Skill Development and Employment Generation in India

Transcription

1 Volume-6, Issue-4, July-August 2016 International Journal of Engineering and Management Research Page Number: Skill Development and Employment Generation in India Dr. Neetu Mishra Department of Applied Economics, NSNPG College, Lucknow, INDIA ABSTRACT India has emerged as a strong economy over the years. However, it needs to capitalize on its resources such as demographic dividend which would act as a driver of growth. India is projected to be the World s most populous country by 2022, surpassing China and are expected to add close to 400million people between 2012 and 2017(U.N.) and are relatively young, with a median age of 27, while dependency ratio will decline by 2% in 2020, resulting in pulling the economy to a sustainable high growth phase. By looking at this demographic advantage of increasing the proportion of working age population account for 60.3% of the total population (Census2011), the Government of India has been giving special focus to skill development and employment generation as the core policy initiative during the past three years in order to reap the advantage of Youth Demographics. Various policy measures have been taken to speed up the skilled labour force like establishment of NSDM, Pradhan Mantri Kaushal Vikas Yojana at National, State as well as regional level, skill development is yet to become aspirational among youth despite these efforts. The present paper tries to measure the present status of Skill Development and Employment Generation in India and also critically measure the challenges in skill development with a view to meet the skill and manpower requirement by Keywords--- Demographic Dividend, Employment Generation Skill Development, Workforce Participation rate I. INTRODUCTION Skill Development has been an instrument to take the economy to high growth phase since many years which has derived from changing demographic profile of the country. India emerged as a strong economy over the years and occupies the better position in terms of Demographic Dividend. It accounts for India having World s youngest workforce with a median age of 25 which is much below than China and OECD countries. However, it needs to capitalize which would act as drivers to growth. It is felt that there is an urgent need for creation of large scale opportunities and infrastructure throughout the country to meet the demand of skilled workforce by the industry and service sector to keep the economy growing. Therefore, in order to reap the advantage of youth demographics, the governments of India initiated for the first time in 11th V year Plan and formulate a National Policy on skill development in 2009 with a vision to skill, reskill and upskill 500 million strong labour force by 2022 and has been giving special focus on providing decent job opportunities on the one hand and skilled manpower on the other in order to improve the competitiveness and making skill development imperative in the economy. The National Skill Development Corporation (NSDC) was also set up in 2009 under Section25 of Companies Act, 1956 for catalyzing the private sector participation in skill development. About 5 million people have been trained by its 211 training partners (3,026 training centres) and 37 sector skill council so far, around 21 universities for alignment of education and training to NSQF. Training Institutes such as the ITI s continue to be underutilized; lack of trainers, inadequate training facilities in nearby villages and small town persists. Ministry of Skill Development and Entrepreneurship also have been created in Since then the number of measures have been taken to speed up the skilled labour force like establishment of NSDM, New Skill Development & Entreprenuership Policy 2015, Common Norms & Standards for schemes implemented by different Central Ministries, New Skill Loan Scheme & Pradhan Mantri Kaushal Vikas Yojna on 15 th July These programmes also implemented at State, district and block level to ensure effective coordination. However, skill development is yet to become aspirational among youth despite these efforts.. India has a total population of 1.3 billion people out of which the labour force covers more than 484million worker. According to research report from the Economist, graduate unemployment remains high despite a labour market crying out for skilled workers. This suggest that 217 Copyright Vandana Publications. All Rights Reserved.

