Bengaluru: As India heads for its 17th general elections, employment is emerging as the single most important voter issue, noted a pre-election survey conducted across Rajasthan, Chhattisgarh and Madhya Pradesh by Lokniti-CSDS-ABP News. Labour participation rate fell from 43.2% to 42.7% in just a month to February 2019, noted the Centre for Monitoring Indian Economy, a business information company, in its March 2019 report.

The unemployment rate for trained persons doubled to 12.4% in 2017-18 from 5.9% in 2011-12, while the national rate of joblessness was 6.1%--the highest in 45 years--according to the National Sample Survey Office’s (NSSO) first periodic labour force survey, Business Standard reported on February 6, 2019.

KP Krishnan, secretary, ministry of skill development and entrepreneurship, heads the Pradhan Mantri Kaushal Vikas Yojana (PMKVY or prime minister’s skill development programme) which aims to skill 10 million youth by 2020. In an email interview to IndiaSpend, he explained why the entry of “7-8 million people” into India’s labour market every year does not mean that there is an ideal match between their skills and “access to good employment opportunities”.

Krishnan, 59, holds a PhD in economics from the Indian Institute of Management, Bangalore, and has served in the ministries of rural development and finance as well as the prime minister’s economic advisory council. He has also worked for the Karnataka government and the World Bank. Krishnan has authored reports on the Indian financial sector and published academic papers on urban development and financial sector issues.

In these excerpts from our interview, Krishnan talks of the challenges in skilling millions of job-seekers and steps being taken to improve employment opportunities for women.

Less than 5% of India’s workforce is formally skilled, compared to China’s 20%, South Korea’s 96%, Japan’s 80%, Germany’s 75%, United Kingdom’s 68% and the United States’s 52%, according to the ministry of skill development and entrepreneurship’s annual report for 2015-16. Why is India lagging so far behind?

To begin with, it may be noted that there is no agreed or uniform definition of what constitutes “skilling” for classifying people. Hence, comparison of proportion of skilled workforce across countries is likely to be misleading and not very useful.

In the case of India, only formally skill-certified workforce is being accounted for in this number, excluding all professional higher education qualification holders such as doctors, engineers, chartered accountants and MBAs. If we also use the more common international definition of a skilled person, that is a person having worked for more than 10,000 hours on a skilled job, around 44% of India’s workforce is likely to be classified as skilled, though not formally certified.

Regardless of this, under the Skill India Mission launched in 2015, more than 10 million youth are being trained each year through various skill development programmes implemented by 20 central ministries. In addition to this, state governments, corporates, and others are also providing training to the youth.

In November 2018, the government was 64% short of its aim to skill 10 million youth under PMKVY by 2020. Further, the government is 66% short of its target for training, and 74% short for certification post-training. Why?

PMKVY envisions enabling large number of Indian youth to take up industry-relevant skill training. Individuals with prior learning experience or skills will also be assessed and certified under Recognition of Prior Learning (RPL), an assessment process to evaluate existing skill sets, knowledge and experience gained by formal, non-formal or informal learning. The target allocation under PMKVY 2.0 (2016-20) stands at 9.2 million, which is 92.5% of the envisaged target of the programme.

Under the scheme, against the target of 10 million for various components, 4.1 million have been trained and 3.1 million certified. In terms of individual components, under the short-term training as against a target of 3.35 million, 2.63 million have been trained which is 78% of the target and of this, more than 81% have been certified.

Under RPL, around 900,000 beneficiaries have received certification, which is 66% of the trained candidates. Of the total 5.6 million targeted under RPL, 3.5 million have been turned towards a new mode--‘RPL with Best-in-Class Employers’ to extend the outreach to reputed employers. The programme started in early 2018 with most of the targets allocated in the second half of 2018. More than 360,000 candidates have registered and 200,000 candidates have been certified so far through this mode.

With RPL with Best-in-Class Employers, the rate of certification is around 35,000 candidates on average per week. Further, three other modes--RPL Camps, RPL at Employer's Premise and RPL through Centre--have contributed to 1.2 million registrations and 1.1 million enrolments.

So what emerges is that while progress is very good under some components, improvement is required under others. The ministry is supporting the state governments for improving the numbers and over the last few months significant progress has been made. All facilitation is being provided through workshops, handholding sessions to assist them in improving the numbers, and quality of training.

In 2018-19, the MSDE was allocated Rs 3,400 crore [$486.4 million] in the budget, which represented a “drastic cut” against the Rs 7,696.54 crore [$1.1 billion] requested. This was because MSDE under-utilised funds in previous years, revealed a 2018 parliamentary committee report. Why are funds left underutilised given India’s huge skill gap?

