Right to Entrepreneurship and Aspirations

Photo Source: Linked in

This is in response to Professor Shamika Ravi’s article, “No monkey business” (Indian Express, May 3, 2014), wherein she says that the “general improvements in physical and financial infrastructure have contributed significantly more to the growth of entrepreneurship in India than specific targeted policies of the government”. The Congress Party promised in its 2014 Lok Sabha elections manifesto a “Right to Entrepreneurship that will protect and assist all those who seek to become entrepreneurs”. There seems to be some serious confusion in dealing with the idea of the right to entrepreneurship. The right to entrepreneurship essentially mean the broad term of institutional framework rather than taking one of its sub-sets like the “physical and financial infrastructure” which the writer seems to be taking by underestimating a whole lot of other factors in a “Business Environment” or business eco-system. Moreover, there is a fundamental difference which the writer seems to miss notoriously. The difference is the policy perspectives of distinction between fostering new entrepreneurship opportunities and supporting existing enterprises.

At present, the aspiring Indian entrepreneurs are facing acute challenges related to structural issues such as finance (credit), legal and taxation, operational/functional, infrastructure and technology diffusion. The institutional perspective of a “right” to claim a defined service from a public authority would essentially deal with its totality. In the case of promoting entrepreneurship through a rights based approach, the aspiring entrepreneurs are entitled to demand services dealing namely from starting a business to closing a business by a law which facilitates services within a specified timeframe. In other words, the aspiring entrepreneurs should be guaranteed with a legal right to claim a service from a public authority within a timeframe as immunity.

 According to the World Bank’s Easy of Doing Business Report (2014), in India, to start a business it takes 27 days vis-à-vis 16 days in South Asia and 11 days in OECD countries. In terms of number of procedures, India has 12 procedures as compared to 7 in South Asia and 5 in OECD countries. In case of India, the 12 procedures have to be approved by both Union and State governments. Significant amount of delay in processing of each of the 12 procedures would be possible and are indeed in common practices. There are also considerable costs involved in each of the procedures processing in the government. In India, the cost of per capita income for starting a business is also high at 47.3% as compared to 19.8% in South Asia and 3.6% in OECD countries.

 Further, the World Bank Report (2014) shows the exact number of procedures involved in each stage and how many days takes to complete official process: for starting a new business (12 procedures and takes 27 days), dealing with various construction permits (35 procedures and takes 168 days), getting electricity connection (7 procedures and takes 67 days), registering property (5 procedures and takes 44 days), getting institutional credit (8 procedures), paying taxes (33 times in a year), enforcing contracts (46 procedures and takes 1,420 days), resolving insolvency (minimum 4 years to close a business), etc. All of these are seriously hurting especially the poor aspiring entrepreneurs much more than others because the poor entrepreneurs lack either capital or skill or both. Particularly, getting institutional credit in right time to start a business is really a daunting task for poor entrepreneurs.

 All over the world, the micro, small and medium enterprises are promoted vibrantly by the government interventions by the approach of institutional framework. Therefore, by guaranteeing a legal right to aspiring entrepreneurs in a structured institutional framework would inevitably enable them to demand not only clearing of all the processes and procedures within a timeframe from both Union and State governments but also go beyond and facilitate legal framework to reduce huge costs involved in the starting of a business to closing a business.

 According to Dr.Pronab Sen (2014), “The Economic Censuses demonstrate the huge size and growth of entrepreneurial activity in India... the net increase in the number of non-agricultural establishments in the country is about 8 million every ten years. While admittedly many of these enterprises reflect basic survival strategies, many do not.  The past decade has shown the dynamism that is possible in this sector under the right circumstances and with the proper policies. Many of the leading corporate houses existing today belonged to the SME category at the turn of the century.” The specific targeted policies of the government had its role helping of the once tiny SMEs become big corporate houses now! The UPA’s initiatives like MSMEs Development Act, 2006 has also played a major role.

 In a recent research paper by Bandiera et.al (2012) found that the “very poor can be transformed from labourers into basic entrepreneurs and that this occupational transformation is associated with dramatic improvements in their economic lives, bringing them closer to the middle classes in their communities on measures such as wages and spending.”  Further, the study shows that the “entrepreneurship programme in Bangladesh – the Ultra Poor programme, operated by the Bangladeshi NGO BRAC. The Ultra Poor programme provides asset transfers and skills training to the poorest women in rural communities. The programme aims to move these typically asset-less and unskilled women from low-wage and seasonal jobs to the more secure, self-employment based occupations, which are the choice of middle class women in these communities.”

