Analysing Skill Development Policies In India And The Way Forward

Abstract

India is currently the 5th largest economy in the world according to the IMF data based on growth and nominal GDP and is on track to become third-largest by 2030 and second-largest by 2075. Skill development is the most essential aspect of our country. The median age in India is 29 years against the average age of 37 years in China and the US and 45 years in Western Europe implying that India has a huge demographic dividend. A well-designed and implemented skill development policy is essential for India to reap the benefits of its demographic dividend. India’s young population must be equipped with the skills necessary to compete in the dynamic global economy. Otherwise, the demographic dividend could become a demographic disaster, as a large unskilled workforce would be unable to find employment. To cater to such demands, the government is actively engaged in formulating and implementing new skill policies in the country, the most important being the ‘SKILL INDIA MISSION’ which started in 2015. It is an umbrella scheme under which the government is running various schemes. This paper revolves around analyzing the skill development policies and India and a comparison with Switzerland which is one of the most highly skilled nations in the world. This paper also tries to understand the problems faced by India working upon which can help India produce workers with higher skills.

Literature Review

In order to understand the Skill Development system, the research paper of Vandana Saini titled ‘Skill Development in India: Need, Challenges and Ways Forward’ has been referred. In that paper, the author has written about the problems and possible solutions of skill development before 2015 since it was published in 2015. A research paper by Matthias Pliz and Julia Regel titled ‘Vocational Education and Training in India: Prospects and Challenges from an Outside Perspective’ has been studied. The authors have referred to various other research papers to understand the issues of skill development policies. The common aspect in both these papers is the problems that India faces in skill development. The website of the Ministry of Skill Development and Employment has been referred to study the current schemes of the government.  A case study of Switzerland has been studied as Switzerland is among the highest-skill developed countries in the world. A report by Niti Aayog titled ‘Transforming Industrial Training Institutes’ published in January 2023 has been referred to study the current situation of ITIs in India.  This paper will critically analyse the skill development policies in India and compare them with Switzerland’s policy and will suggest some possible solutions to effectively implement the current policies.

Introduction

India is a country of almost 141 crore people according to United Nations Population Fund and accounts for nearly 18 percent of the world’s population. Out of these 141 crore people, nearly 67.8% of the population come under the working age group in 2022 according to the OECD (Organization for Economic Cooperation and Development) while in European Union countries and the USA, the working age population is 63.8% and the 64.8% of the total population. Considering the fact that India has a growing population as compared to the developed countries which are experiencing stagnant growth in their population, India will have a tremendous advantage of a large working-age population.   According to the reports of EY, India’s dependency ratio will be the lowest in its history by 2030 at 31.2%. India’s young dependency ratio —the number of children below 15 years of age relative to the total population — is expected to overtake the old dependency ratio (ratio of population aged above 65 years relative to total population) by 2056.  About 24.3% of the incremental global workforce over the next decade is expected to come from India.

Population dividend is an open secret to India. The average age in India is 29 years against the average age of 37 years in China and the US and 45 years in Western Europe. To become the world’s third-largest economy by 2030 and second-largest by 2075 by surpassing the U.S.A., Germany, and Japan. The population dividend will aid in making this happen. The population dividend is an advantage particularly if the young population can cater to the demands of the dynamic nature of the globalized economy. This can be done if the skill development policies in India are effectively planned and efficiently implemented. It is important for India to look at the skill development policies of countries such as Singapore and Switzerland which have a skilled population of 50.5% and 71.8% respectively compared to India’s statistics which reflects a meager figure of 21.2% according to the Human Development report of UNDP in 2020. Skilling the workforce is not only crucial for the economy but also for the socio and cultural aspects as it brings the positives in the human development index which is the primary calculator of the quality of life of a nation. In this aspect, skill development emerges as one of the most critical aspects of a country.

Background

Since independence, India has come a long way in upskilling its population. The government of India designed a policy framework namely, Craftsmen Training Scheme. This scheme was launched in 1950 and aimed at developing the skills among the population in the country. The scheme is implemented by DGT(Directorate General of Training). The DGT has established a network of 15,000 ITIs ( Industrial Training Institute) across the country to deliver the CTS training. It offers wide range of trades including engineering trade, construction trade, electronics  trade, hospitality trade, etc.  The skill development ecosystem includes the Apprentice Act of 1961, a formal way of skills acquisition. The Apprentice Act, 1961 ensures that there is participation from the industry in the skill development of the students undergoing a formal technical education. The Act aims to make it mandatory for establishments in the private and public sector to train the students. The industry has to provide on the job training to the students hence giving them a real world exposure to skills and processes and making them employable in the labour market.

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