2 country must declare a state of education emergency and that a geographic mismatch, sector mismatch and skill mismatch may be unnecessary confining as may as 300 million people to low productivity jobs. Also a report on Youth Employment- Unemployment Scenario ( ) outlined the critical aspects of employment policy regarding growing a large pool of young people face a number of challenges associated with economic and social structure. Skill mismatch on youth labour markets has become a persistent and growing trend mainly due to over education and over skilling coexist with under education and under skilling and increasingly with skills brought about by long term unemployment. According to the Indian Labour Journal, the period 2000 and 2012 created jobs by a growth of mere 2% per year. Agricultural employment has practically not grown in these thirteen years. In addition, manufacturing jobs have grown by just and annually 4percent as industry languishes. The service sector has demonstrated a growth, but as a recently released survey from NSSO illustrates the majority is in retail trade, construction and personal services, are low paying and tough jobs. On the other hand, construction sector has expanded in terms of jobs. The 2011 Census counted 563 million young people from 10 to 35, according to 12 th V year Plan from2013. Despite its demographic dividend and increased educational levels, India faces youth unemployment as a major challenge. Young jobseekers make up 52 percent of the total unemployed in India. The Youth policy outlines that the government must increase its investment in Youth in order to capitalize on the opportunity they present. The trend of youth Unemployment has been quite stable in India on 9 to 10 percent in the period 1991 to According to Fredrich Ebert Stiftung, India s main challenge regarding youth unemployment is the lack of any form of social security system as well as proper and adequate venues for vocational training. TABLE 1 Level of Education and Employment of Labour Force Number of Institutions Primary I-V 7.91 Upper Primary VI-VIII 4.01 Secondary IX-X 1.31 Senior Secondary XI-XII 1.03 Higher Education 0.49 Gross Enrollment Ratio (%) Primary I-V 99.3 Upper Primary 87.4 Secondary IX-X 73.6 Senior Secondary XI-XII 49.1 Higher Education (18-23 years) 21.1 Pupil Teacher Ratio (%) Primary 28 Upper Primary 30 Secondary 28 Senior Secondary 40 Higher Education 23 Drop out rates (%) Primary 19.8 Class I-X 47.4 Labour and Employment ( ) Estimated Employed Population(crore person) 42.0 Labour Force Participation rate (%) 39.5 WPR in US Male per WPR in US Female per Unemployment rate as percentage of labour force (%) UPS (Rural) 2.3 (Urban) 3.8 US (Rural) 1.7 (Urban) 3.4 CWS (Rural) 3.4 (Urban) Copyright Vandana Publications. All Rights Reserved.

3 CDS (Rural) 5.7 (Urban) 5.5 Source: Compiled from NSS, 55 th, 61th, 66 th Round WPR-Worker population ratio UPS- Usual Principal Status US-Usually Unemployed CWS-Current Weekly Status CDS- Current Daily Status Table 2 Workforce Employment Rates(%) 2013 Age and Sex Distribution Sex Age Employment Rate Male And Female Total Youth Adult Male Total Youth Adult Female Total Youth Adult Source: Ministry of Youth Affairs & Sports, National Youth Policy 2014 The employment to population ratio is defined as the proportion of country s working age population that is employed. A high ratio means that a large proportion of country s population is employed. 25 Table 3 Unemployment Rate Among Youth (15-29) Rural Male Rural Female Urban Male Urban Female 219 Copyright Vandana Publications. All Rights Reserved.

4 Table 4 Labour Force Projection for the 12 th V year Plan Year Total Population(0+) , , , , and Above Population Population(15 and above) in millions LFPR for 15 and above age group Labour Force ( and Above) in millions Source: NSS Round and Census 2011 II. LEVEL OF EDUCATION OF THE LABOUR FORCE The general level of education of over 50 percent of India s labour force in the age group15-59 as per 66th Round of NSS remains extremely low(see Table 1). Out of the total workforce of 43 million, about 29 percent are not even literate and other 24 percent having education up to primary level. Remaining 29 percent had education level up to secondary which included 17.6 percent with middle level education. Only 17 percent having higher level of education (including higher secondary, diploma certificates, graduates and higher than graduation). With this present education and skill levels of the labour force which is at a very low level, it would be a major challenge for India to reap the demographic advantage to re-skill and up-skill 460 million by 2022 and skilling 109 million in order to fill the skill gap (NSDC Study). The Education profile of the labour force as per the NSSO Employment-Unemployment Survey (EUS) states that due to the skill mismatch at the entry level into labour force, unemployment rate among the youth is higher than the rest of the population. As per NSSO Report, unemployment rate among the age groups was 5 percent for rural males and 13.1 percent among urban females. (Table3) If the education status is compared with the rate of unemployment, latter was higher among those of higher educational qualifications, i.e., unemployment rate was 15.6 percent among age groups among graduates and above 9.3 percent for diploma holders as against only 2.3 percent among primary passed in (NSSO Employment and Unemployment Survey ). However, the proportion of 50 percent labour force is still engaged in agriculture followed by manufacturing and service sector. The Right to Education Act 2009 has led to an increase in the total enrolment of the primary level and reduction in the dropout rate at elementary level and increase in retention rate. The total number of children who drop out before completing Class X is about 47.4 percent. This implies that skill program must focus on the age groups as they are the youth still in need of skills and jobs may not have entry level educational quality to avail the ITI or Diploma training. High dropout rate at the Secondary and Higher Secondary level also leads to the new entrants to the labour force entering the informal sector. Therefore, appropriate skill training to these set of labour force is a major challenge. The number of total workers in the country has almost doubled in the thirty years from 1980 to Out of which the urban workers has increased by 175 percent as compared to rural workers with 89 percent. However, the female work participation rate is very low in comparison to male WPR. According to Census 2011, the total, rural and urban WPR (Work Participation Rate) shows an improvement during at the National level (See Table 4). However, if we observed the data across the States, BIMARU States occupied the lowest ranks in terms of WPR; however, the State of Uttar Pradesh is at the lowest position alike in total, rural and urban WPR, while Bihar is at the bottom.(census 2011) The labour force also has been projected during 12 th Vyear Plan through using latest population projection made by NSSO and 2011 Census Data. It is estimated around 24.5 million from million in 2011 to million by the end of 2017 increase in labour force will take place for the 15 and above age group. Whereas, it is heartening to note that the trend of population growth rate has been declining. (Census1991, 2001, 2011) It is further expected that with this population trend and the effect of education and increased size of family income on female work participation, the LFPR is expected to decline further. Therefore, the Government of India should give special attention to increase the female work participation rate in order to reduce the skill gap over the Plan period with the help of various policy initiatives on Education. 220 Copyright Vandana Publications. All Rights Reserved.

