Upskill girls to catapult the India growth story

This article is authored by Ved Mani Tiwari and Manjula Singh.

India is at a remarkable point in its history. With the world’s largest population of young people, there is one of history’s biggest opportunities to add new, skilled talent to power economic growth for the next century. India is betting big on its youth and the government has earmarked as much as ₹2 lakh crore ($25 bn) for the Skill and Employment Programme in the 2024-25 Union Budget in addition to state governments, private sector and philanthropic efforts. India aims to arm two million young Indians with job-ready skills over the next five years. This boost, coupled with other key initiatives like the Pradhan Mantri Kaushal Vikas Yojana and the National Apprenticeship Promotion Scheme, signals a clear message: India is all in on empowering its workforce for the future.

Women empowerment (Voices of Youth)

This investment in skills is paying off. Despite global turbulence, including the Covid-19 pandemic, India's job market has shown remarkable resilience. The national unemployment rate dipped to 3.2% in 2023, while urban unemployment for those 15 and older held steady at 6.7%. Much of this progress can be credited to the National Skill Development Corporation (NSDC)'s strategic industry partnerships that have served as the bulwark. India's job market has, therefore, shown remarkable resilience. The percentage of young adults (15-29) with formal vocational or technical training nearly doubled from 2.5% in 2017 to 4.4% in 2023.

While these strides in skilling are transformative, India's path to becoming a $5 trillion economy by 2047 demands a sharper focus. Job placement and retention are the crucial next steps for sustainable growth. Even more important is tapping into India's underutilised female workforce. By levelling the playing field for women, India could add a staggering $770 billion to its Gross Domestic Product (GDP) by 2025. The benefits extend far beyond economics – empowering women financially ripples out to improved health and nutrition for entire communities.

The challenge now is to constantly improve India’s skilling model, so it delivers even better results. This means combining quality of training with real job placement and support to stay in work, as well as gender inclusivity. Innovative financing schemes that link funding to concrete results on these parameters can fuel India’s jobs creation and inclusive growth at scale, and cost-effectively.

The Economic Survey 2024 showcased innovative models like the Skill Impact Bond (SIB) which has attracted private sector funds and expertise for skill development, job placements, and retention.

SIB, India's first impact bond for employment, is also the largest in the world. It is a ₹120 crore fund that is equipping 50,000 young people (60% of them women) with skills and providing access to wage-employment. It was launched in November 2021 by the NSDC and a consortium of mission-aligned partners including the British Asian Trust, Michael & Susan Dell Foundation, Children’s Investment Fund Foundation, HSBC India, JSW Foundation, Dubai Cares, UK Government Foreign, Commonwealth and Development Office and United States Agency for International Development. At its heart, it is a pay-for-results construct where implementing partners are measured and financially incentivised on verified results.

To date, SIB has successfully trained nearly 30,000 first-time job seekers from low-income families across 24 states. Training partners work with vulnerable communities to offer skill training courses aligned with their aspirations and unlock access to employment. Integral to SIB is a pay-for-performance component that incentivises skilling, placement and retention that has delivered spectacular results. 73% of enrolled trainees have joined new jobs, 57% of those enrolled have stayed in jobs for at least 3 months, and 54% have continued working for six out of 12 months. Early results also point to longer-term benefits as well like increases in agency and control (over finance and decisions like employment and age of marriage), rising aspirations and positive shift in parents’ attitudes towards girls’ employment.

The results-based financing mechanism of the SIB has created both the accountability and incentive for programmes’ implementing partners to deliver on the strategic objectives of the programme – and has served to channel expertise, innovation and grit of the partners

One of the unique features of the SIB is its focus on women; On the ground, for instance, female counsellors are deployed to recruit young women and oftentimes also to convince their families.

Nirupama Pramanik, a resident of South 24 Parganas in West Bengal was married off early. Trained by Magic Bus on essential skills such as self-awareness and interpersonal skills for a customer facing role, she now works as customer care executive for a monthly salary of over ₹10,000 per month. This marked the beginning of her financial independence.

Pinki Kumari, from Brindabanpur in Jharkhand is one of five siblings in a family with a total income of ₹ 36,000 per annum. Trained by PanIIT Alumni Reach for India Foundation, at their Bokaro Gurukul campus, Pinki was trained as an Automotive Machining Technician and now earns ₹ 11,000 a month in Tamil Nadu. She is the highest earning member in family.

SIB’s target was to have 60% women, but this is now over 70%. The magic of SIB is how it has empowered girls like Nirupama and Pinki who have emerged as the breadwinners for their families while realising their own dreams of education and independence.

India is at a turning point. With declining fertility rates and increasing female literacy there is a both the need and the opportunity of young women joining the workforce. With the advantages of having a double income and the potential of female change agents in the family, more and more are hungry to dream big and realise these dreams. It is time to scale up proven models to make population level change.

We should do it for Nirupama & Pinki and many other girls and young women like them.

We should do it for India.

This article is authored by Ved Mani Tiwari, CEO, National Skill Development Corporation and managing director, NSDC International and Manjula Singh, executive director, Children's Investment Fund Foundation