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Lack of skilled labor: A roadblock to India’s economic growth

Shivam Pathak

As a country endowed with labor, India’s situation is at best ironic. With ample employment opportunities, there is a high percentage of unemployed in the country.

India has the largest working population in the world.  More than 62 per cent of the country’s population is aged between 15 and 59 with 54 per cent below 25 years.  As per an estimate, India’s average population will be below the age of 29 after 2020. However, finding a skilled person for a job is a struggle for the recruiters. This is due to lack of skilled labor across the country. On one hand, domestic economic growth has created huge employment demand and job opportunities, while on the other, a lack of skilled labor is making more people unemployable. What adds to the irony is that there are 17 Central government ministries that offer skill development initiatives through school education, institutes of higher learning and specialized vocational training institutes. The large size of population, alone, can not be India’s problem, since, China with a similar scale of population and training structure, has better labor productivity.

Source: Planning Commission, Government of India

The proportion of formally skilled workers in India is extremely low, at 4.69 per cent of total workforce, as compared to 24 per cent in China, 52 per cent in US, 68 per cent in the UK, 75 per cent in Germany, 80 per cent in Japan and 96 per cent in South Korea. As per reports, more than 70 million individuals, aged between 15 and 59, will enter the Indian market by 2023. In the same timeframe, the nation’s total workforce will be around 404.15 million. According to the Periodic Labor Force Survey (PLFS) 2017-18, this figure will include 59 million between 15 and 59. The major concern is among IT- Industry, as India will struggle to find techies for 230,000 jobs in Big Data and Artificial Intelligence domain in near future. By 2021, this shortage is likely to rise to 780,000 vacant job posts.

Factors fueling skill shortage in the Indian job market:

Disparity between classroom knowledge and practical application- Quality education should establish a link between knowledge imparted inside the classroom and its practical application. But, most of the mainstream education institutions across the country focus on the theoretical part and this is among the most overlooked things in the Indian education system. Majority of the students are unable to understand and process the topics taught in class and end up rote learning for exams. Thus, fail to apply the knowledge practically.

Also, there’s a case of academic education not meeting the global standards. For instance, a three-year graduation certificate from an Indian institution is equivalent to a one-year diploma certificate in the US.

Shortage of relevant skills: Graduates right out of college do not possess on-the-job skills, which makes the recruiters apprehensive in hiring them. Furthermore, companies end up incurring huge losses in terms of training costs. There is also a high correlation between skill levels and education. This can be substantiated with the fact that only 3 per cent skill Level 1 individuals have high educational qualifications compared to 65 per cent workers of skill Level 4. The country’s low skill intensity and low education attainment present a major challenge in preparing the workforce.

Brain drain: Yet another problem is of brain drain. A major chunk of the students who pass out from the universities and other institutes, go to foreign countries in order to earn more money and make brain drain an integral part in the shortage of skilled man power.

Lower female participation: India has a labor force of 395.2 million, out of which only 91.6 million are women. In the technical space, absence of residential provision for female trainees at training centres is the foremost reason for lower women participation, followed by the lack of necessary social support via local workshops and scarcity of relevant coaching mentoring in these skill programmes.

In recent times, multiple skill development models are put in place, by the Indian government to tackle the country’s skill shortage. The government has launched several campaigns and programmes like Pradhan Mantri Kaushal Vikas Yojana (PMKVY) under Skill India. Focus should also be laid on raising the national standards of education. E-platforms like Coursera, NPTEL, should be promoted, to raise the country’s skill standards by providing online certification courses.

It should also be noted that, with education getting extremely expensive these days,  a major portion of the Indian rural population and the population which lives below the poverty line, are unable to get educated. Whatever education they get, is hardly vocational in any sense. Thus, even when these people get educated, they are hardly skilled, whatsoever. To tackle this: Firstly the government should more efficiently provide monetary assistance for those willing to go for graduation or higher education, either in the form of student loan or subsidized learning. Secondly, a well-defined public-private collaboration that takes technology-based learning beyond the cities, should be done. India must strategically increase technology penetration among its population. A majority of ‘young India’ continues to boom beyond the big cities, and that’s where technology must go.

The parameter of success depends on how efficiently India tackles its shortage of skilled workforce to keep its industries afloat. There is a requirement of consistent and effective effort to up-skill graduates and reskill the existing workforce. This will help meet the demand to fill vacant job positions in the present, as well as in future, across various industries.


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