India Wanted To Skill 500 Million People By 2022. We Are Far From It In 2024

The Congress Party manifesto for the Lok Sabha elections 2024 has brought the focus back on skilling and vocational education in the light of waning jobs. It has promised a new Right to Apprenticeship Act that would entitle every diploma holder or college graduate below the age of 25 to a one-year apprenticeship with a private or a public sector company. 

The idea is not new. The Apprentices Act, 1961, and Apprenticeship Rules,1962 were meant to leverage industrial facilities to provide practical training for developing a pipeline of skilled manpower. Subsequently, the laws were amended to include graduates, technicians, technicians (vocational), and optional trade apprentices.

Economists and governments have been planning for years to leverage India’s youth bulge to support rapid economic growth. Between 2004 and 2008, industrial expansion quickly absorbed the existing trained labour force and there was a dearth of skilled manpower in several sunrise industries such as organised retail, automobile, and construction. In 2009, the government led by Prime Minister Manmohan Singh drew up the first Skill Development Policy. A slew of skill development projects were launched in its wake none of which went far.  

In 2015, the Narendra Modi government, which wanted to boost manufacturing through its Make in India scheme, set up the Skill India Mission with a target to train 500 million people by 2022 in multiple vocations. It proposed industry-level skill training to prepare cohorts of workers for sectors such as real estate, transportation, construction, gem industry, textiles, banking, jewellery designing, tourism, and others that did not have enough qualified workers. Two years past the deadline, there are neither enough skilled workers nor enough jobs going around. To top it, worker migration from farms to factories has reversed after the pandemic. 

“There is an industry-wise sensitisation needed for apprenticeship training. There is a skilling gap, and that has to be addressed both at the level of policy as well as by the industry,” Sougata Roy Choudhury, executive director - skills, AA & IR, at the Confederation of Indian Industries (CII). “While this awareness was there earlier, the industry is now looking at it more seriously.” 

Literacy V/s Skill

Vocational training has always been a challenge in India. Industry bodies like CII and the Society of Automobile Manufacturers have sector-specific skill councils that were supposed to facilitate the absorption of the workforce in both public and private sector jobs. Choudhury said that while the industry body actively holds fairs and skilling drives, interest is lukewarm.

While school education picked up pace in post-liberalisation India, vocational training did not get as much attention. The 2011-12 National Sample Survey Organisation Employment-Unemployment Survey (NSSO EUS) found that a meagre 2.2% (10.43 million) of India’s workforce had formal skill training. This figure, according to the Periodic Labour Force Survey (PLFS) data, fell to 2% (9.14 million) in 2017-18 and rose to 3.7% (21.05 million) in 2022-23.

The industry has developed and expanded in many ways after liberalisation. New skills in new industries such as infotech and biotech are much in demand. “Industry bodies need to study the skills transition to understand which skills have become redundant, and which have more demand,” KR Shyam Sundar, professor at Xavier School of Management (XLRI) said. He suggests district-level mapping of skill demand and supply which can then be aggregated to design a national policy.

In her 2024 Union Budget speech, finance minister Nirmala Sitharaman said that as many as 14 million people were trained under the Skill India Mission, including upskilling and reskilling 5.4 million workers. However, that might not be an accurate representation of reality. To begin with, the Industrial Training Institutes (ITIs) in India offer little to no placement opportunities. The long duration of courses also makes such courses unattractive. A survey done by Life Skills Collaborative in 2023 of 15,856 young people across 11 districts found that two-thirds of the participants aged between 19 and 22 had never had any kind of vocational training and only 5% of them had enrolled in these courses.

“We have so many ITIs and all of them have their courses and syllabuses ready. But the problem is we do not see enough people coming into ITIs now,” Hiranmay Pandya, president of the trade union Bharatiya Mazdoor Sangh, said. He said that one reason why such courses do not find enough takers is a preference for white-collar work. Not many want to be plumbers, for instance. There is high demand for electrical technicians but not enough well-trained electricians and wiremen. Those skills are in demand but there aren’t enough takers to learn, Pandya said.

Low minimum wages and a concentration of such jobs in cities, which require migrating to unfamiliar places, are major deterrents. Workers would rather take up seasonal work and prefer the 100-day employment guarantee under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, during off-season. 

“There is a requirement for skilled jobs at the base level in the manufacturing industry,” Roy Choudhury said. However, since people do not want to move out of their villages, the industry finds it difficult to hire, he said. 

Contractual Jobs V/s Permanent Employment

The boom in the services sector has also led to an increase in contractual jobs in the formal sector. Employment services company Indian Staffing Federation in a recent report said that the staffing industry added 2.27 lakh contractual employees in 2021-22. In 2018-19, an overwhelming 57% of workers in the public sector were on contract. Their share in the private sector was 77%. The ratio of contract workers to total workers rose marginally from 0.39 to 0.40 between FY21 and FY22, according to the Annual Survey of Industries 2021-22.

“Industry is not like how it used to be. They used to hire people and train them. Now most jobs are contractual. Who will train contract labourers? And they do not have that kind of skills because they are doing one job today, and another type tomorrow. So if you are removing permanent jobs and making them contractual, no real skill set is being developed,” Pandya said.

According to Roy Choudhury, another challenge that keeps people away from opting for skill development courses is the lack of degrees as opposed to certification. The CII in its engagement with skill training drives found that people are keen on getting a graduate degree certificate over vocational training certificates. They believed that a degree certificate would increase their chances of getting higher wages in the future.

“The sensitisation and creating a brand for skills, we have failed to do. This is a huge challenge,” Roy Choudhury said. 

Various experts believe that the threat of automation will further exacerbate the problem of skill training. Factories are increasingly automating jobs such as packaging and loading, which used to be done by humans. 

“I had recently visited an automobile facility and saw exemplary use of automation and robotics there. Robotics is used for jobs that require extreme finesse. These are jobs that require a lot of specialised skills. For example, painting is a very skilled job in the automobile industry,” Shyam Sundar said. 

Despite the onslaught of technology, some experts believe that the essential nature of jobs has still not changed dramatically. Sectors such as BFSI, beauty and wellness, apparel, electronics and hardware, and construction still absorb most of India’s labour force. According to sector-wise placement data on the flagship Pradhan Mantri Kaushal Vikas Yojana, 54% were placed in electronics and hardware, 20% in apparel, while placement rate in sectors such as construction, beauty and wellness, and BFSI was less than 10%.

“Jobs in certain sectors that are being created do have a technology aspect but they are not really high-tech jobs. The nature of jobs in India has not changed dramatically in India. A digital infrastructure has come into place and there is potential for (the nature of jobs to change) because of AI (artificial intelligence) in the future. However, we are nowhere close to that stage as yet,” senior economist Sanjay Mehrotra said. 

Mehrotra also said that the proliferation of private colleges “massified” higher education resulting in more young people with degrees but without any specialised skills. He said that in 1991, 52% of India’s population was illiterate and employed in agriculture. The basic task was to increase literacy and since skill training requires more than basic literacy, it is still a tall task. 

“We have not invested in vocational training since Independence. Half of our population was illiterate till 32 years ago. We never thought through what is required for the skill ecosystem. What we need is a demand-driven system and not a supply-driven system. All governments have been running a supply-driven system,” Mehrotra said.