NN46, September 2011
Towards a New Global World of Skills Development? TVET's turn to Make its Mark
'Skilling' the Workforce in India – different models?
By Jeemol Unni, Institute of Rural Management, Anand, Gujarat, India
Email: jeemolunni@yahoo.co.in
Keywords: India; youth; demand-supply; National Commission for Enterprises in the Unorganized Sector (NCEUS); National Skill Development Corporation (NSDC)
Summary: India’s youth bulge will not yield a ‘demographic dividend’ for the country while so many of them lack skills. There are currently many skills development initiatives underway, but supporting on the job training in the massive unorganized sector should be a priority as this is where most jobs for the youth are created.
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One of the biggest development failures in India is lack of focus on universalizing education in the early years of independence. India today has the largest youth population and this is likely to grow till 2025, beyond any other country in the world. However, this does not truly prove to be a 'demographic dividend' as the majority has very low levels of education and formal skill training. This lack of a skilled workforce is a stumbling block to fast economic growth of the country.
There now is recognition of the mismatch of the demand for and supply of skilled workers in the economy. Recognizing this skills deficit, the Finance Minister announced in his 2008-09 budget speech that “…There is a compelling need to launch a world class skill development program in Mission mode that will address the challenge of imparting the skills required by a growing economy. Both the structure and the leadership of the Mission must be such that the program can be scaled up quickly to cover the whole country.” (http://www.nsdcindia.org/about-us/organization-profile.aspx)
The National Commission for Enterprises in the Unorganized Sector (NCEUS) had proposed a scheme of Skill Formation and Employment Assurance in 2009, which would provide entitlements to all registered youth in the unorganized sector to receive training through placements. It was intended to provide employment to poor youth with at least primary but less than higher secondary levels of education for about six months and impart to them formal marketable skills. Pilot projects in some 50 non-metropolitan smaller towns with population between 50,000 and 500,000 would be taken up first, followed by youth in the rural areas and larger towns. The financial provision per worker would be US $ 218 which would cover on-the-job training/employment, cost of certification and cost of training/incentive to the provider/employer. This one-time financial outlay of US $ 218 per worker was intended to be the same as that provided under the (National Rural Employment Guarantee Act (NREGA). A provision of US $ 2180 million over five years for this project would thus ensure additional training-cum-employment to 10 million persons through this mechanism, augmenting the present training capacity by 2 million per year under the programme (GoI, 2009). This innovative scheme for poor youth, however, did not see the light of day and the NCEUS closed down in 2009.
The government set up the National Skill Development Corporation (NSDC) in 2009, an innovative public-private partnership program (PPP) that aims to “facilitate the development and upgrading of the skills of the growing Indian workforce through skill training programs.” The NSDC will facilitate or catalyse initiatives that can potentially have a multiplier effect as opposed to being an actual operator in this space. To scale up efforts necessary to achieve the objective of skilling / upskilling 500 million people by 2022, the NSDC is encouraging ultra low cost, high-quality, innovative business models. It provides skill development funding either as loans or equity, and supports financial incentives to select private sector initiatives to improve financial viability through tax breaks etc. The NSDC will adopt a phased and detailed due-diligence process to select proposals for viability gap funding for vocational training. It will support a pilot and then scale up for proposals from organizations with no prior experience in this area. Since February 2011 NSDC has funded more than 30 projects. http://www.nsdcindia.org/
One such private initiative funded by NSDC is iSTAR. iSTAR, set up by alumni of the Indian Institute of Management, Ahmedabad, proposes to build a bridge of economic opportunity to the organized sector for India’s urban underprivileged through effective delivery of skill training programs and placement services. It aims at economic development of poor men and women through delivery of high quality training programs that create measurable increase in skill levels. It also aims to build market linkages for the skills acquired through tie ups with various corporate institutions for providing employment opportunities. Further, the program is structured as an all round development program and to that end it aims to partner with colleges, micro finance institutions, NGOs and corporates for provision of the various training programs. (http://istarindia.com/contact.html)
The iSTAR program is designed to address the key roadblocks faced by employers and employees in successfully addressing the skills deficit in today’s workforce. The design of the program is tightly aligned to dynamic industry needs and job market opportunities, focused on providing employment and not “employability” to the students, facilitating easy access to credit by creating accessible funding sources for training programs and providing targeted initiatives such as financial services and community services.
A number of top CEOs have left their corporate jobs to grab a share of the skill training market in the country (http://urbanpoverty.intellecap.com/?p=9). Some are putting in significant equity too, which reflects their confidence in the business proposition. Ravina Raj Kohli, for instance, has infused US $ 1,336,520 (or 1.3 million) equity along with entrepreneur Lathika Pai, into JobSkills, that hopes to train 1.74 million people in different trades over the next 10 years. “JobSkills plans to focus on tier II and tier III cities and is tying up with colleges and institutions for training their students and making them employable.”
Manish Sabharwal, a Wharton Business School graduate, is a pioneer in this field. His TeamLease Services Pvt. Ltd is India’s largest and foremost people supply chain and HR Services Company. Established in 2002, TeamLease provides Indian and multinational corporate clients a one stop solution for all their staffing and HR requirements. TeamLease claims to be the only integrated HR services provider, offering corporate customers an end to end solution including temporary staffing, permanent recruitments, payroll roll process outsourcing, regulatory compliance services, training and assessments. (http://www.teamlease.com/company_profile.htm)
Government initiatives at the local level are not far behind. Bhubaneswar Municipal Corporation (BMC) has decided to enhance the skills of the urban poor to improve their job prospects. Apart from training, the youth living in slums would also get placement assistance and loans from nationalized banks. Youths above 18 years are trained under the Skill Training for Employment Promotion amongst Urban Poor (STEP-UP), an initiative under the Swarna Jayanti Sahari Rozgar Yojaya (SJSRY) of the Government of India. The programme targets urban poor for imparting quality training, where there is no minimum educational qualification for selection to the programme (Telegraph, 2011).
There is currently a lot of energy on the ground when it comes to skills development. Hopefully this will take us rapidly to a skilled workforce of at least 50 percent compared to 11 percent in 2004-05. The key is to provide skills that are relevant along with an entry into the formal sector or at least the larger enterprises in the informal sector. However, the route suggested by NCEUS, to support an on-the-job model of training, as it exists in the unorganized sector should also be considered as the largest need and employment is generated there. It would help to improve the quality of work in the informal/unorganized sector as well.
References
http://istarindia.com/contact.html
http://urbanpoverty.intellecap.com/?p=9
http://www.teamlease.com/company_profile.htm
http://www.telegraphindia.com/1110406/jsp/orissa/story_13813783.jsp
http://www.nsdcindia.org/our-success-stories/index.aspx
GoI, 2009, Skill Formation and Employment Assurance, Report of the National Commission for Enterprises in the Unorganized Sector (NCEUS), Government of India, 2009
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Cite article as: Unni, J., (2011) ‘'Skilling' the Workforce in India – different models?’, in NORRAG NEWS, Towards a New Global World of Skills Development? TVET's turn to Make its Mark, No.46, September 2011, pp. 73-76, available: http://www.norrag.org
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