 The structural reforms in the informal sector are yet to be embarked in a major way to create an enabling environment for even the poorest of the poor in the country. Two-thirds of Indians, nearly 82 crore people are below 35 year of age. The time has come for the idea of right to entrepreneurship in India to really re-look its entire apparatus of the regulatory environment from the perspectives of the rights based approach to unleash the potentials of entrepreneurs of all sections of the society.

 

B.Chandrasekaran

Nation Builders' thoughts on Skilling Poor People

Photo Source : UNDP

Advancing civilization through the democratic form of governance system brings formidable social changes by the people, of the people and for the people to become more civilized in terms of achieving peace, progress and prosperity in the society. One of the key elements which play vital role to bring social changes in poor people’s life- quite drastically- is the skills acquired to do things which earn anything and everything that they want. In other words, skilling has become an important aspect of human capital building in the last decade. India has huge potential for becoming a world of human capital through skill building.

Towards the goal of achieving social changes mainly by skilling poor people has been a major thrust of many of our nation builders in India especially from Mohandas Karamchand Gandhi to Rajiv Gandhi, and others. Indeed, all of them had very strong perspective thoughts on skilling poor people that play greater differences in their life in society. An attempt has been made in this article to bring the thoughts of the two great sons of India whose visions are eternal in some ways at least in skilling people.

The conventional wisdom was that if anyone is able to understand, speak and write about something simple form in a language becomes literate in society. But the twenty-first century wisdom of literate or skilled human resource has become quite different as the world of science and technology has changed steadily. What is quite interesting is that the nation builders who had views on skilling poor people which are of the twenty-first century perspective.

The father of the nation, Mohandas Karamchand Gandhi had expressed number of times through his perspective writings about the importance of skilling poor people for highly productive works in employment. Gandhi said that “Literacy is not the end of education nor even the beginning. It is only one of the means whereby man and woman can be educated. Literacy in itself is no education. I would therefore begin the child’s education by teaching it a useful handicraft and enabling it to pro- duce from the moment it begins its training (1948).”

With regard to the skilling of villagers, Gandhi said, “Without the basic training the villagers are being starved for education (Harijan, 28-4-1946)”. He further said that we need to “develop such a high degree of skill that articles prepared by them should command a ready market outside. When our villages are fully developed there will be no dearth in them of men with a high degree of skill and artistic talent. There will be village poets, village artists, village architects, linguists and research workers (Harijan, 10-11-1946)”.

In fact, Gandhi’s thoughts on skilling people were universal and much beyond the improving of villages. He said that “A mason can build a village house, but it requires an engineer to plan and build a big building or a big dam. Much more talent, knowledge, application and research are required to improve the village implements than to build a bridge on the Ganga. When we are able to attract people of this type by our renunciation and methodical research, we will be able to make rapid far-reaching progress, not till then (Khadi Jagat, 25-7-1941)”.

Similarly, Rajiv Gandhi was one of early Indian politicians to talk about the fruits of India’s demographic dividend from the perspective of the twenty-first century. Indeed, he foresaw the imperatives of skilling poor and young people and institutionalizing the training system. Speaking in 1988, he said, "we are one of the world's oldest civilizations and one of the youngest nations. Our country's demographic profile has undergone a major revolution. Now, there is a preponderance of youth. This is a decisive factor in determining our nation's destiny."  He also quite vividly envisaged that “Training and education do not end when you leave college. It is a continuing process. You keep learning as you keep working.”

Currently India is striving for building up of mass manufacturing hubs in the country with the focus of establishing large infrastructure development to support economic activities of production and services. It is very much pertinent to remember what Rajiv Gandhi said two decades ago about skilling people for the revolution of information and communication technology.

He had said that “To get electronics really moving in India, we have to go down to the other end of the chain. We are mostly talking about manufacturing and selling. We have to go to the other end and produce enough people who will be able to deal with the equipment that you are about to produce, which means a turn-around in our education system. We need many more institutes such as the ITIs, but oriented and run in a much more professional manner, oriented towards more modern fields of technology. We need to really develop a mentality in our people of using modem methods.”

