Bridging – India’s Skill Gap

09 Mar 2020

India, with a population of 1.3 billion and a median age below 30 is one of the few countries that can meet global talent needs. The Indian workforce is estimated to increase by 27 percent by the year 2022, to approximately 600 million from the current 473 million according to the India Skills Report 2019 by Confederation of Indian Industry (CII), Wheebox and Peoplestrong. 

The ideal way to leverage this demographic advantage is by focusing on jobs. A growing concern is that there is a shortage of candidates with the right skillsets who can fill up those roles.

To fit into new job roles, there should be a major focus on skilling and reskilling so that talent demands of the future are met. CII has been working on the Skills Agenda since 1987, with a focus on policy, recommendations, research, and on-ground initiatives.

Below are some of the key suggestions from CII for bridging India’s skill gap.

Focused Sectoral Approach

Skilling should be focused on sectors that are manpower-intensive and on a high growth trajectory like construction, textiles and apparel, hospitality and tourism, transport and warehouse, and healthcare. Skilling should also apply for emerging sectors like Fintech and e-commerce.

Labour Market Information System (LMIS)

Skill mapping is a crucial element in imparting skill training. Skill mapping pertains to skill requirements and job availability. To ensure a structured skill mapping, a system called Labour Market Information System (LMIS) could be instrumental in aligning skills requirements and job opportunities. 

Scaling up Apprenticeship

Fresh graduates should have employable skills so that they can secure relevant jobs in the industry. These graduates can become industry ready with adequate skilling attained by restructuring the existing curriculum of the training institutes with industry requirements.

By training apprentices, the talent pool can either be absorbed in the organisation where training is imparted or in other organisations in the same sector. MSMEs that do not have adequate resources for skilling and training can benefit from this situation.

Currently, the Ministry of Skill Development and Entrepreneurship, Ministry of Human Resource Development and All India Council of Technical Education are the nodal departments for the apprenticeship programme. It could be consolidated under one Ministry as it simplifies the approval process. A sustained campaign highlighting the financial benefits associated with apprenticeship can be useful in scaling up apprentice uptake by the industry.

Skills Voucher

For aligning the workforce with skills that are relevant in the Industry 4.0 era, skill upgradation, especially in high-growth sectors is an absolute must. In line with the skills mission of providing incentive-based support, redeemable skill vouchers (or digital skill wallets) could be issued. It can be used to incentivize the youth for undertaking skilling programs of their choice and paying for training imparted from approved training providers through the redeemable value of the vouchers.

Industry Volunteerism

Industry Volunteerism can play a significant role in driving the skills ecosystem through either providing trainers or assessors, and on-ground support, among others. To encourage volunteer participation, volunteerism should be recognised under Corporate Social Responsibility (CSR) by the Ministry of Corporate Affairs (MCA).

Volunteering services like training of trainers, counsellors, and assessors under CSR will result in increased industry-wide participation.

Tax Rebate for Skilled Talent Pool

To lend support to the industry, the Government currently gives tax rebates under 80 JJAA of the IT Act. For creating an ecosystem consisting of a skilled and certified talent pool, this tax rebate should be linked to the intake of the skilled and certified workforce.

According to the India Skills Report 2019, 68.3 percent women graduates do not have paid jobs in urban India. The Indian economy can grow faster at 9-10 percent if there is gender parity and the share of women workforce goes up to 48 percent.

Higher participation by women will benefit the economy. To improve their participation, concerted efforts should be made in creating employment opportunities, improving workplace conditions with adequate policies, access to skills in conjunction with access to finance and marketing, and more.

To summarize, if India wants to reap the current demographic advantage, it is pertinent that bridging the skill gap should be at the top of its agenda.

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