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Skills development is key to India's global competitiveness

Skills development is key to India's global competitiveness Skills development is key to India's global competitiveness

India's transition to a knowledge-based economy requires a new generation of educated and skilled people. Its competitive edge will be determined by its people's ability to create, share, and use knowledge effectively. A knowledge economy requires India to develop workers, knowledge workers and knowledge technologists - who are flexible and analytical and who can be the driving force for innovation and growth.

Skills and knowledge are the driving forces of economic growth and social development for any country. Countries with higher and better levels of skills adjust more effectively to the challenges and opportunities of the world of work.

The objective of Skill Development is to create a workforce empowered with the necessary and continuously upgraded skills, knowledge and internationally recognized qualifications to gain access to decent employment and ensure India's competitiveness in the dynamic global market. Quality and relevance of skill development are key to India’s global competitiveness as well as improving an individual’s access to decent employment. For enterprises to compete in the global economy, the quality of training must reach world standards and be relevant to the needs of national and international markets.

It aims at increasing the productivity and employability of workforce (wage and self-employed) both in the o rgan i ze d a n d t h e u n o rgan i ze d s e c t o r s. I t s e e k s i n c r e a s e d p a rt icip at io n o f you t h , women , disabled and other disadvantaged sections and to synergize efforts of various sectors and reform the present system with the enhanced capability to adapt to changing technologies and labour market demands.

At present the capacity of skill development in India is around 3.1 million persons per year. The 11th Five Year Plan envisions an increase in that capacity to 15 million annually. India has target of creating 500 million skilled workers by 2022. Thus, there is a need for increasing capacity and capability of skill development programs.

In 2004-05, the total employment in the country was estimated at 459.1 million out of which 56.8 per cent of workforce belonged to self-employment, 28.9 per cent to casual labour, and 14.3 per cent to regular wages. About 8 per cent of the total work force in India is employed in the organized sector, while the remaining 92 per cent are in the non-formal sector.

The demographic advantage that the country enjoys, coupled with prospects of global shortages in skills as the world population ages, means that the country could be supplying skills to the world. According to the study by Boston Consulting Group for PHD Chamber of Commerce and Industry has estimated that by 2020 the world will have shortage of 47 million working people but India will have a surplus of 56 million people. In order to reap the benefits of demographic dividend, India will have to, therefore, equip this manpower to meet the requirement of skill talent across geographies.

Improving the relevance and reducing skill mismatch of skill development requires establishment of Labour Market Information System (LMIS) and Human Resource Planning (HRP) for the reliable and realistic assessment of economic trends and labour market needs. Sector specific LMIS will be established at national and state levels, and area specific ones at local levels with the help of Sector Skill Councils (under National Skill Development Corporation) to undertake labour market analysis.

Approximately 93 per cent of the country's workforce is in the unorganized sector. The sector cuts across all economic activities and includes rural and urban areas. It contributes to about 60 per cent of the country's GDP. Strengthening the skill base of the unorganized sector will improve productivity, working conditions, labour rights, social security and living standards. Skills of local trainers will be upgraded in modern techniques, technologies and pedagogy. They will be trained and developed into master craftsmen. Opportunities for linking these arrangements to formal training institutions will be explored to extend expertise, pedagogical support and tools and equipment.

To make the existing vocational education system relevant to market needs, a major restructuring of the system and how it is managed will be needed. If India wants to emulate countries where the vocational education system has succeeded, sweeping reforms are needed. This will require significant commitment on the part of policymakers. Many of these reforms are similar to those being proposed by the 2005 Central Advisory Board for Education (CABE) Committee report on Universalization of Secondary Education.

Key among them include:

• Ensuring private sector participation in management of institutions and curriculum design to ensure a direct connection to the labour market for graduates, and an effective medium for bringing about organizational and productive innovations.

• Strengthening the general education component of these programs for providing basic knowledge in humanities and sciences, preparing students to work in various occupations, teaching them to solve problems and encouraging them to continue learning.

• Funding and budget allocations - moving from a system which is exclusively financed by the government to a system which is increasingly financed by the private sector and by students paying user fees. The private sector would be willing to contribute only if they see that the system is producing relevant graduates. Students are likely to contribute if they see accrual of labour market benefits from vocational education.

• Ensuring that vocational education is not a dead end - allowing well performing students in the vocational education track to proceed onto higher education will ensure that the vocational stream is not seen as an option of last resort by prospective students.

• National Skill Development Corporation will also prepare a skill development plan to meet the expectation of labour market including requirement of unorganized sector. The Corporation will also submit annual report in specified format on skill development carried out during the year.

• To propose a structured and pragmatic solution to the lack of relevant skills amongst the current and workforce of India.

• To deliver a structured, sustainable and scalable framework to impart skills to the unemployed, craftsmen. Opportunities for linking these arrangements to underemployed, uncertified and un-benchmarked workers. (KNN)

Disclaimer:  Views expressed in the blog are of the author.  KNN will not be responsible in any manner for these views and any factual error that may appear in the write-up.

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