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Will Skilling the Youth Save India?

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“The more we give importance to skilling, the more competent our youth will be.” – PM Narendra Modi

On the occasion of National Youth Day, i.e., January 12, 2021, our honourable Prime Minister Narendra Modi, laid emphasis on the significance of skilling and reskilling of the workforce. He shed light on the importance of achieving the goal of becoming ‘Atma Nirbhar Bharat’ by learning new and useful skills.

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It is true that in today’s India, only skilled individuals would grow!

picture credit: TheHansIndia

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To raise awareness about skilling, schemes like Skill India Mission and Going Online as Leaders have been introduced recently. The main motive of the Indian government through these programmes was to improve the level of skill among the youth.

However, in the real scenario, India is in the charts of leading countries with a skilled workforce. But looking at the other side of the coin, there lies the major problem of unemployment in the country.

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In India, unemployment worsens for those who have educational qualifications.

Major challenge of skilling India

As per the data released by The Indian Express, the unemployment rate in India between January to April 2021 was 6.83%. It becomes evident that youth with graduation and higher levels of education face almost three times the unemployment level. With the unemployment rate over 19 per cent, one in every five youth who has graduated is unemployed. It is almost as if you get penalised by the economy for getting educated.

Indian companies face an acute shortage of skilled manpower whereas, on the other hand, the country has a myriad of educated youth that is unemployed.

What explains this oddity? The lack of skill.

The recent COVID-19 pandemic has increased the need of equipping the youth with the required skills. While the public and private organisations are working to put the economy back on track, recent trends show that skilling and reskilling our Indian youth will be more important than ever.

Today, we are in a situation where it is imperative to understand that this is not a short-term situation, rather we have entered a new world that arouses the need to fight against this crisis.

What is the scale of the skill challenge facing India?

A report of NCAER of 2018 shows that 468 million people constituted the workforce of the Indian population. Out of which 92 per cent belonged from the informal sector and 31% were illiterate. 13% had primary education and only 6% were college graduates.
Further, only 2% of the workforce had formal vocational training and 9% had informal vocational training.

Additionally, more than half a million final year bachelors students (aged 18–29) who were surveyed were found to be “unemployable”.

What is at stake?

If the skilling issue is not resolved, India will renounce its “demographic dividend”.

The population structure of India is rapidly changing. India’s working-age population is growing faster than the juvenile and old dependents population. In the year 2020, the proportion of working-age and that of dependents was 50-50. Further, between 2021-2040, this preparation will be more favourable to India.

But will this turn into a demographic dividend? Well, it depends entirely on how many of those in the working-age bracket are working and becoming prosperous.

But why is India stuck with low levels of skilling? We know that Indians have excelled in technical expertise at the global level; be it medicine or engineering. Then what explains India’s domestic skilling paradox?

The problem lies in the starting condition.

90% of India’s workforce is in the informal sector. As per NCAER, India is trapped in a vicious cycle: greater workforce informality leads to lower incentives to acquire new skills.  The inadequacy of the skilled workers results in businesses often choosing to replace labour with machinery. The simple notion is – skilled labour and technology are complementary, but unskilled labour and technology are substitutes which in turn leads to still fewer formal jobs.

What can be done to break this cycle?

A distinct disadvantage with India’s approach towards skilling has been the ignorance towards market demands. For the most part, skills have been provided in a top-down fashion. Thus, most of the skilling efforts focus solely on providing certain skills but fail to match them with the needs of the market.

Experts argue that for skilling schemes to yield lasting results, skilling efforts must try to anticipate the needs of the market and not just match them. For instance, look at how the pandemic has upended supply chains, thereby causing a considerable fluctuation in demand. Therefore, it becomes essential to rightly analyse the market needs and skill the youth in accordance with that.

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