In fact, during the last ten years (2004-2014) the UPA government’s initiatives on skill development were actually to implement the Rajiv’s visions of modernizing the Industrial Training Institutes (ITIs) into a Centre’s of Excellences. There was 1,896 government ITIs in the country when the UPA took over in 2004-05. Two schemes (upgradation of 100 government ITIs through Domestic Funding and upgradation of 400 government ITIs with World Bank Funding) were implemented to upgrade the existing government ITIs into Centre’s of Excellences. Remaining 1,396 government ITIs were undertaken part of the scheme called Upgradation of 1,396 government ITIs into Public Private Partnership Mode for converting them into CoEs. All of them were achieved by 2014 with greater improvements in the skilling systems in the country.

References

1.      Collected Works of Mahatma Gandhi, Volume 80: Dec 28, 1940 - Aug 17, 1941

2.      Rajiv Gandhi’s Speech on “Electronics for Progress”,

http://www.inc.in/resources/speeches/336-Electronics-for-Progress

3.      Foundation Day Lecture by the President of India, Smt. Pratibha Devisingh Patil at the Rajiv Gandhi National Institute of Youth Development, Sriperumbudur, Tamil Nadu, 01-September-2007 http://pib.nic.in/newsite/PrintRelease.aspx

4.      Rajiv Gandhi’s Speech on Revamping the Educational System

http://www.inc.in/resources/speeches/345-Revamping-the-Educational-System

B.Chandrasekaran

Skill Development Initiatives in some of the Congress ruled States in India

 

Photo Source: Rajiv Yuva Kiranalu , GoAP

What drives the people to become transformative in life and productive in work is actually how far the competition, choices and efficiency systems functions in the country’s education and training sector. That matters a lot. During the last decade skilling and re-skilling people have been a major agenda for both Union and State governments. Many new initiatives were taken up to increase the skill building capacity realizing the fact that the window of demographic dividend otherwise would go unutilized. And perhaps, many felt that failing to use properly the demographic dividend would end up social and economic disasters. However, it is interesting to note that the Union government has opened up the policy reforms in the area of skilling and re-skilling and some of the State governments have really invented its wheel to reform the skilling and re-skilling through various innovative delivery mechanisms. Among others, involvement of both private sector and the technology has played a major role in the process of skilling and re-skilling of large number of persons in different communities.

One of the main agenda of all the State Governments have been improving the conditions of imparting skill development to those who dropout early from school education, existing workers in unorganized sector, the marginalized sections, etc. Besides, Union government’s schemes on skill development and training, some State Governments are implementing their own skill development schemes which are far more effective in some ways. Indeed, few State Governments have initiated institutional reforms in skilling people with structured institutional mechanisms. There is uniqueness in each of these State government’s skill development initiatives.

 In what follows are the brief analysis of the key new initiatives of skill development by some of the States wherein the Congress Party is or was in power till recently. Basically, the aim is to look at the key policy initiatives and the performances of the schemes implemented by the State governments. Four States have been identified for present analysis: Andhra Pradesh, Maharashtra, Kerala and Manipur.

Andhra Pradesh (Congress Party was in power till recently)- New Initiatives: established Skill Development Fund (SDF), created a Rajiv Education & Employment Mission (REEM) to act as umbrella platform for all the skill development efforts of major departments. Best performance: Rajiv Yuva Kiranalu (RYK) started in 2010-2011 to convert the non-literate, school dropout, unskilled and unemployed youth into productive workforce by building their skills and place them in appropriate jobs. Several focused sub-missions were also set up to target the persons for skilling and job placement. The major changes the scheme brought-out include institutional mechanism approach; IT based implementation system; bio-metric attendance system and post-placement support services. As on April 16, 2014, over 4.95 lakh persons have been trained and placed with jobs in private sector.

Maharashtra-New Initiatives: established Maharashtra Knowledge Corporation (MKC) in 2001 to create new paradigm in education and development through universalization and integration of Information Technology in teaching, learning and educational management processes in particular and socio-economic transformative processes in general. Recently the State has also set up the Maharashtra State Skill Development Society (MSDS) which will act as nodal agency for policy planning, execution and monitoring of skill development initiatives. Best performance: Through MKC, network of over 5000 Learning Centers with more than 40,000 computers with state-of-the-art hardware, software and internet connectivity created; over 8.5 million youth  were given state-of-the-art IT Literacy Training; direct student facilitation services to 3.6 million + University students through 5,977 colleges in 13 universities in 2 States were provided; more than 8.4 million youth have been given Online Admissions and Online Recruitment Services across the State ; over 25,000 youth got direct regular employment or self-employment opportunities at their own native places; and about one lakh youths received indirect job opportunities at their own native places.

