THE SKILL DEVELOPMENT CONUNDRUM!!

ESSAY FODDER—the hindu

LACK OF SKILL DEVELOPMENT IN THE LABOUR FORCE: AN EXECUTION PROBLEM

PROBLEM:

For a country that adds 12 million people to its workforce every year, less than 4 per cent have ever received any formal training. Our workforce readiness is one of the lowest in the world and a large chunk of existing training infrastructure is irrelevant to industry needs.

REASON:

This is not as much due to lack of monetary investment as it is a predicament about grossly inefficient execution. The government already spends several thousand crores every year on skill development schemes through over 18 different Central government Ministries and State governments. The need of the hour is to improve resource utilisation and find solutions that can address the systemic and institutional bottlenecks constraining the sector.

A 3-FOLD SOLUTION:

1.       COORDINATION:

The government today does not even have a unified definition of “skill.” A 2013 paper of the Institute of Applied Manpower Research (IAMR) questioned the basis of government’s target of skilling 500 million people by 2022 without this definition.

Currently, there are at least 20 different government bodies in India running skill development programmes with no synergies and considerable duplication of work.

It is imperative that MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP [MSDE] performs the difficult role of “coordination relating to skill development” assigned to it.

The MSDE must explicitly be made responsible for coordination with the States and their Skill Development Missions.

2.      SCIENTIF APROACH TO POLICIES:

Existing skill gap studies fail to provide agile, actionable data and are rarely used in scheme designs. A good first step will be the development of a fully functional LABOUR MARKET INFORMATION SYSTEM [LMIS] that can provide an accurate statistical base for formulating and monitoring vocational training policies and programmes.

To justify investments, policies must be grounded in hard data.

Scientific monitoring and evaluation methods need to be incorporated in every programme to ensure just utilisation of resources.

3.      ENGAGING THE PRIVATE SECTOR:

While the government itself is a large employer, the primary focus of skill development is essentially towards private sector employment and entrepreneurship. So far, private sector itself has not geared up for the challenge. 

The World Bank Enterprise Surveys 2014 reveal that the percentage of firms offering formal training programmes for its permanent, full-time employees in India is just 35.9, compared to China’s 79.2. S. Ramadorai, Chairman of NSDA and NSDC, describes the situation as a “market failure” where the employers are not investing to skill employees, and employees do not have the ability and willingness to pay for skilling.

It is necessary to catalyse investments from the industry and support candidates in raising resources for training. This would need a functioning credit market with collateral guarantees for students, as well as planned coordination with the private sector.

For any skill development effort to succeed, markets and industry need to play a large role in determining courses, curriculum and relevance. For this, employers need to be put in the driving seat, with the government acting as a regulator and not the implementer.

Finally, the Union Budget 2015 paved way for the launch of a much-awaited National Skills Mission to complement Prime Minister Narendra Modi’s ‘Skill India’ and ‘Make in India’ exhortations. However, much work needs to be done on the ground for the government to prove that this step is a departure from rhetoric lip service.