A skilling crisis, not a jobs crisis: Need to make skilling a key goal towards nation-building
Skills should have been a priority after Independence because an unskilled or unemployed Indian is not a free Indian, and the launch of the Skill India campaign in 2015 seemed a fresh departure from the past. Taking a historical perspective, the phase 1 of skills in India was largely about a purposeless drift without vision, execution or institutions. In phase 2, while the vision was sound, but the execution was affected by the lack of institutional structures—anybody could say no and nobody could say yes—and the lack of nesting skills into a broader job-creation vision. And when the Skill India campaign was launched by our current government, it seemed promising because of three reasons. First, it was part of a multipoint agenda for creating jobs. Second, it struck the right balance between continuity and change. And third, it seemed to have struck the right balance between poetry and prose.
It was clear that Skill India was shaped based on the learning of misgivings of the previous two attempts. We have three distinct problems—matching (connecting demand to supply), mismatch (repairing supply for demand) and pipeline (preparing supply for demand). We can’t teach kids in three months what they should have learnt in 12 years of schooling. We have witnessed the diminishing returns and value of education where class 12 is the new class 8 and we are not even talking about engineering yet.
We confront a financing failure; employers are not willing to pay for skills nor candidates, but are willing to pay a premium for skilled candidates; candidates are not willing to pay for skills, but willing to pay for a job; and banks and microfinance institutions are not willing to lend for skills unless a job is guaranteed. Young job-seekers are unable to get a job without experience, but it is unclear how they can get experience without a job.
India’s firm size distribution—6.3 crore enterprises only translate to 18,500 companies with a paid up capital of more than Rs 10 crore—is a binding constraint for skills because the low productivity enterprises create the vicious circle of being unable to afford the skill wage premium. The massive divergence between real and nominal wages in our 45 job hubs is hindering migration at the bottom of the pyramid. Finally, college isn’t what it used to be, but the social signalling value of a college degree matters; vocational training is usually for other people’s children, not your children.
If we fast forward from 2015 (when Skill India got launched) to now, according to various estimates a little over 1 crore people are expected to enter the workforce, but there are only 60 lakh jobs being created. There is, interestingly, no reliable source of each of these data points, and given the crucial juncture we are at, the political rhetoric around job crisis has become such a gotcha game that no one seems to have the time to ask the bigger question, i.e. of the jobs that are still being created, how many of them are being filled? Nation-building being last on anyone’s priority list (the ardent appeals of an unemployed youth to warring political parties in a recent television debate left an eerie after-effect of that) and there is little consensus being built around the huge gap that still remains in this country on skill inadequacy.
India doesn’t have a job crisis; we have a wage crisis—everyone who wants a job has a job, just doesn’t have the wage they aspire for. The gap can only be resolved through a concerted effort in making Skill India real—that’s exactly where the rubber meets the road and changes the life of our youth. We have seen a few affirmative steps have been taken in this direction by the central government, and under the aegis of MSDE, Pradhan Mantri Kaushal Vikas Yojana has been set up to enable youth to take up industry-relevant skills training and improve their employability. The government has also made available several other skilling initiatives: the National Apprenticeship Training Scheme, Deen Dayal Upadhyaya Grameen Kaushalya Yojana, and National Urban Livelihoods Mission and National Rural Livelihoods Mission. Also, the National Career Service, launched by the ministry of labour and employment, aims to provide job-matching services in a transparent and user-friendly manner.
However, surprisingly, the recent Union Budget speech by finance minister Arun Jaitley seemed muted around the plan ahead for Skill India, besides the notable exception of renewed focus on creating more options for medical students and impetus for higher education (both benefiting the above-average youth). At the moment, we need to focus on three things: (1) a clear, committed strategy towards making skilling a key goal towards nation-building—we need a sustained goldilocks approach to skilling, rather than oscillating between hot and cold; (2) invite co-participation amidst all political parties to come up with a shared vision and plan around building skills for a resilient future; and (3) create a high decibel awareness that paves the way for the right skills for the right jobs.
India’s war on poverty cannot be won without skilling India. We may still not get there, but let’s start with what’s necessary, then do what is possible, and then suddenly we would be doing what is impossible.
Authored Article by Rituparna Chakraborty
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