Quantity & quality: policies to meet the twin challenges of employability in Indian labor market.
| Author | Mehrotra, Santosh |
| Position | By Invitation |
Quantity & Quality
The demographic dividend is contingent upon two pre-conditions. First, those joining the labor force must get productive employment, preferably in non-agricultural sectors (manufacturing, nonmanufacturing and services). It also implies that the productivity of those who are currently under-employed and in the labor force will have to be enhanced. In addition, those who are currently in labor force but are unemployed, must also find employment. Second, those new entrants to the labor force, mainly consisting of those who complete education and are looking for work (a growing sub-set of which is adolescent girls who are continuing in education even after attaining 15 and will enter the labor force soon), will also have to be educated and made employable through skill development. It is only then that they might attain productive employment. Between 2000 and 2005, the labor force grew by 12 million per annum. However, on account of the declining population growth rate, the new entrants into the labor force have declined since then quite significantly to approximately 8 million per annum. Non-agricultural jobs have been growing at about 7.5 million new jobs per annum between 1999-2000 and 2004-05 and again since 2004-05 until 2011-12. Since the growth rate in the labor force is to continue to fall, the challenge for policy makers is to ensure that the pace of non-agricultural employment creation is sustained at least at the current absolute level of 7.5 million new jobs per annum. In fact, the open unemployment rate has been continuously falling over the last decade, and at the current rate of non-agricultural job creation should continue to fall.
However, the big challenge in regard to job creation is that the quality of jobs and the quality of skills embodied in jobseekers must improve. Among other things, skill development program can contribute significantly to preparing new job entrants as well as existing workers in the work force to improve their productivity, thus raising income.
India's neglect of elementary education in the first four decades after independence (i.e. between 1950 and 1990) had led to millions joining the labor force without even completing elementary education. As a result in 2009-10 the share of the labor force (in the age group of 15-59) that was not even literate was 29.1 per cent, or 125.7 million of the 431.2 million labor force. In addition, another 23.7 per cent of the labor force had either primary or below primary level of education (102.4 million) (Mehrotra et al, 2013).
A further 17.6 per cent of the labor force (or 76.1 million) had only acquired a middle level of education (i.e. up to class 8). In other words, 70 per cent of the labor force in India, as recently as 2009-10 had less than secondary education. In addition, the vocational education system in the higher secondary level had remained stunted, with only 3 per cent of those who were in higher secondary education (11th and 12th) in the vocational education stream, as compared to 43 per cent of youth at the secondary level of education in China who were in the vocational education stream (Kuczera & Field, 2010). The share in India is beginning to grow, but only slowly. It is not surprising, therefore, that only 2 per cent of India's workforce had acquired any form of formal vocational training, and an additional 8 per cent of the workforce had acquired vocational training informally on the job. In other words, only 10 per cent of the workforce and 20 percent of the non-agricultural workforce had acquired vocational training of any sort, formal or informal kind (Mehrotra et al, 2013).
Mehrotra et al (2013) estimate that between 2012 and 2022, India will need an additional almost 300 million that will need to be skilled. Of this number some 100 million youths will need to receive general academic education at least up to the secondary level (i.e. complete class 10). In addition, those who have acquired training informally on the job will need some formal vocational training, and also certification of their already achieved vocational skills (55 million). Further, we estimated that at least 136 million youthful new entrants to the labor force will need to be provided vocational training on a formal basis. The task clearly needs an expanded school education system and additional vocational training providers, as well as for India's companies to undertake more vocational training. The task is stupendous, if not monumental. (1)
Barely 2 per cent of the total workforce have formally acquired VET skills (2). It essentially consists of the following four segments, the first three of which relate to pre-employment VET and the last is undertaken in-house after employment. First, vocational education is offered only at the higher secondary level (classes 11 and 12). In other words, in the school system, the only possibility for a young person to acquire any vocational skills arises when the youth has achieved the age of 16, and enters the higher secondary level. Thus, unlike in China where children can opt for either the general academic or the vocational scheme after completing 9 years of compulsory academic education, in India children do not have any opportunity to acquire vocational education until they have completed at least secondary schooling (classes 9 and 10) at general academic level. Not surprising that only 3 per cent of all youth of the relevant age group are in the vocational education stream (Planning Commission, 2008).
Second, the Ministry of Labor runs industrial training institutes (ITIs) (nearly 2000 in 2011) in the public sector. In addition, there are about 8000 private ITIs that are supposedly regulated by the Ministry of Labor. Children who have completed 8 years of education can enter in some vocational training courses in these ITIs, but most courses require at least 10 years of general education. In addition to the Ministry of Human Resource Development and the Ministry of Labor, 19 other central line ministries provide training to numbers that are much smaller.
Third, since 2010 when the National Skill Development Corporation (NSDC) was created hundreds of new private providers have emerged across the country, which are financed by the NSDC. (3) In addition, there are a very large number of private vocational training providers (VTP) who are...
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