By-M.L.Dhar :India’s economy has been growing around nine percent for past several years, but this growth has not been inclusive to the desired level. One of the reasons for this has been the mismatch between the demand and supply of skilled manpower.
It goes without saying that a skilled workforce is the most valuable weapon in the global market. Despite two-thirds of the country’s workforce being in productive age group and India being among the top ten skilled nations in the world, ironically this demographic dividend has not been fully utilized. This is because majority of workers are either unskilled or under-skilled.
Skills increase labour productivity, a key element in the competitiveness of enterprises. It preserves and creates jobs. This is all the more important as globalization is not only changing the face of labour market bringing numerous advantages and opportunities, but also creating new competitive challenges for Indian companies.
India is blessed with a large young working population with almost 54 percent of population below 30 years. However, most of our workers have native talents and potential. Much of their skills come from ‘learning by doing’. Much of our workforce at the bottom rung has not had adequate schooling. Almost 44 percent of our labour force in 1999-2000 was illiterate and 33 percent had schooling up to secondary education level. Even at school level, vocational training has lost much of its focus.
Partly responsible for this the Indian mind-set which is oriented toward acquiring a formal university degree and not necessarily acquiring skills for greater employability. Consequently, those educated but without professional skills constitute 69 percent of the total unemployed. Out of all university graduates only a meager 13 percent are employable. Shri N.R. Narayana Murthy, Chairman and Chief Mentor at Infosys, holds all the stakeholders — the government, academia, industry and society responsible for this state of affairs.
According to the 2007-08 economic survey, 68.4 percent India’s population would be in the working age of 15 to 64 years in 2026, up from 62.9% in 2006. Other projections also indicate the emergence of a young India with 800 million in the productive age group by 2015 compared to 600 million in China. “For actual tapping of the demographic dividend, it is necessary not only to ensure proper health care, but also a major emphasis on skill development,” points out the economic survey and warns “if skills are not adequately created, India could well be facing a demographic nightmare.”
Agriculture sector continues to be the biggest employer providing livelihood to more than half of India’s population but this sector is projected to shrink as the economy grows and would no longer absorb additional labour. In fact, experts say that the workforce in agriculture would decrease by 4 million by 2015.
But 60 million job opportunities are expected in industry and services sectors during 2006-12 and 156 million during 2006-16. To make the workers employable and respond to the needs of growing economy, there is a need to impart them with varied skills to match supply with demand for skills.
Meanwhile, two factors are influencing employment growth. One, most of the growth in economy is taking place in new sectors especially across high-growth industries such as retail, financial services, telecom and aviation, which need new skills, and secondly, small cities and towns are witnessing appreciable growth requiring skilled labour. However, there are tremendous knowledge and skill gaps at all levels of jobs. This is more significant at the grassroots entry level, where too a large number of workers with vocational skills is required. Dr. C. Rangarajan, noted economist and Chairman, Economic Advisory Council to the Prime Minister has stressed upon identifying gaps in the supply of labour and provide training to make available the skills that are in short supply. “In fact, we need more technicians than engineers, more para medical staff than doctors,” said Dr. Rangarajan. The country’s educational system has to focus on vocational training and on producing quality professionals.
Better skills not only ensure better employment but also improve living standards of workers. It would also help in flexibility of labour from unorganized to organized sector and also mobility of labour across the national frontiers. Therefore, for employability workers need to be imparted with new skills and those already working to be re-skilled to enable them to retain their jobs and training for arming them with required skills has to be available locally.
The Prime Minster Dr. Manmohan Singh told the 41st Session of Indian Labour Conference that people could be turned from social liabilities to economic assets if they can be gainfully employed. “Investment in their capabilities, in workers’ education and training and investment in labour-intensive manufacturing are necessary to promote employment and workers’ welfare”, said the Prime Minister.
To address the inadequacies in the skills empowerment several initiatives have been taken by the government, the industry and the academia. Government has embarked upon National Skill Development Mission to train one million persons in the next five years and then one million every year. Under the Scheme training is provided in demand-driven short-term courses, which are based on Modular Employable Skills.
Moreover, Labour Ministry is implementing two schemes to upgrade existing Industrial Training Institutes (ITIs) to align them more closely with the needs of industry. Deviating from the past, public-private industry partnership is being actively sought in all aspects of training. It could prove path breaking in producing world class skilled workforce that would be employable even beyond national frontiers.
The Planning Commission has also ‘in-principle’ approved two new schemes for establishing 1500 new Industrial Training Institutes (ITIs) and 50,000 Skill Development Centers. These centers would greatly benefit workers in the unorganized sector by quantitatively and qualitatively certifying their existing and new skills. They would also make possible acquisition of additional skills in short modules. The new ITIs are likely to come up in far-flung and uncovered areas.
The Labour Ministry has prepared a draft “National Policy on Skill Development”, which is awaiting union cabinet’s approval. It would enable and anchor various initiatives as well as those by different ministries and promote a coherent skill training implementation strategy.
In an unprecedented confluence of efforts by various stakeholders, Confederation of Indian Industries (CII) is assisting the government in rolling out a modular employable skills program and identifying the institutes for carrying out this training programme for different sectors. Companies that have adopted ITIs include Ashok Leyland, Bharat Heavy Electricals Ltd., Bosch, Hero Honda, and Larsen & Toubro.
The IT majors have also come forward to bridge the gap caused by the industry-academia disconnect and have launched large training programmes for professionals to acquire right employable skills. They say that only a very small percentage is directly employable by industry from more than thirty lakh students and five lakh engineers who annually graduate. Besides beefing up their in-house training facilities, CII says companies and industry bodies are tying up with educational and training institute to make potential employees job-ready even before they enter the organization. Under this initiative CII is helping universities to integrate soft skills courses into the university curriculum. While Madras University has made a soft skills course mandatory for all undergraduate and postgraduate students, other universities in Tamil Nadu have included such coursework as part of their choice-based credit system. Banks and insurance companies too have started investing in creating industry specific manpower.
A 2006 Confederation of Indian Industries (CII) study covering 36 sectors has estimated that 80 million new jobs could be created in the next 10 years across India, of which 75% will require vocational skills. “These 80 million jobs are going to be created if the growth rate that various companies and industries are assuming actually happens,” it said.
Yet another study by Boston Consulting Group for PHD Chamber has estimated a 46 million-workforce deficit by 2020 while India would have an estimated surplus manpower of 47 million. India is at the threshold of a great opportunity. It has got to convert it to its advantage by giving education and skill development the due importance in the planning process.
This is a big challenge and would require an equally big effort. The present education system needs a radical change. Focus has to be on employable and professional skills corresponding to the needs of the labour market including industry.
As the economy grows and diversifies while incorporating latest technologies to remain competitive in an increasingly integrated global economy, the country needs workers with varied skills that would improve employability of labour and ensure workers a fair share of the gains resulting from rising productivity.