Live Mint Prelims cum Mains

Skill development of the Youth: Pay heed to the market

Skilling need to benefit from demographic dividend:

  • With 65% of the population below 35 years, unemployment, especially among youth, can limit India’s ability to take advantage of the demographic dividend.
  • Recognizing this challenge, a wide range of stakeholders, including the government, companies, civil society organizations, and for-profit enterprises are working either independently or in cohesion to enhance youth employability.
  • The government has undertaken a structured approach via the establishment of the Ministry of skill development and employment and the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).


Models of making youth employable:

Currently four models are used for supporting youth employability in the country.

  • 1. Self-employment model: The self-employment model works on the rationale that if youth are trained in a particular skill, they will have the capacity to become micro entrepreneurs.
  • 2. Employer-led model: The employer-led model trains youth in specific skills relevant to an enterprise and then absorbs the youth into their own value chain.
  • 3. Placement-led model: The placement-led model, provides training to youth and also established linkages with potential employers.
  • 4. Market linkage model: The market linkage model provides end-to-end support to self-employed youth, assisting them in earning better incomes.


Challenges remain

  • The enormity of job-seekers in India means that much more needs to be done to skill them correctly so they can become employed.
  • There are several challenges in achieving this.

Structural challenges in unemployment:

  • Unemployment is higher among the formally educated in comparison to the illiterate.
  • There is higher youth unemployment in rural areas, while most interventions focus on urban areas.
  • There is a mismatch between the skill sets that industries require and the skill sets that youth are equipped with.

Leads to Demand-Supply mismatch:

  • Structural challenges result in a demand-supply mismatch of job-seekers and job demands, that can be summarized in following terms:
    • Aspirations: Mismatch between youth aspirations and the skills training being provided
    • Requirement: Mismatch in skills training and industry needs
    • Standardization: Poor industry buy-in for vocational training courses because of lack of standardization and universally accepted certification

Solutions must address the mismatch:

  • Solutions must focus on understanding aspirations, industry requirements and standardization across the skill-development value chain.
  • Well-designed interventions will be effective only if the candidates are willing, receptive and capable of absorbing the knowledge or skill being imparted by the intervention.


What is needed?

For candidates:

  • Candidate-selection framework would be useful:
    • Counselling in skilling programmes is hence essential to align the aspirations of programme beneficiaries with the expected outcomes of training.
    • Further, candidates may already possess specific complementary skill sets that could provide them with a competitive advantage.
    • A candidate-selection framework would greatly enhance the efficacy of such interventions.

For industry:

  • While designing skilling programmes, it is critical to map skills being imparted to the specific needs of potential employers. This will ensure that the skilling-to-employment loop is closed seamlessly.
  • Example of NSDC:
    • Placement failure:
      • A recent RTI request highlighted a failure of placement-led programmes undertaken by the National Skill Development Corporation (NSDC).
      • Of the 800,145 candidates trained through non-scheme skilling programmes in 2016-17, only 48.4% received placements.
    • Funding to be outcome based:
      • NSDC now plans to move to a model where training partners will receive funds as per the outcomes achieved.
      • The movement towards outcome-based funding is a welcome step towards strengthening future programme design.

For self-employment:

  • When it comes to designing programmes that focus on self-employment or entrepreneurship, it is important to assess demand for the product or service, and study policies or schemes that can be leveraged to enhance sales.
  • This is critical as beneficiaries of such programmes are expected to source their own work after the training.


Public Private Partnerships:

  • There is also scope for increased public-private partnerships.
  • Most skilling organizations struggle to access technical infrastructure/equipment, which constrains their scale.
  • Public-private partnerships (PPPs) can use existing under-utilized infrastructure available with educational institutions to facilitate vocational training and skill development.
  • PPPs can also facilitate finance and market linkages.
  • Examples:
    • For instance, partnerships with financial institutions can provide the seed capital (through government schemes such as Stand-up India) required by beneficiaries of self-employment models to set up micro-businesses.
    • Likewise, partnerships between companies and social enterprises can help access appropriate market linkages.
  • Regular monitoring/evaluation and impact-assessment activities are required for course correction and sharing best practices.



  • India’s demography provides a great opportunity for the country with regard to economic growth and development milestones.
  • For India to realize this opportunity, evidence-backed efforts to strengthen youth aspirations, the skill development ecosystem and markets (where youth can be employed) are necessary.



GS Paper III: Economy


Related question:

To address the structural problems of unemployment in India, solutions must focus on understanding aspirations, industry requirements and standardization across the skill-development value chain. Discuss.

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