Kerala- New Initiatives: established Kerala Skills Excellence Academy (KSEA) in 2012 as an apex organization for the skill development initiatives in the State. KSEA facilitates focused training for high-tech automation driven industries (pneumatics, hydraulics or factory automation etc.) through specialized Training Centres which will be set up under existing government Industrial Training Institutes. Construction sector has created maximum employments in the country in recent years. KSEA has also set up a Construction Academy with industry association to conduct training courses, provide accreditations and certification for construction personnel across the entire spectrum ranging from architects and civil engineers to masons, plumbers, etc. Kerala is perhaps the second in the country after Andhra Pradesh to establish sector specific focus to train construction sector workers in large numbers as they are mostly in informal in job nature and unskilled or semi-skilled at present.

Manipur-New Initiatives: established Manipur Skill Development Society (MSDS) in 2011 to impart skill training for youths of Manipur and convert them from unemployed to be employed with a job that earns at least Rs.8,000 to Rs.10,000 per month. MSDS facilitates job oriented skill training offered by reputed institutes/knowledge partners outside the Manipur (Guwahati, Kolkata, Noida, Delhi, Hyderabad, etc.). Thousands of persons have been trained and placed with a job in sectors like Aviation& Travel & Tourism, Ayurveda & Spa Therapy, Beauty Therapy, Hair & Body make up, ITES/BPO, Retail Management, Front Office Operation, Food & Beverage, Banking & Financial Insurance, etc.

All of the above initiatives are quite transformative in nature for varied people in their States. These new initiatives have played a vital role for millions of people to equip with relevant skills and enhance the chances of employability in the job market. We need similar or more pragmatic approach towards skilling or re-skilling of varied sections so as to improve their living standards.

 

B.Chandrasekaran

Education in India – the road ahead

Photo Source: Trak.in

The ‘directive principles of state policy’ of the Indian Constitution, formulated in 1950 stated that “All states shall endeavour to provide within 10 years of commencement of constitution free and compulsory education to children till they reach the age of 14 years.” All states therefore had the primary responsibility of improving literacy rate and elementary education, whereas the centre dealt mainly with higher education. In 1976, education became a concurrent subject i.e. a joint responsibility of state and centre.

The concept of a National System of Education implies that, up to a given level, all students, irrespective of caste, creed, location or sex, have access to education of a comparable quality. This has sought to be achieved by successive governments in India. In achieving this aim, the guiding forces are the National Policy on Education documents of 1968, and 1986 under the Prime Ministership of Indira Gandhi and Rajiv Gandhi, and most recently by the Right to Education Act which came into force in 2009.

 The 1968 policy was the first significant and major step in education in post-independence India. “It aimed to promote national progress, a sense of common citizenship and culture, and to strengthen national integration.” The emphasis was on the need to radically overhaul and reconstruct the education system, with a focus on quality improvement. Yet, it was noticed that there were problems with the policy at the level of implementation – with “problems of access, quality, quantity, utility and financial outlay.”

The 1986 policy sought to address the lacunae observed in the 1968 policy by focussing on education for women, for the marginalised sections, minorities, the differently abled and also adult education. The policy defined and recommended Universal Elementary Education (UEE) embodying the concepts of universal access, universal retention and universal attainment. In order to address the widening class distinctions, and social segregation, NPE also recommended Common School System, where "children from different social classes and groups come together under common public school and thus promote the emergence of an egalitarian and integrated society”.

In 1993, in a PIL ‘Unnikrishnan versus state of Andhra Pradesh’, the Supreme court of India ruled that, “Education is a fundamental right that follows from the Right to life in Article 21 of the Constitution”. However, there was no legislative follow up from this for many years, primarily due to a volatile political situation at home in the following few years. In 2002, the 86^th Constitutional Amendment of India added Article 21A stating that, “The state shall provide free and compulsory education to all children of the age 6 to 14 years in such as a way as the State may, by law, determine”. This led to the formulation of the Right to Education Act, which was passed by the UPA Government and became a law in 2009.

Today, the results of the Right to Education Act and allied education policies like Sarva Shiksha Abhiyan and the mid day meal scheme are there for all to see. More and more children are now going to school, literacy rates are rising. The provision of seats for the EWS category has ensured that students from the economically deprived sections are not deprived of the benefits of education. Yet, we notice that gaps do remain – not only at implementation level, but recent figures have also pointed out how dropout rates are increasing in the post ‘compulsory’ period, how the mid day meal scheme is being manipulated etc. The recent mid day meal tragedy in Bihar is just a case in point of problems with implementation.

