As structural, demographic, and technological shifts transform the nature of work, new entrants to India’s labour force will have to be skilled and made employable.
Around 70 million people are expected to enter the country’s labour force by 2023. This will include 59 million young people below 30 years. Strategies for reskilling the current workforce, and formal recognition of informally acquired skills will, therefore, have to be reinforced.
Against this backdrop, India is driving unique initiatives to convert its demographic potential into a dividend that will fuel growth. At the same time, ageing populations in several developed countries present opportunities for the migration of skilled persons from India.
There are three major areas of skill development that needs to be worked upon.
Private sector involvement
Skill development faces several forms of market failures, including information asymmetries—a skilled person knows his or her skills, but a potential employer does not. This can be addressed through schemes like Recognition of Prior Learning (RPL).
Another market failure is private firms’ lack of incentive to develop the skills of its employees, as they can quit and join another firm.
These make a strong case for government intervention.
The not-for-profit National Skill Development Corporation (NSDC) was set up by the government in 2008 as a public-private partnership (PPP) to stimulate private participation in skill development. A core role of the NSDC is to provide long-term finance to organisations to build for-profit vocational training.
NSDC also works closely with India’s ministry of skill development and entrepreneurship (MSDE) to implement vocational training programmes. Here the infrastructure is set up by private providers and training costs are subsidised by the government.
NSDC has also incubated Sector Skill Councils (SSCs) for fostering industry connections and to develop an industry-relevant course and curriculum. There are currently 37 SSCs operational, with more than 600 corporate representatives in their governing councils.
India’s labour force above 30 years of age is 262 million people, of which 259 million are currently employed and need to be future-ready. As such, NSDC’s work has also used industry partnerships to drive reskilling and upskilling initiatives and to develop close collaborations with employers to prepare their workforce for new technologies and the future of work.
There is also a vast segment of informal workers in India, many of whom possess skills that have not been formally recognised. RPL interventions are critical in this scenario as holding a formal certification can improve an individual’s bargaining power.
Analysis of a household survey conducted by the Centre of Monitoring Indian Economy (CMIE) suggests that there are over 390 million individuals who have acquired skills informally—through self-learning, on-the-job learning, inherited skills or other sources.
Of these, a majority (384 million) are working people showing the scope for RPL and apprenticeship-related interventions. Both of these interventions typically involve collaboration with industry and the private sector, even when they are part of publicly-funded programmes or schemes.
India is committed to becoming the “skill capital” of the world and structured efforts such as the India International Skill Centre (IISC) programme are evidence of this.
A new, market-driven IISC network has been proposed to counsel and guide potential emigrants with a focus on skills tests, upskilling, language and pre-departure orientation. Further, the governments of India and Japan are cooperating to implement Japan’s Technical Intern Training Programme (TITP), an on-the-job training scheme providing 3-5 years of internship opportunities for foreign nationals in Japan, with NSDC as the implementing organisation.
Technical collaborations have been undertaken with countries such as the UK, Australia and the UAE for benchmarking and mutual recognition of standards.
Government-to-government and B2B partnerships are also being developed for new markets such as those in Western Europe, Canada, Australia and East Asia to increase the mobility of blue and white-collar Indian workers.
Estimates suggest that of the country’s labour force of 395.2 million, only 91.6 million are women. Skilling initiatives, complemented by a wider push towards empowerment through gender sensitisation, creation of economic opportunities, and economic and social support, can be used to raise this number.
Providing residential facilities for women trainees, embedding mentoring and coaching in skills programmes and providing social support through mechanisms such as local workshops have all been explored. Preparing women for forms of employment that are more attractive to them, such as the gig economy and its more flexible work models, is especially relevant, given that 229.2 million women (out of the 301.5 million who are not in the labour force) report their status as “attending domestic duties.”
Our progress so far in terms of creating access to skill development for women has been positive.
More than 50% of the candidates trained under the Pradhan Mantri Kaushal Vikas Yojana, a skill development initiative, are women. A significant number of women have also been trained in unconventional roles, such as in electronics and hardware.
On NSDC’s paid courses, women account for 40% of trained candidates. Here, too, women are increasingly enrolling for unconventional job roles, such as field technicians, organic growers, and automation specialists. Several training providers in our system focus exclusively on women and are promoting skill training in areas including digital and financial literacy, entrepreneurship, website design, 2D and 3D design, hardware repair and farm management.
Partnerships with industry to support women-centric projects in non-traditional trades have also been explored.
Many organisations are stakeholders in the skills development sector and have gained rich experience and knowledge from their work in the space.
The lessons they have learned from skills training provision and the implementation of innovative models must be used to take the sector to the next level.
We need the platforms to share this knowledge and these diverse perspectives. In addition, engaging with research organisations, academic institutions, think tanks and multilateral institutions that focus on education, skills and labour markets is critical if we are to build new initiatives and collaborations, deepen the knowledge pool on skills and facilitate the creation of institutional knowledge and capability.
This piece is published in collaboration with India Economic Summit. We welcome your comments at firstname.lastname@example.org.