Skilling push: Equipping workforce for the future economy
This article is authored by Aruna Sharma, practitioner development economist and retired secretary, government of India and Sapna Moudgil, CEO, NIIT Foundation.
There has been much anticipation about the government’s plan to revamp the National Policy on Skill Development and Entrepreneurship, 2015, in line with today’s world. One of the main challenges our country faces, however, is consistently creating quality, sustainable jobs to harness the benefits of a growing workforce and avoid issues of unemployment and underemployment.
Therefore, a valuable opportunity presents India to reflect on how government-level support can enhance skill development for its youth, whether through regular education or additional programs for those with incomplete academic education.
Why is there a need? With one of the largest – and youngest – workforce globally (around seven to eight million youth enter the job market annually, according to the International Labour Organization), India’s skilled workforce remains persistently low with only nearly 5% of our total workforce considered skilled, China, where skilled workforce constitutes to nearly 27% of their total employee base of over 733 million.
As newer domains continue to emerge, thanks to the revolutionary and rapid developments in technology, the churn in the Indian job market is anticipated to be around 22% as the country witnesses a sharp rise in employment opportunities in Artificial Intelligence (AI), machine learning and data – further warranting the urgency to bolster our efforts in upskilling our workforce to brace for the new world order.
Strategising and implementing skilling initiatives in a country as vast as ours is no small feat. That said, the progress under the ministry of skill development and entrepreneurship (MSDE) has been substantial over the past decade – having trained/oriented 1.40 crore citizens under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) since 2015.
India’s extensive efforts in accelerating skilling initiatives are also evidenced through our collaborations with the World Bank, which, through a $250 million loan (since 2017), assists the MSDE in implementing nationwide initiatives like the Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP).
As India continues to expand its job market (evidenced by the creation of 46.7 million jobs in FY24), a lot of expectations hinge on the impending skilling policy.
With the MSDE’s Vision 2025, which aims to strengthen the ecosystem to upskill our workforce via the inception of a skill-centric market and enabling individual social mobility and economic gains, the latest skilling policy is anticipated to address the shifting atmospheres and present a robust framework, potentially forecasting the next 10-15 years.
The government’s efforts are well demonstrated by the substantial emphasis on employment and skilling in the latest budget for FY25, materialised by the allocation of a central outlay of INR 2 lakh crore for schemes and initiatives aimed at enhancing employment and skilling for 4.1 crore youth over the next five years.
Additionally, the fourth scheme, announced at the latest Union Budget aims to considerably focus on the collaborative efforts between state government and industry – aiming to skill 20 lakh youth over the next five years. To facilitate the beneficiaries financially, the government also announced the revision of the Model Skill Loan Scheme, upping the limit to INR 7.5 lakh from a government-promoted fund, aiming to assist 25,000 students annually. This, in turn, would present a two-fold benefit for the MSME segment. On the one hand, the industry gets a paid apprentice for a year, while on the other, the student receives training that enhances their employability. A two-fold approach is the need of the hour to address the gaps in the demand and supply of skilled employees.
Firstly, while the Skill India Mission has trained (upskilled/reskilled) over 14 million people since its inception in 2015, the mission initially aimed to skill 400 million workers by 2022– marking a substantial difference. Hence, strengthening the delivery of the programme remains integral to ensure its success and enhance our workforce, which could be achieved via streamlining the process of applications and enhancing collaborative efforts at state, central, and private levels.
And secondly, private stakeholders, owing to their role in the employment market – hold the key to truly transforming the country’s employee base into a skilled workforce. For this, in-house training programmes can be leveraged to upskill existing professionals – making them adept in their respective domains, while collaborative public-private partnerships could evolve the ecosystem.
As one of the fastest-growing economies today, India holds immense potential in utilising its youthful workforce and becoming a global leader with a highly skilled employee base. For this, we must recognise the rapidly altering environments and allow our workforce to accordingly adapt to the ever-evolving job markets, with the assistance of stakeholders at central, state, and private levels.
This article is authored by Aruna Sharma, practitioner development economist and retired secretary, government of India and Sapna Moudgil, CEO, NIIT Foundation.
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