Today, as we have a new generation of youngsters, the education system in this country needs a drastic overhaul. There have been a number of attempts to streamline and review the CBSE in keeping with the times, but it has also often been seen that students scoring impossibly high marks in the CBSE often have no real grounding in the concepts. Students with nearly 100 marks in English often cannot string together a paragraph of correct English. Education in India needs to focus less on rote learning, and ‘keywords’ and more on concepts and processes. Similarly, the higher education system too needs an overhaul. The recent shift by Delhi University to a Four Year Undergraduate Program has been controversial. This new system, along with the move to a semester based system, rather than an annual system does have its benefits, which however, have become eclipsed due to an apparent lack of proper planning. For instance, how useful would a basic Foundation course in English be for a student already pursuing an Honours degree in the subject? Or a course in Maths for someone who has had no contact with the subject since Class VIII? The focus in India needs to shift to the higher education system – radical changes are the need of the hour, but these need to be well thought out and then implemented. Education needs to be equitable. Students need to feel that they are gaining something from the system that will empower them in the future. More skill development and vocational courses, employment generation opportunities need to be provided by the education system. A number of these ideas have been articulated in the 12^th Plan for Education, but it is upto the people of this country, especially the youth, to ensure that implementation does not fail. These are the challenges and opportunities facing Indian education today. 

 

Madhumita Chakraborty

 

Towards a Socially Grounded Policy Framework: Bridging Everyday Reality and State

Photo Source: Livemint

This is a perspective on the interface between rural labour markets and village based dalit women in eastern Uttar Pradesh (UP). These insights, drawn from fieldwork conducted in three villages of eastern Uttar Pradesh in the late 2000s, can serve as a basis for designing suitable policy interventions.

A stark feature of the rural labour market is the gender and caste segmentation. Barring isolated exceptions, dalits are concentrated at the bottom of the rural labour hierarchy-in agriculture, brick kilns, construction and distress driven petty self-employment and migrant work. Dalit men reflect high occupational diversification away from agriculture. Accordingly, their income sources and employment relations have been significantly delinked from the village. However, dalit women continue to be held captive in the village economy and society for a variety of reasons-responsibilities of own cultivation, domestic and care economy; a patriarchal value system; increasing role in everyday household reproduction in the face of male outmigration; delivering unfree labour to the local elites on whom they are dependent for employment, credit etc. Moreover, the village economy is largely agrarian in which the least paid and most demeaning types of work are done by women. Therefore, dalit women left behind in the villages are directly and to a greater extent than their male relatives embedded in village based social, economic and political relations of domination and subjugation which are underscored by intersecting caste, class and gender identities.

However, piece-meal transformations are unfolding in villages. In the case of UP, the regional context of BSP has been an enabling factor as it has at least posed a challenge to the traditional purity-pollution discourse, in removing the terror of police from the minds of dalits and ensuring them hearing at the police station, extending scholarships to students etc. Unfortunately however, BSP’s politics of dignity has not managed to structurally combat dalit women’s acceptance of their inferior status, their lack of confidence, their marginalisation from economic and political freedoms enjoyed by dalit men etc. Nonetheless, dalit women are gradually collectivising and protesting against their social and economic exploitation. This is evident in their struggles for better wage relations, in securing PDS ration, in filing complaints against corruption etc. But these struggles do not pose a systemic challenge but seek concessions within the existing order.    

What type of policy insights does such a scenario provide?

One clear lesson is that agriculture continues to be the daily mainstay of dalit women. As such, there is an urgent need to reorient growth strategy such that it does not bypass agriculture and develops synergetic linkages with other sectors to enable greater labour absorption in productive employment opportunities. Policy response can no longer casually treat the gender dimension of differentiation and exploitation and the structural inequalities which are ruthlessly exploited in pursuit of accumulation. Moreover, the idea of hitherto rural/agrarian labour needs to be reconceptualised considering it is simultaneously involved in varied employment relations across geographically dispersed production sites.     