5 III. RECENT INITIATIVES ON SKILL DEVELOPMENT 1. National Policy on Skill Development Policy, 2009 The National Policy on skill development policy formulated in 2009 aims at empowering all individuals through improved skills, knowledge and nationally and internationally recognized to avail decent employment opportunities in India Objectives 1. Ensure equitable access to training to all irrespective of any gender, regional, social and sectoral division. 2. Develop a high quality skilled workforce to meet the current needs of markets. 3. Enable effective coordination between different ministries, the Centre and States as well as private stakeholders. IV. NATIONAL POLICY ON SKILL DEVELOPMENT AND ENTREPRENEURSHIP It was launched on 15 th July, 2015 to promote the empowerment by skilling on a large scale entrepreneurship to ensure livelihoods for all citizens in the country. Objectives 1. Promote Entrepreneurship across India. 2. Improve ease of doing business. 3. Encourage Entrepreneurship among underrepresented groups. 4. Improve access to finance. V. NATIONAL SKILL DEVELOPMENT MISSION The National Skill Development Mission was launched on July 15, World Youth Skill Day to provide a strong institutional framework at the Centre and States to provide a skilled labour force in the country. Around 20 Departments/Central Ministries/ NSDC are implementing over 70 plan schemes for skill development. Besides, some other schemes also have been started during the 12 th V year plan period to expand training to the Youths. Aajeevika This scheme has been renamed as Deen Dayal Upadhyaya Grameen Kaushalya Yojana which aims to train 10 lakh rural youths by Seekho Aur Kamao (Learn and Earn) scheme launched by the Ministry of Minority Affairs to upgrade the skills of the minority youths in various modern/ traditional vocations depending upon their educational qualification present economic trends and the market potential in order to make them skilled for self employment. Swarna Jayanti Shahri Rozgar Yojana It was formulated in the 12 th V year Plan as the National Urban Livelihood Mission(NULM) to target the urban poor who are occupationally vulnerable for Employment through Skill Training & Placement(EST&P). The Mission provides assistance for upgrading the skills of urban poor to enhance the capacity for employment. Apprentice Protsahan Yojana This scheme was launched by Ministry of Labour &Employment to support training of one lakh apprentices through MSME s. Pradhan Mantri Kaushal Vikas Yojana This was launched with the help of Ministry of Skiill Development and Entreprenuership through the NSDC(National Skill Development Corporation) based on NSQF(National Skill Qualification Framework). It covers the fresh training and Recognition of Prior Learning of 24 lakh persons. It aims at giving monetary rewards to the trainees on assessment by third party assessment which is around 8000 Rs per trainee. This scheme mainly focus on new entrants as a labour force and Class 10 and Class XII drop-outs. Recognition of Prior Learning(RPL) This has launched by Ministry of Labour & Employment to evaluate the skills of construction workers acquired through pre-determined parameters. National Action Plan for Skill Training of Persons with Disabilities This scheme has launched as a partnership between the Ministry of Skill Development and Entrepreneurship(MSDE) and Department of Empowerment of Persons with Disability for skilling 2.5 million person with Disability (PwD) over seven years. Target and Achievements under XII th Vyear Plan The NSDA is assigning annual targets of skilling to the Central Ministries to monitor the progress. The targets and achievements during the XII th V year Plan are: Table 5 Annual Skilling Targets and Achievements ( ) Financial Year Skilling Targets(lakh) % of population Copyright Vandana Publications. All Rights Reserved.

