Constraints w.r.t. skill development programme

 Globally, manufacturing is increasingly growing and becoming technology oriented, highlighting the need for large pool of skilled labor in order to compete in world economy. This understanding is reflecting in the current government’s economic vision as envisaged in recent ‘make in India’ program which sees manufacturing sector as cornerstone of economy. However, realizing the demographic dividend by addressing the growing skills deficit of India’s youthful population poses a major policy challenge in form of structural and functional constraint:

Structural constraints

• Underdeveloped manufacturing sector in India have failed to provide impetus for skill development in India. Firms too have no incentive to improve their
• performance.
• Indian Economy is overwhelmingly dominated by the informal sector where majority of labour works in low skilled jobs.
• Widespread prevalence of poverty discourages pursuit of education for large section of population.
• The existing institutional structure consists of a plethora of agencies with overlapping and conflicting priorities. Skill development efforts are spread across
• approximately 20 separate ministries, and state governments and union territories. National Skill Development Agency was created to consolidate efforts in this sphere. But it mainly has a coordination role, lacks any effective power and remains significantly under-resourced.

Functional constraints

• India currently has an annual training capacity of 4.3 million, which is less than 20% of the industry requirement of 22 million skilled workers a year. This is breathtakingly paltry in the context of the central government’s target of creating a skilled workforce of 500 million by 2022.
• In addition, the infrastructure in the skill development sector today is largely government-owned while private sector investment hasn’t been incentivized, e.g. under South Korea’s job skill development programme employers received a rebate for training existing employees.
• Skill mismatch with the needs of the industry.
• Casual workers (who constitute 90% of the labour force), such as construction workers, often comprise workers from rural areas with little or no education and need support and training. Construction sector is likely to create over six times more jobs than the information technology and related services sectors by 2022. Yet the policy focus has generally prioritized information technology. Chinese government has launched specific initiatives at the local government-level to train unskilled and uneducated migrant labour for sectors like construction.
• The rural development ministry had been running skill development courses for a decade (national rural livelihood mission), which were mainly aimed at wage employment, with no quality assurance, no question of career progression or retention.

Indian government is soon going to revise its national skill development policy of 2009 which will be overseen trough the newly formed skills ministry. The institutional structure needs simplification with greater investment in training infrastructure and an emphasis on supporting a casual labour force. That needs to be accompanied with incentives for private sector participation too. We will need a lot of such initiatives and reforms to realize a vision as ambitious as ‘Make in India’.

By: ABHISHEK KUMAR GARG