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.
The magnitude of the problem has been analysed by numerous experts: 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.
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.
Keeping in mind the revised National Skill Development Policy due to be announced in a few months that will also outline the contours of the National Skills Mission, we present an analysis of three priority areas that the government needs to address.
Coordination of skilling efforts Currently, there are at least 20 different government bodies in India running skill development programmes with no synergies and considerable duplication of work. For instance, both the Ministry of Labour and Employment (MoLE) and the Ministry of Human Resource Development (MHRD) created their own sector skill councils last year to identify skill development needs in the country, even as the National Skill Development Corporation (NSDC) has been setting up Sector Skill Councils since 2011. A Labour Market Information System (LMIS) that should have been one centralised resource has been developed in different forms by at least five government agencies.
The presence of multiple stakeholders coupled with a lack of coordinated policies has resulted in no standardisation of procedures or outcomes. 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. Skill development efforts today cover everything from personality development, 40-hour long “outreach and awareness programmes” conducted for farmers by the Ministry of Agriculture, 3-6 month courses encouraged by the NSDC and the National Skill Development Agency (NSDA), as well as two-year programmes in Industrial Training Institutes (ITIs).
The Ministry of Skill Development and Entrepreneurship (MSDE) was created as the aggregator in the sector, but the duplication of roles and policy confusion has persisted. Tasks allocated to MSDE in the official gazette notification, such as “frame policies for soft skills”, “computer education”, and “work relating to Industrial Training Institutes” are ambiguously crafted, and have large overlaps with the work allocation of existing Central ministries.
It is imperative that MSDE performs the difficult role of “coordination relating to skill development” assigned to it. To begin with, the delivery of at least 70 per cent of the total skill development targets should rest solely with the MSDE. Large scale training delivery systems, such as the Directorate General of Employment & Training (DGE&T) of MoLE should be integrated with MSDE, while ministries working on skills in specific sectors (such as Textiles and Tourism) should closely coordinate with it. In addition, overarching roles such as apprenticeship system, LMIS implementation, private sector coordination, etc., should be housed exclusively within one agency to reduce policy confusion. Finally, the MSDE must explicitly be made responsible for coordination with the States and their Skill Development Missions.
Scientific approach to policies Skill development is a tricky field for the government to channel resources into. To justify investments, policies must be grounded in hard data. Scheme design parameters, such as sector and beneficiary targeting, curriculum, delivery methods, etc., need to incorporate authentic market signals. 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 LMIS that can provide an accurate statistical base for formulating and monitoring vocational training policies and programmes.
Technology can also play a great role in ensuring quality of delivery at scale. Business processes associated with planning and delivery can be managed better with the use of technology, as the experience of MIS portals developed by several ministries show. In addition, scientific monitoring and evaluation methods need to be incorporated in every programme to ensure just utilisation of resources.
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.
The government has its task cut out. What is needed is a willingness to act, and to take the difficult decisions that can help realise the ‘Skill India’ dream.
(Kumar Vivek and Radhika Kapoor are development sector professionals who worked with the erstwhile Office of Advisor to the Prime Minister on Skill Development. The views expressed are personal.)