Skill Development in India: Challenges and Issues

Skill Development in India: Challenges and Issues

• The 13th Federation of Indian Chambers of Commerce and Industry (FICCI) Global Skills Summit 2022 was recently inaugurated by the Union Skill Development and Entrepreneurship Minister.
• Theme: Making It Happen: Education to Employability.

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What is the Current Situation of Skill Development in India?

• According to the 2015 Report on National Policy on Skill Development and Entrepreneurship, only 4.7% of India's total workforce had received formal skill training, compared to 52% in the United States, 80% in Japan, and 96% in South Korea.
• A National Skill Development Corporation (NSDC) skill gap study conducted between 2010 and 2014 revealed an additional net incremental requirement of 10.97 crores of skilled manpower in 24 key sectors by 2022.
• Furthermore, the farm and nonfarm workforce of 29.82 crore people needed to be skilled, reskilled, and upskilled.

Issues:

Overburdened Responsibility:

• Phase III of the Pradhan Mantri Kaushal Vikas Yojana, which was launched in 2020-21 to provide skill development to over 8 lakh people.
• However, it suffers from an over-reliance on District Skills Development Committees, which are chaired by District Collectors and would be unable to prioritise this role given their other responsibilities.

Policy Process Discontinuity:

• The National Skill Development Agency (NSDA) was established in 2013 to resolve inter-ministerial and inter-departmental issues and to eliminate duplications of the Centre's efforts.
• However, it is now a part of the National Council for Vocational Training (NCVT).
• This reflects not only a break in the policy process, but also some obfuscation on the part of policymakers.

A Massive Number of New Entrants:

• According to a 2019 National Skills Development Corporation (NSDC) study, 7 crore more people between the ages of 15 and 59 are expected to enter the labour force by 2023.
• Given the sheer number of youth who need to be skilled, it is critical that policy efforts are adequate in every way.

Employers' Reluctance:

• India's joblessness problem is more than just a lack of skills; it also reflects a lack of appetite for recruiting on the part of industrialists and SMEs.
• The investment rate has declined as a result of limited credit availability due to bank NPAs, which has a negative impact on job creation.

Why is Workforce Skill Development Necessary?

Issues of Supply and Demand:

• On the supply side, India is failing to create enough job opportunities; on the demand side, professionals entering the job market lack skill sets. As a result, rising unemployment rates are coexisting with low employability.

Rising Unemployment:

• According to the Centre for Monitoring the Indian Economy (CMIE), India's unemployment rate will be around 7% or 8% in 2022, up from around 5% five years ago.
• Furthermore, the workforce shrank as millions of people dissatisfied with their job prospects left, a situation exacerbated by Covid-19 lockdowns.
• The labour force participation rate, which includes people who work or are looking for work, has fallen to 40% of the 900 million Indians of legal age, down from 46% six years ago.

Workforce Skill Shortage:

• While keeping up with job creation is one issue, the employability and productivity of those entering the labour force is another.
• According to the India Skills Report 2015, only 37.22% of those polled were found to be employable - 34.26% of men and 37.88% of women.
• According to Periodic Labour Force Survey (PLFS) data 2019-20, 86.1% of those aged 15 to 59 had no vocational training. The remaining 13.9% had received training in a variety of formal and informal settings.

Demand for Skilled Workforce:

• The Confederation of Indian Industry (CII) forecasted 201 million incremental human resource requirements until 2022, bringing the total skilled workforce requirement to 300 million by 2023.
• A large portion of these jobs were to be added in the manufacturing sector, with the National Manufacturing Policy (2011) aiming for 100 million new manufacturing jobs by 2022.

What are the different initiatives for skill development?

Pradhan Mantri Kaushal Vikas Yojana (Prakash Vikas Yojana):

• The flagship Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme was launched in 2015 to provide short-term training, skilling, and apprenticeship through ITIs.
• Under this programme, the government has trained over 10 million youth since 2015.

SANKALP and STRIVE:

• Other significant skilling interventions include the SANKALP programme, which focuses on the district-level skilling ecosystem, and the STRIVE project, which aims to improve the performance of ITIs.

Several Ministries' Initiatives:

• Twenty central ministries/departments implement nearly 40 skill development programmes. The Ministry of Skill Development and Entrepreneurship is responsible for approximately 55% of the skilling achieved.
• Since 2015, initiatives from all ministries have resulted in nearly four crore people being trained through various traditional skills programmes.

Mandatory CSR Spending on Skill Development:

• Since the implementation of mandatory CSR spending under the Companies Act, 2013, corporations in India have invested over 100,000 crores in a variety of social projects.
• Approximately 6,877 crores were spent on skilling and livelihood improvement projects. The top five recipients were Maharashtra, Tamil Nadu, Odisha, Karnataka, and Gujarat.

TEJAS Skill Development Initiative:

• TEJAS (Training for Emirates Jobs and Skills), a Skill India International Project to train Indians living in other countries, was recently launched at the Dubai Expo 2020.
• The project aims to train, certify, and employ Indians abroad, as well as to create pathways for the Indian workforce to be prepared for skill and market requirements in the UAE.

The Way Forward

• The most important aspect of our country's development is skill development. India has a large 'demographic dividend,' which means it has a large potential for providing skilled labour to the labour market. All stakeholders, including government agencies, industries, educational and training institutions, and students, trainees, and job seekers, must work together to achieve this.

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