The MSDE is implementing programmes for short- and long-term skilling. The short-term skilling programme PMKVY, started in the last quarter of 2016-17, picked up pace from 2017-18, which is evident from the trends in fund utilisation: in the last three years, as against the allocation of Rs 3,375.44 crore, an amount of Rs 3,088.50 crore has been utilised so far.

In terms of year-on-year disbursements, the disbursement in 2017-18 at Rs 1,794 crore was higher than the funds transferred of Rs 1,132.48 crore. They fell in 2018-19 due to operational parameters.

As regards long-term training, expenditure at Rs 607.5 crore in 2016-17 was more than the allocation of Rs 460 crore in 2016-17. However, 2017-18 witnessed underutilisation because of low performance of apprenticeship training scheme due to lack of awareness of amendments made in the Apprentices Act, 1961 among employers as well as apprenticeship training seekers. A new scheme called National Apprenticeship Promotion Scheme has been launched to incentivise employers who wish to engage apprentices.

In many of the schemes--the upgradation of vocational training improvement projects on the lines of Industrial Training Institutes (ITIs), enhancement of skill development infrastructure in the northeastern states and Sikkim, skill development in the 47 districts affected by left-wing extremism--the under-utilisation is due to delay in utilisation of fund by states and union territories.

Besides, many other schemes were under the approval process so no funds could be spent. But now they are on track.

The unemployment rate for trained persons doubled between 2011-12 and 2017-18 while the national rate of joblessness is now the highest in 45 years, as per the NSSO. What are the challenges in the employment of trained persons?

As per the latest available data, about 7-8 million people are entering the labour market annually, majority of who face the challenge of acquiring the right skills to access good employment opportunities and earn livelihoods. While there is considerable potential for employment, the challenge of accessing employment opportunities emanates from low level of education and high dropout rates, information asymmetries, mismatch between the supply of skills and demand and meeting high aspirations of young people.

In the Indian economy, where 84% of the workforce is engaged in the unorganised sector, identifying the skill requirements of the unorganised sector enterprises and micro, small and medium enterprises (MSMEs) is challenging. The need of the hour is to integrate them more deeply into the skill ecosystem.

Government policies and efforts through the years have focused on identifying critical issues and solutions for the youth and synergising diverse efforts to enhance employability. Scaling up and intensifying private-sector employer engagement in skill development is key to making available industry-relevant skilled workforce. One of the models that MSDE is looking at is scaling vocational training through apprenticeship. The apprenticeship programme has been made more industry-friendly and flexible--it is a ‘facilitating’ programme. Industry now has the opportunity to shape job roles and ensure that individuals are trained as per requirement.

To promote employability skills in higher education, MSDE together with ministry of human resource development and ministry of labour, has launched an apprenticeship and skills programme to provide industry-specific opportunities to fresh graduates.

Cross-country evidence shows that countries with high relative shares of young people in vocational education, including Germany, Denmark and Australia, tend to have among the lowest rates of youth unemployment across OECD (Organisation for Economic Cooperation and Development) countries.

Another aspect that the skill ecosystem is cognisant of is the onset of new technologies. The new frontier technologies in Industrial Revolution 4.0 [the next phase of the industrial revolution propelled by automation and data] is not only impacting processes in existing jobs but also creating new jobs and phasing out old. Some of the skills that may have been relevant until recently may turn less relevant with the onset of advanced requirements in areas such as artificial intelligence and machine learning.

It is important for us to remain in step with these changing requirements and plan our interventions accordingly. For instance, we can respond to changing technology by creating suitable training content. This necessitates not only fresh skilling but also upskilling and reskilling of the existing workforce.

Former Reserve Bank of India governor Raghuram Rajan has emphasised the need to “try and give people the ability to move out of agriculture into industry and services, where income is much higher”. What sort of stress does India’s agriculture distress put on its skill-development infrastructure?

The MSDE has to respond to the skilling requirements of the economy. [But] MSDE does not play a significant role in the decisions or the structure of the country’s economy. Therefore, MSDE through national skill development corporation and agriculture sector skill council, is working closely with ministry of agriculture and farmer welfare to create training programmes which encompass the entire value chain of agriculture and its allied sectors.

National Skills Qualifications Framework (NSQF)-aligned courses have been created to cover a broad spectrum of activities under agriculture such as crop production, agri entrepreneurship and rural enterprises, agri information management, animal husbandry, commodity management, dairy farm management, forestry and agroforestry, among others.

