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18 Mar 2015

India’s Skills Challenge: Reforming Vocational Education and Training to Harness the Demographic Dividend By Santosh Mehrotra

By Santosh Mehrotra, Jawaharlal Nehru University, Delhi.

indiaThe Technical and Vocational Education and Training (TVET) system in India needs to expand very rapidly if it is to serve the interests of the 5-6  million youth joining the labour force every year, and of an economy that is both growing rapidly as well diversifying fast.

However, the majority of India’s workforce either has less than primary education or is illiterate (53%). Moreover, less than 10% of the workforce has acquired vocational skills, although that proportion is higher if we take only the non-agricultural workforce into account (20%), and even higher if we take only the industrial workforce into account (44%). While the increase in percentage seems good it is far below comparable countries and needs to increase.

India’s skill development system has four parts. First, a very narrowly based pre-employment training system of Industrial Training Institutes (grown to about 12,000 in the last 7 years, of which 2,000 are public, the rest private). Second, there are a rapidly growing number of formal vocational training providers  that are being incubated by the National Skill Development Corporation after 2010, based on a for-profit business model, though somewhat subsidised by government. Third, vocational education is offered in senior secondary schools in classes 11-12 (which barely enrol 5% of the relevant age cohort); since 2012 government secondary schools have also begun to offer vocational education in classes 9-10, thanks to the introduction of the National Skills Qualification Framework. Finally, there is the in-firm training provided on recruitment by companies (but only 16% of Indian companies provides such training, and that too only large ones, in contrast to 85% of firms in China).

India must therefore expand TVET to cater to the majority already in the labour force who have informally acquired skills, so that recognition of prior skills and learning becomes systemic. The National Skills Qualification Framework (the base document for which was drafted by a task force of the government led by the author) makes provisions for this monumental task.

The productivity of India’s workforce is lower than many comparator countries. If India is to become a major manufacturing power, productivity in the economy needs to improve significantly. We have to create an ecosystem that promotes and rewards skills and productivity;  Government, industry and private vocational training providers need to work together to realize this objective.

To realize India’s demographic dividend we need to meet India’s skills challenge. Since economic growth took off over the last decade, non-agricultural jobs have been expanding at a rate roughly comparable to the rate at which the labour force is growing. However, it is the quality of jobs that are a matter of concern. If skilled workers don’t become available to industry at a rate comparable to the growth of demand for skills, manufacturers will increasingly resort to more capital-intensive technologies, which will lock India into a pattern of growth that is synch with its comparative advantage – relative abundant labour power.

Only large firms offer apprenticeships, and in a country with a workforce of 485 million, there are under 300,000 formal apprentices. The rest are all informal apprentices, who tend to be exploited by their employers. Changes are certainly needed in the Apprenticeship Act 1961.

While some progress towards reforming TVET in India has been made, a huge and broad ranging agenda for reform lies before the government and industry.

Industry needs to get involved to a much greater extent than ever before in TVET. Both large industries, many of which are engaged in in-house training, as well as small and medium enterprises, will need to find ways to increase in-firm training. Industry must make hiring formally trained skilled personnel an integral part of its human resource policy and include processes and practice to reward skills. Industry will also need to offer its human resources to vocational secondary schools, industrial training institutes and private vocational training providers, so that the number of instructors with practical experience increases by a very large number.

Further Reading

Mehrotra, S. (Ed) (2014) India’s Skills Challenge: Reforming Vocational Education and Training to Harness the Demographic Dividend. Oxford University Press.

King, K. (2012) The Geopolitics and Meanings of India’s Massive Skills Development Ambitions. International Journal of Educational Development 32: 665–673. [Read summary of it in NORRAG News here]

>>Other NORRAG blogs posts on TVSD


Santosh Mehrotra is Professor of Economics, Centre for Labour and Informal Sector Studies, Jawaharlal Nehru University, Delhi. Previously, he was Director-General at the National Institute of Labour Economics Research and Development (NILERD, earlier called Institute of Applied Manpower Research), Planning Commission of India. Email:

NORRAG (Network for International Policies and Cooperation in Education and Training) is an internationally recognised, multi-stakeholder network which has been seeking to inform, challenge and influence international education and training policies and cooperation for almost 30 years. NORRAG has more than 4,200 registered members worldwide and is free to join. Not a member? Join free here.

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