Skill India Mission Is Faltering And Needs Urgent Attention

Skills and knowledge are a prerequisite to the social and economic growth of any country, and people with higher skill standards adjust more effectively to changes influenced by overwhelming waves of globalisation. Many developing countries are currently grappling with the critical challenge of how best to skill their population. This is more so in India, which has the world’s largest youth population and will have the world’s largest workforce by 2020.

Effective policy intervention could, ideally, provide the country’s youth with the choices necessary to move towards a better life. Recognising the challenge, the central government launched the Skill India initiative in 2015 under the Ministry of Skill Development and Entrepreneurship (MSDE) with an aim to train over 40 crore people by 2022. To put this in perspective, less than 5 per cent of the country’s total workforce has had skill training as of the beginning of this year.

Let’s take a look at how the government’s flagship scheme is faring.

The MSDE’s 2016-17 annual report reveals that by December 2016, only 18.52 per cent (463,221 of 1,250,000 people) of the target demographic had been trained by the ministry in the 2016-17 fiscal and 814,000 people of a target of 1,375,000 people (59.20 per cent) received entrepreneurship training.

With close to 50 skill development schemes coordinated between 20 departments across ministries, the creation of a nodal ministry to overlook progress was a step in the right direction, but the picture still remains bleaker than one would imagine. By March 2017, the MSDE had spent only 41.79 per cent of its budget (revised estimates) for the entire financial year of 2016-17.

Problems in skilling haven’t been restricted to the previous fiscal alone. In 2015-16, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) had a target of training 14 lakh youth in the country apart from 10 lakh beneficiaries under the ‘recognition of prior learning’ category. By March 2016, 17.89 lakh youth had been enrolled across the country, of which 11.87 lakh had completed training and only 55,712 youth had been placed in a company.

The situation in North Eastern states, Daman and Diu, Andaman and Nicobar Islands was more dire where, of 44,798 candidates in March 2016, only 1,367 candidates had been placed.

There isn’t much to cheer about in the 2016-17 fiscal either.

Prospective reasons for this bleak state of affairs can be better understood from the Lok Sabha’s Standing Committee on Labour reports on MSDE’s Demand for Grants for the fiscal 2016-17 and 2017-18. (PDFs)

Funding Issues

The Ministry, for fiscal 2016-17, was allocated Rs 1,804 crore against its proposed budgetary requirements of Rs 8,062 crore. Within this, Prime Minister Narendra Modi’s flagship Yojana (PMKVY aka Pradhan Mantri Kaushal Vikas Yojana) was allocated Rs 1,100 crore against the proposed Rs 4,078 crore. The Technical Assistance Scheme under National Skill Development Corporation (NSDC) was allocated Rs 250 crore instead of the proposed Rs 1,401 crore, Multi Skill Training Institutes were allocated Rs 50 crore instead of the proposed Rs 750 crore, Apprentice and Training Programs were allocated Rs 286.7 crore instead of the proposed 1,250.65 crore and Skill Development and Entrepreneurship were allocated Rs 50 crore instead of the proposed Rs 250 crore.

This year, the ministry was allocated Rs 3,016 crore against the proposed amount of Rs 8,500 crore, which means that only 35.49 per cent of the proposed allocation has been approved by the Ministry of Finance. This, according to MSDE’s interpretation, will hamper envisioned progress within key schemes.

“The schemes going to be impacted are Pradhan Mantri Kaushal Vikas Yojana, National Apprenticeship Promotion Scheme (NAPS), EAP – STRIVE (Skills Strengthening for industrial value enhancement), EAP - SANKALP, Setting up of Skill Training Centres in Kendriya Vidyalaya/Navodaya Vidhyalaya, Setting of 1500 Multi Skill Training Institutes (MSTI), Setting up of new ATIs/Indian Institutes of Skill."

Need for Qualified Trainers

The MSDE set a target of skilling 10,000,000 youth by 2020 to which the committee’s response is that equal importance must also be given to maintaining a pool of qualified teachers to achieve these ambitious targets, the lack of which could be a cause of major hurdles in the implementation of current training.

Lack of Placement Data

Placements, as mentioned in the report, were not mandated by key schemes until the their importance was reiterated in the second phase of the PMKVY in October 2016. In relation to the same, the creation of an institutional mechanism to track placements called ‘The Skill Development Management System’ theorised by the ministry is still under the process of construction. This very goal of aligning training to placements was articulated in the National Skill Development Policy of 2015, which hoped for the creation of a structure to “link skills development to improved employability and productivity in paving the way forward for inclusive growth in the country”.

The NSDC, by March 2017, claimed that it had collected only 18 per cent of placement data for its flagship outreach programmes, which is a tiny constituent of the larger skill development paradigm in the country. The Labour Management Information System (LMIS) hopes to align certified candidates to prospective employers with sector-specific granularity. Nonetheless, the country finds itself in a situation where:

1. Only 18.52 per cent of targets have been recipients of training due to massive reductions in proposed budgets;
2. Placements as an articulated goal have been incorporated into scheme guidelines more than a year after operations began in 2015, due to which there exists no institutional mechanism to track progress with granularity and cohesiveness and;
3. The distribution of ITIs on a scheme-wise basis is not publicly disseminated on the NCVT portal or the LMIS which is a deterrent to the interests of transparency in allocations.

The administrative machinery needs to buckle up. The next 20 years will see the labour force in the industrialised world decline by 4 per cent, and increase by 32 per cent in India. Skilling India is critical to transforming the country from a developing economy into a developed one. Reaping this demographic dividend in a manner that truly empowers people and equips them with the skills necessary for equitable market access is a significant challenge that needs scrutiny, reform and effective political will. Without skills, the youth won’t have the jobs, and without jobs, India risks turning its demographic dividend into a demographic disaster.