The Union Budget is upon us once again, and as the government looks for measures to boost growth it will do well to remember that economic growth cannot be sustained without quality human capital.
2020 is here - the year that will see India at the cusp of experiencing a demographic dividend. This means that around one-third of the country’s population will be under the age of 35, allowing it to boast of one of the world’s youngest population, and by implication, one of the largest workforces globally. While this presents an excellent opportunity for India to reap rich dividends in terms of economic development, we find our capacity to achieve this hampered by a grossly under-skilled workforce.
While the majority of the youth population in the country maybe literate, it is severely unemployable. The UNDP India Skills Report 2018 stated that employability stood at just over 45% in 2018. Alarmingly, the OECD Economic Survey: India 2017 claimed that more than 30% of Indians in the age group of 15-29 years are neither employed nor are pursuing any education and training. For India to grow to its potential in real terms, this Goliath of a workforce must be properly trained and up skilled to match up to the employment demands of the industry.
The Skill India Mission launched by the Indian government aims to train around 500 million people by the year 2022, in a bid to maximize benefits from our ‘youth bugle’. And yet, this is far easier said than done. If skill development is the stairway that is to take India from a developing to a developed nation, the government cannot work single-handedly, for it does not have the resources, nor the budget, to train the entire emerging workforce.
According to the National Sample Survey, of the 470 million people of working age in India, only 10% receive any kind of training at all. And according to an official skill gap analysis, well over 400 million people need to be up-skilled or re-skilled across 24 sectors by 2022. In comparison, the government is only able to train 3.1 million each year.
The extent of the skills deficit and the uphill task ahead ought to be a Mayday call for stakeholders across the board to work in tandem to ensure the success of the ‘skilling’ solution, a process in which private corporates will have to play an indispensable role. In fact, greater integration of industry in skill development programs is imperative, not least because merely imparting a skill doesn’t translate directly into the generation of a livelihood. Even now, with most skilling courses delivered by vocational training institutions, there lies a chasm between the quality of labour supply created and that being demanded.
Companies are always looking for individuals with cutting-edge skills, rooted in a knowledge of the most recent developments and trends in the real world. Therefore, there is an urgent need to revise the strategy and the lifecycle of our skilling schemes to ensure parity with market requirements. Greater end-to-end participation by companies, particularly in areas such as curriculum design and training, can ensure that skilling is market driven. It can also reduce the risks involved in implementing skilling programs on a largescale and is likely to lead directly to the creation of more valuable, employable individuals.
One of the ways to make it easier for companies to engage more in skilling programs is to include skill development programs in the corporate social responsibility (CSR) mandate. This will warrant that companies are driven enough to actively participate without agonising about the expenses hurting their bottom line. This would also give companies the opportunity to conceptualise and deliver training programs that align with their business and use such programs to create a pool of skilled workers that could be potential future employees.
Offering the right incentives to companies to participate in ‘skilling’ initiatives will bring more finances, expertise, technology, knowledge and on-ground implementation solutions to the table. The writing seems to be on the wall that for its ‘skilling’ silver bullet to hit Bull’s Eye and help avert a demographic disaster, the government may have to bite the bullet and seek greater private participation.