India’s so-called demographic dividend could turn into its biggest liability.
By 2026, 64 percent of Indians are expected to be in the working age group of 15-59 years, making it home to the largest workforce in the world. Yet the government’s much-touted goal of providing skills training to 400 million people by 2022 is unlikely to be met, increasing India’s significant unemployment burden in a country where 69 percent of jobs are under threat from automation.
And with more than a million job seekers entering the market every month, India is already struggling to place its army of workers. The clamor for jobs and income security has spilled onto the streets as Prime Minister Narendra Modi — already battling a sharp slowdown in economic growth — struggles to deliver on the promises of job creation and income growth that swept him to power.
Manoranjan Sahoo joined India’s flagship training course this year to upgrade his skills in the hope that it will finally end his six-year wait for a steady job.
Four months after completing the course, there are still no takers for the 24-year-old trained mine electrician from Odisha, one of India’s most mineral-rich states. Sahoo is one of 10 million Indians to be trained under Prime Minister Narendra Modi’s $1.8-billion skilling program by 2020. About 90 percent of the 3 million people trained are yet to find a job under the program that is designed to provide employment for those trained.
India is battling a raft of hurdles, from poor management, funding and infrastructure to a shortage of qualified trainers and lack of enthusiasm for government programs. There’s also a lack of job opportunities for newly trained and re-trained youth in the slowing $2-trillion economy where companies — bogged down by bad debt and poor demand — aren’t building more factories.
Even when companies need to hire, government programs are unable to bridge the skills gap in the nation where the ministry’s own data indicates only 4.69 percent of the workforce has formal vocational skills. Almost a decade since India’s National Skill Development Corp. was set up, more than 30 percent Indians between the ages of 15 and 29 are neither employed nor in education or training, according to the OECD economic survey.
Modi is aware of the challenge. After three consecutive years of unmet targets, he asked skills minister Rajiv Pratap Rudy to relinquish charge and handed the mandate to energy minister Dharmendra Pradhan.
“We will ensure that we deliver on his expectations,” Pradhan said on Sept. 4 when he took charge. Pradhan has said his ministry will “explore all possible” means “to enable a more efficient outcome of our programs and schemes in skills.”
Speaking over the weekend in Washington, Finance Minister Arun Jaitley said it was the government’s most important priority to find ways to provide employment to the 12 million young people entering India’s workforce annually.
A spokesman in the prime minister’s office, Jagdish Thakkar, did not respond to calls seeking comment.
In 2009, India announced a target to skill 500 million people by 2022. Modi followed up the efforts in 2015 with plans to skill a further 104 million fresh entrants, as well as retrain 298 million farm and non-farm workers.
But in only one of the last five years have the 20 ministries implementing these programs met their annual targets. One of the biggest reasons is poor planning.
“In our consultations with various stakeholders, all of them said in one voice that the targets allocated to them were very high and without regards to any sectoral requirement,” said a December 2016 report by the government committee set up to review the skills plan. “Everybody was chasing numbers without providing employment to the youth or meeting sectoral industry needs.”
There’s still much to be done to provide employment to those coming out of these courses, but a good foundation has been laid, said Sougata Roy Choudhury, senior director for skills in the Confederation of Indian Industry. “The challenge is to how to mobilize serious candidates, give them quality training, create superior infrastructure, boost capacity of trainers, streamline accreditation of the training centers and get greater industry engagement.”
The government is trying to smooth initial confusions, according to Sandip Katna, chief operating officer at the New Delhi-based IACM Smart Learn Ltd. which has been training students under skills programs since 2010 and runs centers in Odisha and Delhi.
“The guidelines for setting up centers have become stricter and scrutiny has been tightened,” Katna said.
Sahoo worries companies are not coming forward to hire people even after they’ve acquired the necessary skills. “I don’t know when my fortune will shine,” said Sahoo.