6 a Total Source: National Skill Development Agency Promoting Public Private Partnership Public Private Partnership model also has been encouraged in the skill development for achieving the objectives and goals of the National Skill Development Mission. Presently, private sectors participate as training partners in the schemes operated by various Ministries/Departments (10,000 vocational Training Providers) or institutions (211) funded by NSDC or as a part of Sector Skill Councils (SSCs) engaged in imparting training through various institutions and courses. Private sector also has been involved in providing vocational training to upgrade the existing ITI s. It involves setting up of a model ITI s in every State for quality vocational training according to needs of industries. VI. FUTURE CHALLENGES AND RECOMMENDATIONS There is a huge demand and supply gap in India. Around 90 percent of l training the jobs are skill based, which demands the requirement of vocational training. With a ratio of vocational students to years old at 0.3 percent, the number is rather low. It has been estimated that almost 75 to 90 percent of all additional employment will require some vocational training. India adopted a National Skill Development Policy in It aims to guide skill development strategies and initiatives of all stakeholders. It has set an ambitious target of skilling 500m people by The NSDC has also made some progress in skill formation at large unorganised sector at the State level. The major challenge before India is to reap its demographic advantage, which calls for constant upskilling and re-skilling of the nearly 40 percent populations in the age groups to maintain their employability levels. For this, all the approaches to skill development should have followed at State and district level. The study of total work participation rate of India shows that there has been an improvement between 2001 and 2011 (Census 2011). At the State level, it has found that Bihar, Uttar Pradesh, Chattisgarh, Jharkhand & Madhya Pradesh are the States where the numbers of labour force are at maximum, as compared to the level of education and skill development which are quite low. Among these, Chattisgarh have emerged as a top State in terms of work participation rate, whereas Uttar Pradesh is at the lowest position, followed by Bihar. Uttar Pradesh being the largest populated State in the country, the target for skill development for the 12 th Plan which is fixed at 8 million by NCSD. However, it is not possible to achieve this target with present infrastructure and capacities. Therefore, it is felt desirable to assess the current status of skill development infrastructure and formulate the policy framework for skill development in the States. It has found that increasing number of youths can entered into the labour force provided they are appropriately guided and trained by for employment skills. Therefore, this has also become a major challenge which is to be addressed through short duration skill development programmes based on skill needs of the economy. The Central Government also raise an outlay for education and skill development under 11 th Five Year Plan which will be used to provide universal elementary education as well as to support the Secondary and Higher education with the setting up of several institutions including Central Universities, IIT s, IIM s, which further would be beneficial for skill development. Vocational and Technical education also have been promoted with the help of action plan through Public Private Partnership. The skill development has been a priority sector for government at the National as well as State level. Various kinds of policies have been initiating to address the needs of non-literates and dropouts and various other challenges, i.e., improving quality, ensuring mobility and flexibility at the National level. The biggest challenge will be ensuring gainful employment opportunities to the trainees, where trainees and students are not being fully absorbed in the labour force. It would be a challenge to ensure that youth who are being skilled through vocational training are able to obtain remunerative employment. This will be achieved if the mission is able to design courses that are relevant and service providers are sincere in their duty and above all if the economy grows and enough employment opportunities are created. As per the Socio-Economic & Caste Census2011, 73 percent of the household in the country are still in the rural areas. Out of which 50 percent households depends on manual casual labour and rest from other sources. On the other hand, the education profiles of the rural household are still very low. Around 70 percent have education up to primary or below, rests of the 30 percent are still illiterate. There is either no or inadequate training infrastructure in rural and far-flung areas. Providing appropriate skill training to these set of labour force is major challenge. 222 Copyright Vandana Publications. All Rights Reserved. VII. MAJOR CHALLENGES