Government interventions such as NREGA and widow/old pension scheme have had positive spin-offs, acting as a crucial buffer against absolute poverty and destitution, but these have also been used as tools by the local elite to build vote banks, labour lobbies or to secure unfree labour. In this region, NREGA has failed to counter the gendered division of labour. Even the petty pension amount is not disbursed regularly without grease money which leaves a very vulnerable section at the mercy of their families for food, health expenses and shreds their dignity. Petty corruption has emerged as a major source of income and accumulation by the local elite. On this front, the Lokpal Bill is definitely a good beginning but again much depends on the implementation and social efforts to enable the use of this legislation.              

The present policy emphasis on promotion of self-employment opportunities and skilling does not seem to have had desired outcomes. The few women who had acquired tailoring skills (seemingly the only skill women learnt), operated out of their houses and had a smaller customer base. Since social relations overshadowed economic transactions in such a setting, these women received less than the market rate and often received delayed payment. In addition to the conceptual and practical social barriers women faced in setting up as micro-entrepreneurs, the demand for products coming from dalit households was also comparatively low. Skill training should involve education about doing business and developing backward and forward linkages. For a variety of reasons, skills are not as strongly related to employability in the case of dalit women. In general though, it is the case that despite significant government interventions in the area of skills and entrepreneurial development, wage employment and not self-employment is perceived as more important for household survival. This is also because of overhead costs associated with self-employment, irregular and fluctuating income flow etc.   

Any policy design on poverty has to contend with the fact that the poor are not a homogenous group. They are embedded in multiple affiliations, are subject to different compulsions and likely to be a polarised and contentious group. State initiatives for poverty reduction are cornered by the relatively better-off or those poor who are ‘tied’ or ‘loyal’ to the local elite. Rather than poverty alleviation and asset creation, a vicious cycle of dependency underlies attempts by the poor to access scarce resources and benefits. Moreover, poverty is dynamic-economic and social shocks, occurring in quick succession, can force even relatively better-off households into a worse-off position. The fieldwork clearly points to a multi-dimensional understanding of poverty.

A final point for consideration-if there are obvious limits to dalit politics i.e. the subversion of authentic and effective politics of representation for narrow sectarian gains, then are there alternate legitimate political and social institutions or movements to ensure the inclusion and empowerment of dalit women and other marginalised Indians who have been unjustly and deliberately rendered mute.

 

Ishita Mehrotra 

 

Skilling India’s Youth for Better Employability: Policy Evaluation

Students being trained at ITI Gurgaon; Source: www.livemint.com

During past nine years, the idea of skilling youth has attracted attentions both nationally and internationally and there has been a continuous large scale ongoing debate on this issue even in India along with transformation. The major driving force behind such transformation is actually rooted to the persistent rise of economic aspirations of different sections of the society, especially amongst its growing youths, who are seriously exposed to the challenges unemployment and opportunities. The untiring strive for collective efforts to improve the systemic delivery of services in skill training is rather very impressive.

As per Census 2011, India has 583 million of youth population aged between 10-35 years, out of which 398 million (68%) are in rural areas. About 68% of India’s population is below the age of 35 years, increased from 60% in 2001. The dropout rate for Classes I-X in school education is about 60% in 2007-08. The dropout rates for SC and ST students are even higher at 68% and 78% respectively. As per NSS data, in the age group of 15-29 years, the proportion of persons received formal and informal vocational training is very negligible at 2% and 8% respectively. There is also a huge mismatch between skills trained and needs of the market. In fact, the issues of employability become a major concern implying that the youth lacks not just generic skills but huge technical skills which market demands. This shows that our youth are in big trouble, who are neither in school nor in training institutions for skilling. This is a big threat to the much cherished window of demographic dividend. The United Progressive Government (UPA) has taken several meaningful policy measures to arrest this trend and improve the employability of youth.

 

There has been a paradigm shift since 11^th Five Year Plan with regard to the public policies on skill development in India. An inclusive framework was devised involving subject experts, industries, civil society and international community through the Coordinated Action on Skill Development, which was created with a three tier institutional structure in 2008, including (i) Prime Minister’s National Council on Skill Development (PMNCSD) for overall policy directions, (ii) National Skill Development Coordination Board (NSDCB) under the Planning Commission for policy coordination among different stakeholders, and the (iii) National Skill Development Corporation under the Ministry of Finance in public private partnership mode to foster and catalyze the efforts of private sector involvements in skilling the youth in India.

Subsequently, the Government of India also announced the National Policy on Skill Development in 2009 with an objective to provide skill training to 500 million persons by the year 2022 when India become 75 year after Independence. This policy is the guiding document for the country as a whole and provides a very comprehensive set of innovative and radical policy measures for addressing the major challenges faced by the skill training sector in India. Besides, several measures for systemic and structural reforms, the Policy promotes greater Choice for trainees and Competition among training institutions with transparency and accountability. It also paves practical ways for skilling informal sector workers who constitute more than 94% of workforce.

