Syllabus– General Studies 3 (Economy)
Speaking on the occasion of the World Youth Skills Day (15th July) recently, PM yet again underscored the importance of a skilled workforce for achieving the goal of becoming Atmanirbhar Bharat.
- In today’s world, only those individuals and countries would grow which are skilled.
- The PM referred to the schemes and programmes run by his administration (such as the Skill India Mission and the ‘Going Online As Leaders’ (or Goal) etc);
- To argue that India had laid the foundation for improving the level of skill among the youth.
- India continues to be a country that faces one of the highest shortages of skilled workforce.
- The massive unemployment in India is one that worsens with educational attainment.
- According to the data for Jan to Apr 2021, the overall unemployment rate in the country was 6.83%.
- In comparison, those with graduation (or even higher degrees) face almost three-times the unemployment level is on 19.3 per cent unemployment rate.
- At over 19% unemployment rate, one in every five Indian who graduate (or even better) is unemployed.
- It is almost as if the economy penalises you for getting educated.
- Companies in India face an acute shortage of skilled manpower and, on the other, India has millions of educated unemployed.
Types of skilling:
- The cognitive skills:
- Which are the basic skills of literacy and numeracy, applied knowledge and problem-solving aptitudes.
- Higher cognitive skills such as experimentation, reasoning and creativity.
- The technical and vocational skills:
- Which refer to the physical and mental ability to perform specific tasks using tools and methods in any occupation.
- The social and behavioural skills:
- Which include working, communicating, and listening to others.
- Different levels of these three types of skills can be combined to further classify skills into foundational, employability, and entrepreneurial skills.
Scale of the skilling challenges faced by India:
- According to the 2018 report by NCAER,
- India had about 468 million people in its workforce.
- Around 92% of them were in the informal sector.
- Around 31% were illiterate, only 13% had a primary education, and only 6% were college graduates.
- Further, only about 2% of the workforce had formal vocational training, and only 9% had non-formal, vocational training.
- That report had also estimated that almost 1.25 million new workers (aged 15–29) were projected to join India’s workforce “every month” through 2022.
- Another noteworthy observation in that report was that out of the more than 5 lakh final year bachelors students aged 18–29 who were surveyed, around 54% were found to be “unemployable”.
What is at stake?
- If the skilling issue is not resolved, India risks forfeiting its so-called “demographic dividend”.
- India’s working-age population is growing faster than its population of young and old dependents.
- There is great opportunity for India to improve both its social and economic outcomes if the higher number of workers are productively employed.
- At precisely the year 2020, the proportion of those Indians who belong to the working age (15 to 64 years of age) and those who are dependent will be 50-50.
- Between 2020 and 2040, this proportion will turn even more favourable.
- But whether this will turn into a demographic dividend or not will depend entirely on how many of those in the working age bracket are working and becoming prosperous.
- If they are not in well-paying jobs, the economy would not have the resources to take care of itself since with each passing year, the proportion of dependents will continue to rise after 2040.
Reasons for low level of skilling:
- A big part of the trouble is the starting condition.
- Over 90% of India’s workforce is in the informal sector.
- According to researchers at the NCAER, India is trapped in a vicious cycle:
- Greater workforce informality leads to lower incentives to acquire new skills.
- Faced with inadequately skilled workers, businesses often choose replacing labour with machinery.
- That’s because “skilled labour and technology are complementary, but unskilled labour and technology are substitutes”.
- This, in turn, leads to still fewer formal jobs.
- Millions of Indians who work in agriculture continue to subsist because they do not have the skills to take up industrial or services sector jobs.
- A distinct disadvantage with India’s approach towards skilling has been to ignore the demands of the market.
- For the most part, skills have been provided in a top down fashion.
- Thus, most skilling efforts focus almost solely on providing certain skills but fail to “match” them with the needs of the market.
- Given the way market demands fluctuate (for instance, look at how Covid pandemic has upended supply chains) , skilling efforts must try to anticipate the needs of the market.
Question- Giving out the significance of skill development to attain demographic dividend, state the reasons for low level of skills among the Indian workforce. Also suggest adequate corrective measures.