Re-engineer the skill eco-system to train 21st century ready workforce to meet evolving economic realities


A bright spot in today’s otherwise subdued global economy, India symbolises a remarkable growth story for the world. ‘Skill India’ is one of Prime Minister Narendra Modi’s flagship initiatives aimed at sustaining this growth story and make India the world economic leader. FICCI and KPMG in India together launched a white paper titled ‘Reengineering the skill ecosystem’ at the FICCI-KPMG Skill Summit 2016 to trace the Indian growth story by tracking the Indian Gross Domestic Product (GDP) and Gross State Domestic Product (GSDP) of the states along with the evolution of Indian workforce over the years.

Mr. Mohandas Pai, Chairman FICCI Skill Development Committee and Chairman Manipal Global Education, elaborates, “This paper explores complexity and diversity of our country in terms of economic development, demography, geography, internal & international migration, unavailability of relevant data etc. There is an urgent need to evaluate our current scenario, look at future projections and reengineer the skill ecosystem accordingly.” As per the current forecast by the Ministry of Skill Development and Entrepreneurship (MSDE), there would be an incremental requirement of skilling 110 million additional workers by 2022 and to achieve this and reskill the existing workforce the ministry has embarked on a herculean task of skilling 400 million workforce by 2022. Mr. Pai Further elaborated that “the paper says that in the coming years, services and manufacturing are likely to create employment opportunities. However, to reach full potential, India needs to gravitate towards a formal system. Currently, only 4.69% of the Indian population has undergone formal skill training. There are two important trends vis-à-vis the Indian workforce that requires attention and action. First, the scope of job creation in formal employment opportunities and secondly, the implications of Industry 4.0 on future jobs.” The biggest problem before Skill India is the accuracy and reliability of data. The multiplicity of sources must be brought together if a coherent and comprehensive labor market information system is to be established, and this calls for a common information system as an essential component of the LMIS. EPFO, ESIC and other official statistics on government employees provide critical data on formal employment to identify industries to be prioritised for skill development. Skill gap studies for these growing sectors can provide additional information regarding skilling needs at an aggregate level. The paper also highlights the phenomenon of employment clusters. States such as Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Delhi together provided employment to 57 per cent of the nation’s formal workforce in 2014-15. This fact clearly indicates the high concentration of formal employment in some states.

Skill development in these States should be based on the industries cluster present Industries should be incentivized to set establishments in labour incentive states to arrest internal migration and skill development in these states be planned accordingly. Mr. Narayanan Ramaswamy, Partner and Head, Education and Skill Development, KPMG in India, says, “The bright side to the challenge of skill development is that the government recognises India’s favourable demographic dividend and is shouldering the responsibility of providing employment to the millions of youth in a big way. However, nothing short of a revolution is required in skilling and vocational education space, which in my view has assumed critical proposition and might well determine the future growth of this country.” The white paper touches upon strategic changes to re-engineer the ecosystem that can facilitate the transformation:

1. Policy-level actions – Developing skill development plans based on state level analysis of the major industries driving economic growth and rising formal employment opportunities by state and central governments is essential. With future growth coming from formal employment, an intensive Recognition of Prior learning exercise to certify available skills as per the National Skills Qualification Framework level also becomes vital.

2. Quality enhancement actions – An active role of industry is key to improve inspirational value of skill training programmes in India. Upgrading existing skill sets of teachers also needs to be formally undertaken. Special incentive can be provided to the industry by the Government in order to invest their 2% CSR funds towards skilling initiative in order to ensure adequate capitalization. Other systematic improvements – Improving the Working Population Ratio of females through women-centric component in Skill State Plans and annually monitoring and recognizing high performing states could be a positive step in this direction. Establishing and growing more skill universities is also one of the key suggestions.

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