The Skills India Needs

Business Standard     26th February 2021     Save    

Context: India needs decentralized design and implementation of skill programmes in line with the constitutional mandate for a concurrent list subject.

India’s Skilling Programmes and Initiatives

  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 3.0: is a short duration national skilling programme. 
  • National Skill Development Corporation (NSDC): is a public-private partnership supporting early-stage skill training institutions with soft loans and grants. (Courses certified by Sector Skills Council (SSC))
  • Industrial Training Institutes (ITIs): the backbone of the present skilling system; 14,000 ITIs across the country, and over 80% of these are private.
  • National Council for Vocational Education and Training will be a regulator for this field.

      Rationale for state intervention in Skilling System:

      • To prevent market failure due to positive externalities: Firms worry that the employees would leave, so some of the gains of her increased skills would go to future employers.
      • Difficulties of finance: Individuals face asymmetric information and lack confidence that spending money on skilling will generate a useful impact on their labour market prospects.

      Concerns and Problem in India’s Skilling System

      • Executive centralization: (of design, policy or skills programmes) ITI students are certified through executive bodies and not statutory regulators like University Grants Commission (UGC).
      • Limited state capacity: Government ITIs have average quality labs and equipment, and high vacancies and the least accountable and least motivated staff.
      • Inefficiency of private sector: average private ITI has less resources and delivers inferior results to the average government ITI.

        Way Forward: Ensure State intervention in Skilling System

        • Organize and separate State intervention- into the following sets
          • State production, i.e. government-run skilling programmes for individuals.
          • State financing, i.e. private persons run skilling programmes, and the government contributes some part of the fees.
          • State regulation, i.e. state, uses its power to intervene in the way private persons build skilling businesses.
        • Skilling programmes should not be defined around the formal and large scale employers only
          • For e.g., while the bulk of the Indian workforce is in firms with below ten workers if a person gains skills and becomes self-employed, that is a perfectly good outcome for society.
        • Building strong connections with employers: There is learning by doing, rather than learning in a classroom. Hence, everything should have a strong connection with employers.