Need for large scale Skill development: The following are some of the key issues highlighting the

need for large scale Skill Development initiatives in the workforce. The huge number of people added to the workforce each year and their low preparedness to avail the emerging employment opportunities make the issue of skill development self evident. The magnitude of the challenge is further evident from the fact that about 12 million persons are expected to join the workforce every year. Bulk of the workforce addition is at the workmen level and the ITIs (both private and public) are able to handle about 7 lakh people only. Analysis of the statistics taken from India Labour Report,2007: Demand/Supply mismatch:90% of employment opportunities require vocational skills but 90% of Indias college/school output has bookish knowledge(India Labour report 2007). 89.7% of the Indias jobs (India Labour Report,2007) are skill based and hence requires one or the other kind of skills development /training for a major chunk of it.
Distribution Of 'Skill-based' versus 'Knowledge-based' occupations

9%

81%

Considering the 15-60 age group, the working population age group from the NSS 61st Round Employment Data shows that almost 40% of the population is not literate (heavy concentration at the bottom of the pyramid).Immediate fallout of

Predominantly Knowledge Based

Predominantly Skill Based

the accumulation at the bottom of the pyramid is the low skill levels among the working population. These can be measured using two indicators: i) Incidence technical education: Considering the working population age group from NSS 61st Round on Employment and Unemployment, one could see that 97% of the labour force (age group 15-60 years),has no technical education. Of all the 15-60 year olds, a meager 0.3% has a technical degree. See figure given below.

Distribution Of W orking Ag

1%
(Source: Indicus Estimates based on NSSO 61st Round 2004-05.All individuals in the working age group 15-60 years) ii)

0%

Incidence of Vocational training among individuals: 2%

A vocational training has been broadly defined as a training which prepares an individual for a specific vocation or occupation. It aims at imparting training to persons in very specific fields through providing significant hands-on experience in acquiring necessary skills in specific vocation or trade, which makes them employable or create for them opportunities of self employment. The bleak performance on this front is highlighted by the fact that hardly 7% of the population in the 15-29 age

group receives any vocational training, with a whopping 93% with no access to any kind of formal/informal vocational training. Even more glaring is the breakup of this 7%.This 7% consists of only 2% receiving a formal vocational training, 1% still receiving and the majority (4%) with non-formal training. Hence, in a country like India, where labour power (especially unskilled) is abundant, there lies a huge scope for tapping this available resource.

Incidence O Vocatio f

While comparing the unemployment rates across education level for individuals who have received any form of vocational training against those who have not. Consistently, across all educational levels, the group that has received vocational training registers lower unemployment rates. As a corollary, individuals with vocational training are less likely to be unemployed as the skills imparted during the course of such training enhance the employability.

93

Unemployment Rates (Usual Status) among 15-20 year age group across training status:
Unemployment Rates(Usual Status) 15-20 year age group No Vocational Training Vocational Training % Point Difference

Education Level

Not literate Literate-below primary Primary Middle Secondary Higher Secondary Diploma/Certificate Course
Total

3% 5% 7% 10% 20% 31% 44% 9%

1% 5% 3% 5% 9% 25% 40% 7%

2% 0% 4% 4% 11% 5% 3% 2%

(Source: NSSO 61st Round, 2004-05) Note: Hence, imparting the vocational skills through various training centers could prove to be a beneficial deal for both the trainees (as they are more employable thereafter) and the private firms that have set-up their own training centers. Hence, if a private organization/corporation had to invest into this highly potential sector of training and skill development with maximum opportunity to derive profit, it should start with the voluntary training centers (than anything else) as there lies the maximum gap (shortage) in the demand-supply chain and also has got a huge number of available resources(who themselves would be interested to join the bandwagon as these training does seem to tangibly enhance their employability as discussed above) to tap into, so as to achieve profitability in the long run through leveraging of this high number of potential willing customers. Training for the employed and unemployed Youth: Of the 287 million individuals in the 15-29age group 145 million are in the labour force and almost 11 million are unemployed by the usual principal activity status.

Numbers in the Current Youth cohort that need to be trained (15-29 age group) in Millions
Employed Requiring Training(in Mn) 4.1 16.4 24.9 26.2 71.4 Total Training Require ment(in Mn) 5.3 21.9 55.4 82.5

Un-employability Type Last Mile Interventional Structural Total

Training Requirement Per Individual <=0.5 years 0.5-1.0 years 1.0-1.5 years 1.5-2.0 years

Unemployed Requiring Training(in Mn) 1.2 5.5 4.3 11

(Source: Indicus Estimates based on NSSO 61st Round, 2004-05). From the table we find that even the employed workforce is in acute need of training to hone its skills. The maximum chunk of them belonging to the un-employability type, Structural i.e. employees who are holding secondary, higher secondary or diploma qualifications and require a 12-24months training program (like ones in ITIs). Distribution of Individuals requiring training across educational levels:

Education Level Completed Not Literate Literate without formal schooling and others Literate-below primary Primary Middle Secondary Higher Secondary Diploma/Certificate Course Graduate Postgraduate and above Total

Percent Individuals (of those requiring training) 21.6 2.0 8.4 15.5 21.1 11.5 7.1 3.3 7.3 2.2 100.0

(Source: Indicus Estimates based on NSSO 61st Round, 2004-05).

The table here shows the percentage distribution of individuals who require training in terms of their highest education level. It is quite evident from the data table, that the maximum number of people with training requirements (formal/informal vocational training) belongs to the two education categories: Illiterate and Middle School Passouts. Hence the private firms that plan to invest in training and skill development ventures need to take notice of these two groups in particular. They could probably come out with various channels to rope in people from these categories and could also think of ways to lure them into these training programs like discounted services etc.