Skill India: Fill the gap

The lossin India's competitiveness in textiles and clothing can be seen to be a resultof diminishing productivity, owing to a persistent skill gap in the sector. Asevere shortage of skilled labour that India's textile industry faces today isbeginning to pose a threat to the economic growth of the country, writes Prateek Kukreja.

We are a young nation, with around62 per cent of our population in the working age group (15-59 years) and morethan 54 per cent of the total population below 25 years of age. As we standtoday at the threshold of becoming one of the world's fastest growingeconomies, a large and young labour pool, in fact, serves as a double-edgedsword. While the demographic dividend that the country possesses is definitelyan opportunity to climb up the growth ladder, it also reflects the inability ofthe government to employ India's upcoming generation of young workers. Thisinability to create jobs for the growing population is largely attributable tothe persistent skill gaps and mismatches existing in the labour market.

On July 15, 2015, when PrimeMinister Narendra Modi launched the Skill India campaign from Vigyan Bhawan,New Delhi, the aim was to train over 400 million people in India in variousskills by 2022. The campaign encapsulated various initiatives like NationalSkill Development Mission; National Policy for Skill Development andEntrepreneurship, 2015; Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and theSkill Loan scheme. The need for these initiatives was felt in the wake of dismalmanufacturing performance, particularly in the organised sector, faced with lowproductivity and sluggish employment growth. Consequently, these wereintroduced realising the fact that India lags behind other nations in terms ofits skilled workforce.

According to the National Policyon Skill Development and Entrepreneurship, 2015 estimates, before itsinception, only 4.69 per cent of the total workforce in India had undergoneformal skill training as compared to 68 per cent in UK, 75 per cent in Germany,52 per cent in US, 80 per cent in Japan and an astonishing 96 per cent in SouthKorea. The Labour Bureau Report 2014 estimated the skilled workforce in Indiato be as low as 2 per cent, which was much lower than even other developingeconomies. As per a skillgap study conducted by the National Skill DevelopmentCorporation (NSDC) over 2010-14, there was an additional net incrementrequirement of 109.73 million skilled manpower by 2022 in twenty four keysectors, whereas the Economic Survey 2014-15 had clearly stated that there is aneed of 120 million skilled people in the nonfarm sector for the period 2013-14,and the number has increased since then.

While a persistent skillmismatch has had an adverse impact on most industries, it is more pronounced incase of a labour-intensive industry like textiles, which is one of the largestsectors, not only in terms of size, but also in terms of providing employment.Being the second largest employer after agriculture, it provides directemployment to around 45 million people. India is also the world's secondlargest exporter of textile and clothing, after China. In order to meet thegrowing export demand, Indian textile industry currently requires around 10million trained workers.

Various schemes have been implemented to cater to the skilled manpower needs of various segments of the textiles industry. Apart from various schemes for textiles under the Skill India mission, the Integrated Skill Development Scheme (ISDS) for textiles, for which the government allocated $300 million, aimed to train over 2.67 million people up to 2017, covering all sub-sectors. However, as per the recent figures released by ministry of textiles, till date only 0.85 million people have been trained under ISDS, which is much lower than even 50 per cent of the target figure.

Two years into the campaign, the time is ripe to assess and evaluate its impact and effectiveness on employment and productivity. The fanfare and ballyhoo, coupled with ambitious targets, with which the Skill India mission was launched had no doubt, given a fresh spur to previous feeble efforts. It was hoped that the reconstituted efforts in the direction would certainly result in improved human development. An appropriate skill development framework was expected to be put in place which could effectively remove or at least reduce disconnect between demand for and supply of skilled manpower for existing and future jobs. The textiles sector, in particular, having the potential to create 45-50 per cent of direct jobs in rural India, was expected to drive the Skill India mission.

Unfortunately, this doesn't seem to be the case so far. A government-appointed panel itself reports that the PMKVY, which spent over Rs1500 crore in skilling, has failed to achieve the key objective of increased job creation, and has ended up monetarily benefiting a number of private training institutes. While the government claims to have trained about two million youth so far under the mission, there are found to be inconsistencies with respect to quality as well as transparency in candidate enrolment. This raises serious concerns over the efficacy of these government-subsidised initiatives introduced under the ambit of Skill India. Therefore, it wouldn't be wrong to say that the institutional framework set up by the government under this campaign has failed so far to meet its central objective of improving formal skill training of the population.