United Nation Development Programme in ‘India Skill Report 2017’, highlighted that only 2.3% of India's workforce has undergone formal skill training compared to BRICS countries. Moreover, NSSO data shows that age group from 21- 35 years face higher risk of working poverty as they fail to get suitable employment.

Why skill development is needed?

•  In order to convert its demographic dividend into demographic assets.
•  Lack of skill required for specific job among the young graduates and lack of opportunities; to turn the existing skills into entrepreneurship and  innovations, has made a dent on human capital in India.
•  Ambitious programme like Make in India, Smart Cities and Digital India, require huge skill workforce.                                                          
•  The third generation labour reforms require the huge skilled labour force and India has the sufficient human resource to boom the international labour  market.
•  The slowdown in China and its ageing population is a major opportunity for India to become the manufacturing house of the world.

Why India lacks Skill Development?

•  Education: The education system are heavily relied on producing the clerical work force rather than skill man power. This in turn reflect in the lack of  demand for people who needed to be skilled.
•  Rapidly changing technology: There is always mismatch between the speed of change in technology and speed of changing skill set accordingly. Thus it is difficult to estimate the quantity and areas in which skilled workforce is required. It also raises requirement of higher order skill sets.
•  Social acceptance: our society gives lesser acceptance and recognition to vocational trained people than to other course. This lead to lack of moral  to go for skill training.
•  Unequal demand for skills in industries: various skill requirement and its demand varies industries wise.eg skill required for industries in coastal  area will be different from hilly area industry.
•  Lack of infrastructure and poor quality of courses: The infrastructure in most skill training centres is of poor quality and not upgraded. Hence there  is a huge gap between the industrial requirement and practical training in vocational institutions.
•  Inefficient trainers: Trainers in institution are following the conventional method of operating the machine, without updating the training methods.
•  Lack of Initiatives from industry: industries prefer the cost cutting measures, by not hiring the trained and skilled labour as they, it is observed that  SMEs prefer to hire an untrained or semi-trained worker at a cheaper pay-out than a formally trained or skilled worker.
•  Pending Labour reforms: complexity of labour laws is an inhibiting factor. The employers generally prefer automation and contract labour over  permanent to save themselves from labour laws development in India.

Way forward

It is estimated that the demographic dividend is expected to last for 25 years. Thus, to reap the benefits of this one-off opportunity India needs to significantly scale up its skill development initiatives and other structural improvements such as;

•  The Ministry of Skill Development and Entrepreneurship (MSDE) should shed its regulatory function with the establishment of oversight regulatory body.
•  The quality of outcomes from apprenticeship courses must be enhanced with increased transparency and robustness of the training along with  certification procedures.
•  Mandating educational institutions to recognize skill certifications and provide for upward mobility or lateral movements with placement rate target  of for 80% of total enrollment for 2020.
•  Sector Skills Councils with Qualification Packs (QP) and National Occupational Standards (NOS) must be synergize with National Skills Qualifications Framework (NSQF) should be required to cover all job roles in their sector over the next three years.
•  In parallel with the Recognition of Prior Learning (RPL) initiative launched with PMKVY, the identification of transferable skills should also be  established through developing framework of skills that are transferable across sectors and trades.
•  The recommendation of Sharda Prasad Committee of Scrap all existing overlapping skill councils, introduction of an oversight mechanism on the e NSDC through Parliamentary oversight, CAG audit, RBI supervision is need of the hour.