India’s Demographic Dividend

The government has been trying to upgrade the skill building institutes of the country since its 2004 budget. And in Budget 2008, one more establishment has been announced. This time it plans to set up a non-profit skill development corporation in private-public sector to harness India’s demographic dividend. The corporation will map areas where there are skill gaps, set industry standards for vocational training in association with the UK-based City & Guilds, and work like a regulatory body with industry looking after delivery. The aim is to design an accredited certification for industry-endorsed training, and continuously evaluate trainers. It is a great mission, if it comes up.

Around 10-15,000 good trainers will be required to carry out the task. What will be the source of these trainers? One solution lies in redeploying willing and able retired personnel, including from the defence sector. Another way out may be to motivate and involve the persons in industry who can take up part time job of training. Latest technology can also come to aid and ease the role of the trainers as facilitators whereby they can impart training to more number of people.

As per one estimate, Industry will need some 120-130 million people till 2015. While 4-5% are to be highly qualified specialists (PG, PH.D) in various areas for the top positions, some 20-23% are to be graduates in engineering, medicines, accountancy, and other professions. Some 30-32% requirements will be for vocationally trained people (with full schooling). 40-45% may be the requirement of unskilled persons with no formal education or who may be school dropouts for working as helpers, guards, construction workers, etc. The better quality of education at all levels of the pyramids will be the interest of the people as well as the country. With globalization, India can cash on its demographic advantage to man the scarcity of skilled manpower all over the world and in turn that can push the families of those skilled ones to a higher standard of living.

As estimated, every year, around 13 million young people enter the job market. However, about 2.5 million only get enrolled for some sort of formal training. Even then, most don’t get remunerative jobs, because of the poor quality of education and skill imparted by the education system.

Many in the industry have been having its own training facilities to man its requirements. Some of them are excellent. As reported, corporate India directly trains about 40,000 people annually via various short-duration vocational courses. It can certainly further expand it. Additionally, a government certification can impart more credibility and be a supply source for others with no such facility. A working experience in an industry for a year or two must be made compulsory, as in some countries, before one embark on further studies. ISB, Hyderabad has such restriction. I just can’t think of an MBA education for a student who doesn’t know what an enterprise is.

As per an estimate, the Centre invests around Rs 20,000 crore annually in various skill development, vocational training and entrepreneurship programmes under the various ministries. I personally think all the skill building initiatives must come under one ministry, The existing PPPs forged by CII and several industries to upgrade facilities at the over 1,800 industrial training institutes (ITIs) in the country are steps in right direction. Around 300 companies have come forward to take up the World Bank offer of Rs 2.5 crore funding for upgrading each of 1,396 ITIs to provide specialized training. Currently, the ITIs train about 7,20,000 children and other vocational institutes train one million people.

But with 300 million people expected to enter the job market in the next 19 years, India must improve on the available facilities quantitatively, but more importantly qualitatively to bridge the gap between the quality of training and the job market requirements. Every state must establish sufficient number of institutes and trade schools even in rural India. Private sector must develop a model where some of the existing facilities of the schools there be used to train the manpower required. All the school dropouts must get a training of at least one trade skill that can earn him an honest living.

Industry can extend its hands to help the people of the country. It will be in line with its new thrust for CSR as well as inclusive growth of the society in which it works. In last decade, the private sector has entered the industry of creating public schools, engineering colleges and business schools in big way. As it seems, education has become a great business. It is unfortunate that there is practically no significant investment in industrial training and skill building facilities. Perhaps it is not paying enough a business.

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