Thus, both the Coordinated Action on Skill Development and the 2009 Policy played vital role for several innovative skill training schemes/programmes in the last 7-8 years initiated by both Central Ministries/Departments and State/UT governments. In fact, almost all the State/UT governments have established the State Skill Development Missions of their own with inclusive framework in order to bring necessary structural changes for improving employability of youth.

There are two major players in skilling the youth which are NSDC and Ministry of Labour & Employment. Till November 2013, the NSDC has partnered with 2,202 training institutes including mobile training centres and trained about 9.91 lakh persons, out of which they have placed 6 lakh persons (60.5%) since 2009. The Ministry of Labour through its Skill Development Initiative (SDI) Scheme based on Modular Employable Skills (MES) trained about 16 lakh persons since 2007-08.

However, in order to address the skilling issues to a greater extent by bringing systemic and structural reforms, the UPA government has set up a dedicated permanent institutional structure, namely the National Skill Development Agency (NSDA) under the Ministry of Finance by subsuming the PMNCSD and NSDCB in 2013. The NSDA is an autonomous body and aims to coordinate and harmonize the skill development efforts of the Central and State Governments and the private sector to achieve the targets of skilling youth. Moreover, the NSDA has mandate to bridge the social, regional, gender and economic divide in skilling youth through ensuring the skilling needs of the disadvantaged and marginalized groups like SCs, STs, OBCs, minorities, women and differently-abled persons. The NSDA has also been asked to take affirmative action as part of advocacy by the NSDA. The quality of training is something which the NSDA should address holistically by partnering with industry and civil society and by ensuring both supply and demand sides of the skilling youth. Such measures hopefully can help in addressing the challenges of skilling youth in India with better employability and future.
 

B.Chandrasekaran

 

UPA’s Policy Reforms in Skill Development



Photo Credit: National Skill Development Corporation (NSDC)

In the recent years the significant acceleration of economic growth rate in India has lifted quite sharply upward the demand for higher level of skilled manpower. According to B.B. Bhattacharya’s study (2008), a disaggregated analysis shows that higher education in general and skill formation in particular has given India a competitive edge in services sector’s growth.

The study also revealed that with growing demand for highly skilled work force in both India and abroad the supply of highly skilled work force in India is now failing to keep pace with demand. As a result there is a danger of India losing its international competitiveness in skill induced economic growth.

Keeping in perspective, the United Progressive Alliance (UPA) government initiated many policy reform processes particularly in the area of vocational training and skill development sector through Ministry of Labour & Employment. Policy reforms were introduced for expansion and modernisation of the existing vocational training institutions by partnering with industry and civil society organisations through the Public Private Partnership (PPP) mode. The government has also been implementing a number of innovative skill training programmes which have coherently created afresh vocational training facilities in the country. During 2008-09, government launched a broad based Skilling Mission for training of 500 million persons by 2022. Various Central Ministries/Departments/Organisations have been given specific targets which have been rigorously followed up through several initiatives based on the National Policy on Skill Development, 2009.

 

All the 1,896 government ITIs (January 1^st, 2007) were taken up for upgrading into Centres of Excellence. First, the upgradation of 500 ITIs was announced in the Budget 2004-05. Out of 500 ITIs, 100 ITIs were taken up from Domestic Funding and 400 ITIs were taken up through the World Bank funding. Upgradation of remaining 1,396 government ITIs was started in 2007-08 through Public Private Partnership mode. The PPP mode has been implemented in the form of Institute Management Committees (IMCs) to ensure greater and active involvement of industry in all aspects of training. There are significant improvements in the modernised ITIs both in terms of percentage of trainees pass outs and finding jobs within a year.

The other major initiative was the Skill Development Initiative (SDI) Scheme based on Modular Employable Skills (MES) launched in 2007 to provide vocational training for early school leavers and existing workers, especially in the unorganised sector to improve their employability. The scheme facilitates afresh skill training through MES as per demand of markets. It also provides scope for directly testing and certification of skills acquired informally through Empanelled Assessment Bodies. More than 7,125 Vocational Training Providers are imparting skill training under the Scheme with 1,400 short term modules covering 60 sectors. So far, more than 1.6 million persons have been trained/tested since inception of the scheme.

