The recent budget has come up with PMKVY 4.0 that will cover Industry 4.0, AI, robotics, IOT and drones. The announcement will help in improving skills and employability of the youth of our country. Youth is the future of India and the median age of our country is 28.7 years. 65% of the people are below 35 years of age. Hence any step that facilitates employability of our youth, will move the nation in the direction of a brighter future. Having said that, India needs far more innovation in the skilling sector.

Need for innovation in India’s skilling sector

As per the world inequality report, India has the most inequity among all the nations. The top 10% of the Indian population holds 57% of the national income and the bottom half of the population holds only 13%.This shows that there is a huge potential for 90% of the population to contribute to the nation's growth. 

The youth unemployment rate stands at 22.9%despite the literacy rate of the country being 77.7%. This clearly indicates that there is something amiss, and likely pertaining to skilling, or the lack of it. The NSO report further strengthens this belief. As per the report, 96.1% students in the age bracket of 3 to 35 pursue ‘General’ courses. Only 3.9% pursue technical or professional courses. Further, a report by a certain assessment platform shows that only 10% of students pursuing technical education are industry ready. This is a good enough reason for us to focus on the skilling sector. 

The problem!

There are few fundamental issues that need to be addressed. 

Workforce participation ratio

As per the World Bank report our total workforce is 476 million. The workforce participation rate in India is 48%. In European and other western nations, the rate is between 70% to 89%. Further, the participation of women in the workforce is hardly 22%. 

Capacity of Skilling Initiatives 

We have Industrial Training Institutes, Vocational training Institutes, Skill Councils, Pradhan Mantri Kaushal Vikas Yojna and several other similar programs. All these programs put together would be capable of training only 55 million people in a year; a number that is inadequate given the large skilling gap in India.

Jobs after formal skilling

Skills require practice; else they get rusty. And the money invested in skilling goes waste. Most of the skilling programs in India do not result in immediate employment. This is owing to several reasons including the lack of training quality, misalignment of curriculum with industry needs and the inability to keep pace with changing industry requirements. Industry participation in these programs is another challenge. 

Expectation Mismatch

After going through formal skilling programs, people get disillusioned with the salary being offered. They are able to earn similar compensation without acquiring the formal skills. The discipline of working for 8 to 9 hours a day is another challenge. People working with the organized industry for the first time find it very tough and they prefer to drop out. 

Sector participation in job creation

The service sector of India contributes to 60% of the GDP and employs 90% of the workforce. However, the manufacturing and agriculture sector are not generating jobs in proportion to their contribution.

Considering these problems, we need to think of some innovative solutions to make it work. Here are some ideas that can set things right.

Innovation in the Skilling Sector

The last decade has been good for the skilling sector. Skilling was recognized as a need. We experimented with a lot of plans and schemes. Some worked while others did not. Here are some innovations that can enable the skilling sector to move to the next level.

Small partnerships

Whenever the discussion of industry partnership comes up, people tend to look at large organizations. However, large organizations have a formal manner of operating. Their jobs are also relatively more complex. Further, they do not have an appetite for inducting and reskilling the people prepared by the skill development programs. The new dimension is to engage SME businesses and small entrepreneurs. Skills should be designed and delivered based on their requirements so that they are received and perceived better. Entrepreneurs should be given incentives to be part of the local skill boards for designing curriculum and engaging students.

Entrepreneurship Institutes 

If we create more entrepreneurs, we will do a great service to our country. Each entrepreneur creates at least ten jobs. As of now, entrepreneurship programs exist However, their positioning is different. They are perceived as cool programs for bright engineering minds. These programs are given a small section in the colleges. There should be dedicated entrepreneurship institutes in every nook and corner of the country. These institutes must not have any minimum education criteria. A shopkeeper who wants to grow the family business should be allowed to learn practical skills of running the business. There are multiple government incentives which are given to entrepreneurs. A few institutes teach practical things as part of the curriculum. Such additions can make these programs attractive.

Remote and flexible work

Digital India has the potential to change the face of the country. Work that was hitherto concentrated in select metros and big cities, can now be performed from anywhere in the country. The skilled worker operating out of a remote location spends the money in that location. This creates opportunities and aspirations for people in that location. Organizations allowing remote work should be incentivized for each remote worker to offset a part of salary against tax. Digital India has created opportunities for gig employment through apps.The digital tools allow people to receive the work online, complete it and get paid digitally. The gig employment provides flexibility to people to work in their own time without being bound by rigid policies of the organization. Organizations offering gig employment in remote areas should be incentivized. 

Employer Incentive

Tax incentives should be given to SMEs and Entrepreneurs for hiring skilled workers through skill programs. This way people would be ready to pay and attend the skill courses for getting a job.

Vital infrastructure 

Each educational institute should be mandated to have a Skills-focused department that offers skills-based courses without mandatory criteria pertaining to minimum educational qualifications. General courses must have a skills-based subject embedded within them. This will help build vital infrastructure and people will be ready to pay for skills development.