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.
- 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?
- 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.
- 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.
- Placement failure:
- 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.
- 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
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.