The National Skill Development Corporation, set up in 2009 in PPP mode have mandate of training about 150 million people or 30% of 500 million by 2022, has partnered with 2,202 skill training institute/centres across the country and trained about one million persons and placed 6 lakh persons (61%) in the job market.

 

According to the Planning Commission, as on January 1^st, 2007, there were 5,114 ITIs/ITCs in the country with a seating capacity of 7.42 lakh. As on April 1^st, 2010, there were 8,039 ITIs/ITCs with a seating capacity of 11.15 lakh in the country. Thus, the last three years (2007-08 to 2009-10) had seen an increase of 2,925 ITIs/ITCs, which is 57% of the number of institutions set up in the first 60 years of Independence! By December 11, 2013, there were 10,750 ITIs/ITCs with seating capacity of 15.23 lakh in the country.

 

There are several other institutional reform initiatives for bridging the mismatch of skilled persons and the markets needs through Labour Market Information Systems, National Skills Qualification Framework, Sector Skill Councils, National Occupation Standards, Accreditation of Institutions and Quality Assurance, Assessment and Testing Bodies, etc. All are underway in massive efforts!

 

-B.Chandrasekaran

 

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Bridging the Skill Gaps: Role of Education and On-the- Job Training

Photo credit: NSDC

Are “greater investment in education and training a prerequisite for employability, or can skills be built through jobs?” This question has become quite pertinent in the context of the job market where available skills are not fitting in well with the demands of the economy. The possible approaches to tackle this challenge are explored in the World Development Report, 2013. 
                                                                              

Skill mismatches are arguably growing rather than shrinking. Today, more than one-tenth of 15 to 24 year olds worldwide are functionally illiterate. Without numeracy and literacy skills, the prospects of improving employment opportunities and earnings, whether in agriculture or in urban settings, are thin.

Employment opportunities are seen to increase the demand for education, which systems then have to meet. Often privilege in access to jobs distorts the signals. It hurts and discourages, rather than encourages, the building of skills. Thus policy interventions should focus on ensuring that signals are adequately transmitted and incentives are provided to continue skill accumulation by the young and those of working age alike. In India, informing rural women about job opportunities led to increased schooling for girls and delayed marriage and childbearing for women. 

The report points out that though the straightforward response to skill mismatches would be for private firms or individuals to upgrade skills through further education or training—but several factors act as constraints like the market constraints. For example, lack of information about employment opportunities, transportation costs, or housing market failures may be the real reasons why workers do not take available jobs. Small firms and farms seldom have the necessary funds for training and education.

Institutional failures often end up replacing market failures. But many countries are trying to create oversight entities, to separate quality control and management of providers from financing. In India, the National Skills Development Strategy is based on the principle that the institutions in charge of training, certification, and accreditation should be strictly separated. On the negative side, scattered responsibilities across many Central Ministries, distance from the private sector and slow response to rapidly changing skill needs are some of the problems which continue to plague such systems.

The report emphasises that just as skills are important for jobs, the reverse is true as well. Many technical and social skills can be built through experience in the workplace. Apprenticeship programs, fostering the integration of education and learning through jobs, exist in various shapes around the world. The report suggests that informal apprenticeship can be strengthened through its gradual integration into national training systems. In France, Germany, and the Netherlands has a dual system credited with fast and structured employment integration. “But the dual system requires more than the right economic incentives—it is based on a social contract between employers, trade unions, and government.” Private sector commitment, including financing of training and continuation even in times of economic downturns, is fundamental. 

On-the-job training is consistently found to go hand-in-hand with higher labour earnings and productivity increases, even more so in developing than in industrial countries. But only a fraction of workers have access to it; those with less education and those working in smaller and informal enterprises seldom have the opportunity to benefit from training. Inequitable access and poor quality are key constraints in many countries and the reach of Technical and vocational education in rural areas is often very limited. 

In countries like Korea, industrial projections of manpower supply have taken a backseat to the country’s new initiatives emphasizing quality and relevance of education and skills development. The Korea University of Technology and Education (KUT) established the Bridge Model, a three-way partnership involving a single major enterprise and clusters of small and medium enterprises (SMEs) that serve as its main subcontractors. The major enterprise contributes technical knowledge, the SMEs bring in the employees to be trained, and the University supplies the teaching facilities and content.

Today the focus is gradually shifting from merely ensuring an adequate supply of skills to delivering demand-responsive, quality- skills development programs.