Many new job roles have been created to facilitate implementation of flagship government programmes such as the soil health card. As per February 28, 2019, the skill development management system report of more than 68,000 candidates were trained in various agriculture sector job roles and more than 83,000 were certified under RPL.

“The Committee are concerned to note that while on one hand during the period 1950-2012, 6,624 ITIs were set up, the QCI [quality council of India], in a period of four years 2012-2016, accredited 6,729 ITIs, but those could not function in the desired manner,” noted a January 2018 parliamentary report on labour, which found irregularities in the provision of clearances to ITIs. What steps are being taken to monitor the situation better?

The directorate general of training has initiated necessary action including the notification of revised norms for affiliation of ITIs in April 2018. The states have been fully involved. Out of the 3,500 ITIs in 12 states inspected by QCI, 837 have been re-assessed and jointly inspected with state departments of employment and training; 470 grievance cases of ITIs arisen due to QCI’s accreditation process have been addressed through the appeal mechanism separately.

Experts have commented that "there cannot be thousands of standards (compressed into 2,000 qualification packs/job roles), and ‘delivered’ to trainees in a matter of a few months”. Courses need to be streamlined to ensure better quality and job opportunities. Do you agree?

The national policy for skill development and entrepreneurship 2015 emphasised the need to undertake skilling in India at scale with speed and standard [quality]. To ensure that the country is able to harness the demographic advantage, the need was to analyse the job market, identify relevant skills required and convert them into trainable qualifications.

Forty sector skill councils are responsible for preparing National Occupational Standards (NOSs) and the qualifications packs. Each NOS defines one key function in a job role. For example a sales associate, one of the NOS would be to 'to help customers choose right products'. A set of NOSs when aligned to a job role is called qualification packs and would be available for every job role in each industry sector. These drive both the creation of curriculum, and assessments.

The streamlining of courses is done through their alignment with NSQF anchored at the national skill development agency and implemented through the national skills qualifications committee. In the process of alignment of qualifications, a robust quality assurance mechanism is followed which involves mapping of industry need and employability, curriculum standardisation, proper assessment and accreditation mechanisms and a strong review system.

From the date of notification so far 2,980 qualifications are NSQF compliant across submitting bodies including sector skill councils, directorate general of training, ministries and states. As skill development is a dynamic process and to ensure market relevance of qualifications a robust review mechanism with inbuilt quality assurance at each step is being strengthened.

Female labour force participation rate in India has fallen from 36% in 2005-06 to 24% in 2015-16, as per the Economic Survey of India for 2017-18. Further, 13.6% of rural female and 27.2% of urban female were unemployed, as per the leaked NSSO report. How do you intend to improve opportunities for women through skill development and entrepreneurship?

India has the lowest women’s labour force participation rates in the world, which is showing a continuous decline since 2004-05 with differing trends for rural and urban areas. The national skill development mission aims for inclusive skill development by improving access to and greater participation in skill development opportunities by women. There is increased focus for skilling women both in the short term and the long term training courses.

In the PMKVY more than 50% of the candidates enrolled and trained under PMKVY-STT [short-term training] are women. In PMKVY category “special group” also includes women candidates besides persons with disabilities. Various measures have been taken to improve women’s participation.

Under the long-term training implemented through a network of 15,042 ITIs [2,738 government + 12,304 private] located all over the country, 2.28 million trainees are enrolled (in the trades of 1 year and 2 year durations) wherein women are enrolled as per the reservation policy for women of the respective states and union territories. Apart from training of women in ITIs (wherein seats are reserved for women as per respective state government policy), 18 national skill training institutes located at different locations of the country are imparting skill training exclusively for women.

As per NCVT-MIS portal, there is nearly 97% increase to reach 173,105 in admissions of women trainees in 2018 compared to 2014. Further, exclusive batches have been started to provide basic or theoretical training to women under national apprenticeship promotion scheme in all centrally funded institutes.

Women entrepreneurs have also been encouraged through appropriate incentives under the public procurement process wherein network of mentors, industry, resource centres and credit institutes are developed to facilitate women entrepreneurs. National institute for entrepreneurship and small business development under the MSDE has designed entrepreneurship development programmes for the rural women with the objective to inculcate entrepreneurial values, attitude and motivation among the rural women. There is mentoring support provided to women. The livelihood business incubation approach is also used to promote women entrepreneurs by the institute.

(Paliath is an analyst with IndiaSpend.)

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