7 The Gender profile indicates that Work Participation Rates(WPR) of females are still below which is only 26 percent as per Census 2011.This shows that Women continues to be underrepresented in providing skills programmes, though it constitutes 48 percent of the total population and have an important role in the development of the economy. Therefore, it should be envisaged for improving the participation of women in skill development activities. The State Skill Development Mission (SSDM s) should be strengthening to harmonise the skilling efforts and to enhance the capacity at the State level. This could be done through inter-linkages with the industry, training providers, Skill Councils at the policy formulation and implementation level. To examine private sector participation in skill development in curriculum development, certification, apprenticeship training and financing. The States should provide training facilities at district as well as remote and hilly areas also for every eligible youth through various audio/video media as well as through street plays. Availability of faster, easier and cheaper credit for skill development by financial institutions needs to be ensured. VIII. RECOMMENDATIONS Expansion of skill development activities throughout the country, particularly in the backward areas to reach the weaker sections of the society through setting up of Skill Development Centres (SDC s). To upscale the training capacities from the present capacity of training. For an effective vocational education system it is also necessary to maintain a minimum standard of training, besides, increasing training capacity. There is a need for skilling and re-skilling the persons entering the labour force to harness the demographic dividend. However, the enrollment in higher technical education has been growing, the number of skilled persons continued to be inadequate. This challenge needs to be addressed at the India level as well as the State level. There is a need to develop training facilities in and around rural areas to facilitate rural youth to undergo appropriate skill training to access good jobs or set up their own enterprises. There is a need to raise the issues that are related to outdated curriculum, inadequate trainers, lack of training infrastructure, under-utilisation of seating capacity, unemployability of trained graduates etc. There is also a need for coordination among different Central ministries and other training providers to avoid duplication of efforts so as to achieve optimal utilization of resources. To propose ways of career guidance and post training placement tracking. It is necessary to ensure availability of funds for creating jobs in the Skill Missions. Apart from that availability of faster, easier and cheaper credit for skill development by financial institutions needs to be ensured. Skill development efforts have not as yet focused on improvement of skills among the youth in situations of natural calamities like earthquakes, floods which are regular occurrence in different parts of the country. There is an urgent need to develop the skill manpower that can be effectively used by the State and Central relief agencies. Vocational training should be accorded top priority. It should be treated as an industry and efforts made o attract private investments into this sector. There is a need to take measures to promote investment to create employment opportunities as the Youth faces a problem of retention in employment outside their region/state, especially in North-Eastern States. IX. CONCLUSION Skilling of youth and creating productive job employment is one of the biggest challenges that we face today. Skill development is critical for achieving faster, sustainable and inclusive growth as it provides decent employment opportunities to the growing young population. There has been a structural shift in the Indian economy in terms of increase in contribution of secondary and tertiary sectors to GDP and demographic dividend have implications for skill development strategy. However, the availability of demographic dividend varies across the country. It emerges from the fact that dependency ratio in U.P. and Bihar (Northern States) at 1.05 and 1.08 respectively is lower than the dependency ratio in Tamil Nadu and Kerala (Southern States) at 1.74 and 1.79 respectively which is lower than National average also. India would be in position to meet the requirement of technically trained manpower not only for its growing economy but also for the aging advanced economies of the world. However, the realization of full potential of the demographic dividend depends on generation of adequate employment opportunities and up gradation of skills of existing as well as new entrants of the labour force. For 223 Copyright Vandana Publications. All Rights Reserved.

8 this, there is an urgent need to develop a high quality skilled workforce/entrepreneur relevant to current and emerging employment market needs. This would be beneficial in contributing gigantic target of skilling 500 million by And ensure that availability of large pool of skilled manpower may in itself create a virtuous cycle for more investment and thereby higher growth in the economy. REFERENCES [1] Report on Uttar Pradesh Skill Development Policy, Department of Vocational Education, Government of Uttar Pradesh, 2013 [2] Report of PHD Chamber of Commerce and Industry on Skill Development, [3] India in Figures Government of India, Ministry of Statistics and Programme Implementation, Central Statistical Office, Research and Publication Unit, New Delhi, 2015 [4] India Labour And Employment Report, Institute for Human Development, 2014 [5] Workers and Work Participation Rate An Analytical Report on Primary Census Abstract, 2011 [6] Report on National Skill Development Corporation District Level Skill Gap Study for Uttar Pradesh [7] Report on Skill India Report of The Sub-Group of Chief Ministers on Skill Development, 2015 [8] Annual Health Survey Bulletin Uttar Pradesh Office of Registrar General Government of India, New Delhi, [9] SRS Bulletin, Sample Registration System Registrar General, India, Vol 50 No.1, 2016 [10] Census of India,, Office of the Registrar General Of India, Government of India, 1991, 2001 & Copyright Vandana Publications. All Rights Reserved.