More than half of India’s population of 1.3 billion is below the age of 25. As per estimates the average age of India’s population will be 29 by 2020, compared to 40 years in the United States, 46 years in Europe and 47 years in Japan. India’s demographic dividend may prove to be a source of growth if the country creates sufficient employment opportunities and adequately prepare its young workforce.
It is estimated that there will be 104.62 million fresh entrants in the labour market by 2022. India’s low skill intensity, and low education attainment present a challenge. More importantly, 43 percent of India’s youth are not in employment, education or training. India faces an immense task in preparing the workforce. Three things in particular are needed — meaningful industry participation in skill training programmes to ensure that appropriate and necessary skills are being taught, a clear standards and certification system, and an appropriately designed and implemented long-term skill development strategy.
In fact, the government ambitiously envisages that India could become a supplier of skilled workers “exportable” to other countries, given four factors: the vast size of the youth population, their limited domestic employment opportunities, the shortage of skilled workers in developed countries, and the growing global practice of outsourcing.
However despite India’s projected demographic dividend and its abundant labor supply, it suffers from a serious shortage of skilled workers, because of their limited access to education and skills training and a large skills mismatch in the labor market.
Short duration courses (with no real skills) that provide low pay for suboptimal jobs cannot meet national/international standards. Vocational training must by definition be for a minimum of a year, which should include on job training. Short-term training should be confined to recognising prior learning of informally trained workers who are already working. This brings focus back on Industry Training Institutes (ITI) which provides long term skilling to youths in India.
ITIs were initiated in the 1950s. In a span of 60 years, until 2007, around 1,896 public and 2,000 private ITIs were set up. However, in a 10-year period from 2007, more than 9,000 additional private ITIs were accredited. At present India has more than 13,000 ITIs, of which 85% are run by the private sector and 15% are Government-funded. All ITIs put together have 25 lakh seats per annum, just a fourth of the requirement of training one crore youth a year. It is estimated that from 2013-22 there will be an incremental demand of 10 crore skilled workers. Hence, the task is to skill at least one crore people every year.
However ITI ecosystem has its own woes which needs solution. Though the present capacity of ITIs is very low compared to the demand, the quality of training imparted is pretty low, as a result of which even the employability is extremely poor. Private sector engagement has been taken up by standalone private training partners and not employers. The latter could have made the system demand-driven.
Sharda Prasad Committee report identified “inadequate industry interface” as one of the major issues facing the vocational education and training system in India. This is further supported by a 2008 World Bank report which analyses a number of government schemes. Whilst it is important to create a vocational education and training (VET) ecosystem, industry’s role in this space cannot be overlooked. Without substantial input from industry in the design and curriculum of VET courses, the skills that are taught are often out of line with the needs of employers.
A study conducted by the IIM Bangalore found limited employer participation in Institute Management Committees (IMCs) which were set up in 2007-08 as industry bodies tasked with making decisions on the introduction of new courses, course curriculum, and appointment of trainers in ITI.
A new path needs to be delineated that will more effectively engage industry in the design and delivery of VET. The responsibility has to be borne by both the government as well as the private sector, it is futile to develop a VET ecosystem without industry representation.
Finally, despite the dominant approach of providing job specific skills, increasing attention should be given to skills that will allow individuals to adapt. Basic education is essential for realising this and enabling youth to achieve their full potential. On top of that, due to changes in the structure of the labour market, and increasing technological adoption, skill premiums can be found in soft skills, interpersonal skills, creativity and critical thinking. Moving forward these should be central to skill development strategies.