Bridging the skill gap

India urgently needs coherent policy and regulation

The recent controversy over the nature of visas issued to Chinese workers working on projects in India should not be viewed as just another source of tension between India and the Middle Kingdom. It also reflects a rank failure on the part of the Indian government to develop a sufficient skill-base among India’s own blue-collar workforce. The fact that Indian companies, including government-owned ones, are compelled to import blue-collar labour that is skilled enough to handle high-tech tasks required in, say, metro rail construction and telecom projects is testimony to this. In that context, the inauguration of the National Skills Development Corporation (NSDC) earlier last week could be viewed as a positive development. NSDC, a 51:49 public-private partnership, has been mandated to skill 30 per cent of an overall target of 500 million people by 2022. If the agenda sounds impressive, however, it would be no understatement to say that it is also exceptionally ambitious given India’s current track record on skill development.

For one, there is no shortage of institutions offering vocational training both at central and state levels. Already 17 ministries impart vocational training to about 3.5 million people. India can boast over 1,200 polytechnics and more than 5,000 industrial training institutes — the bulk of them in the private sector. Over and above this are thousands of state-level training institutes and privately-run outfits. Despite this, India suffers serious quantitative and qualitative problems in labour skilling. As a Planning Commission assessment shows, 80 per cent of 12.8 million new entrants to India’s workforce every year have no opportunity for skills training. Even more worrying, only 2 per cent of the workforce have skills training and 80 per cent of the rural and urban workforce do not possess any “identifiable” market skills. It is true that basic literacy rates act as a hindrance since it is difficult to train functionally illiterate workers, as almost 40 per cent of India’s labour-force turn out to be.

But numbers are only part of the problem. The other part is the quality of the training for the few who are lucky enough to get it. As the burgeoning labour imports suggest, it is also the case that skills training is rarely synchronised with industry needs and is often skewed in favour of capital-intensive sectors. That apart, many institutes lack infrastructure (a problem endemic to India’s education sector in general), a failing that applies as much to government-funded institutes as to private ones, suggesting that the private sector is not necessarily a panacea for all problems. NSDC plans to address some of these issues by focusing its training agenda and using its institutional framework to regulate training quality.

But the solution to India’s skill gap does not, perhaps, lie in more institutions but in coherent policy, like those that China and Singapore have put in place, and stronger regulation. The urgency of skill development cannot be stressed enough. As the Planning Commission points out, India currently enjoys an unprecedented 25-year window in the form of a demographic dividend. The country boasts the world’s youngest population (media age: less than 24 to China’s 30). This can, however, easily become a demographic nightmare if economic growth is constrained by a shortage of talent.