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Apprenticeship could be real key to Skill India’s success

When Prime Minister Narendra Modi announced a target of training 400 million Indians to become skilled workers by 2022, it was an ambitious one for it would mean turning nearly 67% of the workforce into skilled workers. Sanjoy Narayan examines the odds of this situation.

columns Updated: Jul 30, 2015 13:43 IST
Sanjoy Narayan
Sanjoy Narayan
Hindustan Times
Skilled workers,Apprenticeship,Economic growth
Prime Minister Narendra Modi at the launch of Skill India Mission in Delhi. (@ANI_news/Twitter)

By 2022, or just seven years from now, it is estimated that there will be nearly 600 million people in India between the ages of 15 and 59.

That age bracket is considered the working age population and with 600 million (which would be more than the projected total population for the European Union) India would have the world’s largest workforce.

Human resources of that magnitude can have a tremendous impact by contributing to the economic growth of a nation and India’s numbers in that age bracket are what is frequently referred to as its demographic dividend.

Only, there could be one small problem.

If things remain as they are, most of that workforce could likely be of little use other than to be employed in less productive, bottom-of-the-rung, manual jobs. That is because India’s workforce is among the world’s least skilled — only 3.5% of India’s workforce has skills of any sort, while the comparable number for China is 47%, Germany 74%, Japan 80% and South Korea a stupendous 96%.

So, earlier this month, when Prime Minister Narendra Modi announced a target of training 400 million Indians to become skilled workers by 2022, it was an ambitious one for it would mean turning nearly 67% of the workforce into skilled workers.

Will it happen? Let’s examine the odds.

Shorn of frippery such as a new Skill India logo, a promotional film and so on, the highlights of the Skill India Mission are government-funded ‘skill loans’ on easy terms for 3.4 million Indians who want to take vocational courses; and an emphasis on India’s ubiquitous Industrial Training Institutes (ITIs) that teach technical courses and provide certification.

The problem arises with the latter.

There are around 10,000 ITIs but only a minuscule number of them are properly functional with the wherewithal that is needed to impart relevant technical education.

India’s ITIs require around 75,000 trainers but have just 4,328; their infrastructure and training equipment fall far short of what they need; and their training courses urgently need upgrades and additions.

A government estimate says the highest demand for skilled workers in 2022 will be in sectors such as real estate, transport, retail, beauty and wellness industries — areas where ITIs are unlikely to have much expertise to conduct meaningful courses.

The real problem with ‘skilling’ India’s working age population, especially the youth, doesn’t have to do with the state of the ITIs; nor is it about what schemes the government decides to announce. The real problem is on the demand side — with industry and businesses, which need a skilled workforce the most.

Upgrading and updating government institutes such as ITIs and polytechnic colleges can certainly work but only in the long term.

In the relatively short term, industry will have to help itself. And one way to do that is by ushering in a robust culture of apprenticeship or ‘learning by doing while earning’.

In many countries apprenticeships in companies and industries account for more than two-thirds of skill development: fresh school graduates join industries and are paid a stipend while they learn skills on the job. In Germany and Japan, whose working age population is a small fraction of India’s, there are 6 million and 10 million apprentices, respectively. China has 20 million.

In India, the number is a piffling 280,000. This can change.

Last year, lawmakers passed the Apprenticeship (Amendment) Bill, 2014, which improves the stipend paid to apprentices and makes the provisions for companies opting for such programmes more flexible.

At present, India’s industries have a capacity to hire 490,000 apprentices (of whom 280,000 are actually on the rolls). Given India’s working age population, that number should run into millions. It can, if business and industry step up. Apprenticeship programmes have been shown to significantly lower youth unemployment in developed economies such as Germany, Denmark and the US, where most apprentices eventually end up with full-time employment at their sponsor companies.

Besides, training apprentices on the job can solve the problem that many companies face when they hire from technical institutes and have to re-train them in specialist skills. Apprenticeships could be the real key to Skill India’s success.

(Sanjoy Narayan is the editor-in-chief of Hindustan Times. He tweets as @sanjoynarayan)

First Published: Jul 25, 2015 22:58 IST