Landscape of Skill Development in India

Context

India is at a pivotal point in its economic development, with great growth potential but a formidable obstacle in closing the employment-unemployment divide. India is the fifth largest economy in the world, and part of its aim to create ‘Viksit Bharat’ by 2047 includes equipping its young people with the skills needed to adapt to a changing labor market. This goal was emphasized in the most recent Union Budget 2024–25, which included large funding allocations for programs related to employment, education, and skill development. With almost 73% of workers between the ages of 15 and 59 lacking any official or informal vocational training, the challenge ahead is formidable.

India’s Skilling Efforts not Translating into Improved Employment Outcomes

• Structural Economic Constraints – India has a sizable informal sector (between 85 and 90 percent) and a high percentage of micro, small, and medium-sized businesses (MSMEs) in its economy. Only 4.4% of the young workforce is formally skilled (Economic Survey 2023–24), with many MSMEs lacking the funds or incentives to invest in formal skill training. Instead, they prefer on-the-job learning. 
• Demographic Disparities – According to the India Skills Report 2024, employability differs greatly between the states. While rural areas require more traditional and fundamental skill sets, urban centers require high-end tech talents. The skilling models that are currently in use do not sufficiently address this gap. 
• Technological Disruptions – The speed at which technology is developing, especially in fields like automation, AI, and machine learning, is making many traditional skills outdated before the educational system can keep up. 
• No Alignment with Higher Education System – Vocational training and higher education are very different from one another. The incompatibility of professional credentials and academic degrees produces a contradiction that diminishes the importance of skill-based learning. 
• Less Focus on Gig Economy – The expansion of the gig economy and platform-based labor, which might support up to 90 million jobs, is altering the nature of work and necessitating the acquisition of new skills including digital literacy, self-management, and entrepreneurship. The majority of current skill development initiatives are still focused on old job patterns, which leaves individuals ill-prepared for this shift in the workforce.  
• Limitations of Evaluation Models – The existing skill development finance models frequently give short-term outputs (the number of trained individuals) precedence over long-term results (long-term career advancement and sustainable employment). This leads to distorted incentives that lower training’s quality and applicability. 

Measures to revamp India’s Skilling Efforts

• Skill-Mapping and Forecasting – Establish a reliable, up-to-date labor market intelligence system that forecasts skill demands using big data analytics.   
• Skill Certifications – Provide a system of stackable, modular credentials that will enable students to gradually advance their skills: Dividing intricate skill sets into more manageable, certified units Permit students to acquire credits over time in order to advance to higher certifications. Make sure there is a direct market value for each module. 
• Integration of Vocational Education – Include vocational education in the high school curriculum: Commence offering occupational subjects as electives in the eighth grade. Provide a framework for transferring credits between academic and vocational programs. 
• Skill Centres of Excellence – Create industry-specific Centers of Excellence for Skill Development in collaboration with top businesses: Industry associations with government backing ought to oversee these centers. Focusing on advanced, cutting-edge capabilities in developing industries is vital. 
• Gig Economy Preparedness – Establish a specialized curriculum to get employees ready for the gig economy: Provide lessons on financial literacy, self-management, and digital platforms. To promote and legitimize the social security benefits of gig workers, establish a registry.
• Revamped Apprenticeship Model – Redesign the apprenticeship program to increase its appeal to businesses and apprentices alike: Provide tax breaks to businesses according to the quantity and caliber of apprenticeships they staff. 
• Rural Entrepreneurship through Skill Enhancement – Become Digital Seva Skill Hubs by transforming Common Service Centers (CSCs). Train people in both contemporary and traditional skills that are important to rural economies. Provide market linkage assistance, microfinance, and mentorship. 
• Integrating Skill Development with MGNREGA – Improving MGNREGA by adding elements for skill development Provide skill development as a component of the 100 days of work guarantee. Pay attention to abilities that are pertinent to regional and rural development.

Way Forward

To move forward, India must adopt a multifaceted approach to skill development that addresses structural economic constraints, demographic disparities, and technological disruptions. This includes integrating vocational education with the higher education system, enhancing gig economy preparedness, and revamping apprenticeship models to make them more appealing. Establishing industry-specific Centers of Excellence and transforming Common Service Centers into Digital Seva Skill Hubs will further support rural entrepreneurship. Additionally, aligning skill development initiatives with programs like MGNREGA and implementing a reliable labor market intelligence system for skill-mapping and forecasting are crucial. By focusing on long-term outcomes and creating a system of stackable, modular skill certifications, India can ensure that its workforce is equipped to meet the demands of a rapidly evolving job market.

SOURCE: Livemint

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