people. Rather, it means skilled, educated and employable workforce. India has 54% of its total population below 25 years of age. This is a huge potential that remains unutilized for a long time now.
- Sectorial mobilization: More than 50% of the Indian population depends on the agricultural sector for their livelihood, though the returns and job opportunities are very low. Thus, the younger generation is shifting towards secondary and tertiary sectors. There is a need to improve the skills of these youth to make them employable in these sectors.
- The success of government initiatives like Make in India, Digital India and smart cities are dependent on this initiative.
- It is a necessary tool to address the current employment crisis faced by India.
- It can greatly enhance the livelihood of many Indians and can improve the economic growth and development of the country.
What are the features of Skill India?
- Through this initiative, the Indian citizens, especially the youth, can get easily get employed or launch their MSMEs.
- It provides training, financial and technical assistance for various trades to make the new participants competitive in the market.
- It also focuses on core sectors like construction, banking and finance, transportation and tourism and entrepreneurship.
- The training provided under the Skill India is of international standard. To improve it further, India has partnered with various countries and foreign educational institutes.
- The trained citizens are estimated to fulfil the demands for skilled manpower in the job market. This initiative also aims to train Indians in a way that would make them employable in foreign countries.
- An internationally accepted standard of training of the Indians living in rural areas is being undertaken under Skill India. This initiative is called Rural India Skill.
- The courses offered under this initiative consider various factors like age, location, native language and financial status.
- It trains people to improve their communication, behavioural, entrepreneurial and social skills and also management, troubleshooting and other related skills.
Were the government initiatives successful?
- According to the Centre for Monitoring Indian Economy (CIME), the unemployment rate reached 34% among the 20-24 year-olds in the first quarter of 2019 – it was 37.9% among the urban lot.
- At least 8 million new jobs seekers enter the job market each year. In 2017, only 5.5 million jobs had been created and this situation is worsening.
- According to the Periodic Labour Force Survey (PLFS) of 2018, the unemployment rate among the urban 15-29 year-olds was 23.7%.
- The existing unemployment crisis is due to the poor training of youth as only 7% of the people surveyed in the framework of the PLFS declared any formal or informal training.
- The current data suggest that in India, only 2.3% of the workforce have had any formal training as compared to 68% in the UK, 75% in Germany, 52% in the US, 80% in Japan and 96% in South Korea.
- According to a recent survey, 48% of the Indian employers have reported difficulties in filling the job vacancies due to the skill shortage.
- The CIME report also found that the more educated Indians are, the more likely they are to remain jobless, and the 2018 PLFS showed that 33% of the formally trained 15-29 year-olds were unemployed.
- The target of the Skill India mission was to train 300 million youth by 2022. But only 25 million were trained under this scheme by the end of 2018.
- This is partly due to the mismanagement and also due to the lack of spending of the available funds because of the deficiency of candidates.
- Even those who have been trained under the Skill India and PMKVY were unable to find jobs.
- The beneficiaries of the Skill India mission have increased from 3, 50,000 in 2016-17 to 1.6 million in 2017-18.
- However, the percentage of those who were able to find jobs upon completion has dropped from more than 50% to 30%.
- Under the PMKVY, only 15% of the beneficiaries were employed.
- The government had expected some of the PMKVY-trainees to create their own enterprise. However, only 24% of the trainees started their business and of them, only 10,000 applied for MUDRA loans.
Reasons behind this status:
- Training is insufficient to satisfy the demand in the job market. This resulted in very low employability.
- There is a very low enrolment in the skill development institutes like Industrial Training Institutes, polytechnics etc. This is due to the low awareness level among the young youth about the skill development programmes.
- This problem arose not only due to the lack of skills but also due to the lack of appetite of the industrialists and SMEs to recruit. This is due to the complicated and redundant labour laws that still exist in India.
- The limited access to credit and banks’ unwillingness to invest in new innovative ideas due to the increase in the NPAs and liquidity crunch of the NBFCs have created a negative impact on job creation.
- The economic slowdown and problems faced by various sectors like the automobile sector have led to numerous lay-offs.
What can be the way forward?
- This is a need for a defined, holistic approach to vocational education and skill development for both the short-term and long-term training courses to achieve the objectives of the Skill India programme.
- National Skill Development Agency (NSDA) is involved in research, evaluation, data analytics and international partnerships. However, the mere collection of raw data does not provide the needed insights and therefore, efficient handling of this division is a must.
- The mere use of international expertise and overseas concepts used by the developed nations cannot fetch the desired results. Therefore it is necessary to clearly understand India’s economic challenges, demographic parameters, heritage, culture, tradition and aspirations at the local level.
- Each economy has its unique strengths and weaknesses. This needs to be analysed before bringing in international solutions to address the job crisis.
- Development of entrepreneurial skills to all Indian citizens through education can encourage people to start their own enterprise instead of searching for a job.
- There is a need for recruitment of more Indian Skill Development Services officers who have the technical expertise and industrial experience to supervise the skill development process of the country.
- The skill development courses and training must be on par with the demands of the job market at local levels. There must be a continuous observation of the trends and development of the market so that the courses and training are at sync with the job market.
- Online learning system must be utilized to the full extent for the skill development in India.
- The education system in India must be made on par with the job market needs. Training must be provided to the students by involving the industry in all aspects of the syllabuses so that they are assessed and become competent during the time of the graduation.
- Skills on Wheel type of initiatives can be used to address the infrastructure and transport limitations. Example: Skill Trucks in Brazil provide skill development programmes at the rural and remote parts of the country.
- Industry participation in training and skilling must be ensured so that they provide the professional and experienced training to the emerging job seekers.
- Skill development alone is not sufficient to address the current problem. The government must provide opportunities for those skills to be utilized in the market.
- Certificates and qualification alone are not enough, rather, an employable human capital is vital.
- The government should cease creating centres for skill development and must be only a regulator while the industries implement skill development programmes.
- For providing the incentive, the government can provide tax and fiscal benefits for those industries that are willing to participate in the Skill India scheme.
Skilling India’s very large population is difficult but not impossible. Analysing the limitations and implementing necessary initiatives to address them can surely make “Skill India” dream a reality.
Examine the factors that limit the potential of Skill India. What can be done to address them?