Education & Employability

If things progress as they are, India is certain to face a ‘talent gap’- the lack of right skills for the job required – of more than 5 million by 2012, as existing educational institutions do not impart employable skills. If training has to deliver job-level skills in an increasingly globalised world, strong industry leadership and engagement with skills training, qualification and assessment framework is essential. A Team Inclusion analysis.


If things progress as they are, India is certain to face a ‘talent gap’- the lack of right skills for the job required – of more than 5 million by 2012, as existing educational institutions do not impart employable skills. If training has to deliver job-level skills in an increasingly globalised world, strong industry leadership and engagement with skills training, qualification and assessment framework is essential. A Team Inclusion analysis.

India has a huge brand name internationally in supplying skilled manpower. According to one estimate, at any point of time, around five million Indians work abroad. With its demographic advantage and the large pool of English speaking people, India can well provide the solution to the world’s skills shortage problem.  But, what is needed is a holistic approach to address the problem of skills shortage within the country.

At another level, if India is to attain its goal of becoming a global economic power, it needs people of calibre to power and accelerate growth, be it in manufacturing, services or even agriculture now. Development is dependent on proper infrastructure like power, roads, irrigation, etc., and on social upliftment in terms of health, sanitation, and so on. And for all this India needs qualified people. Even doctors are scarce, says a recent Planning Commission report. India needs 600,000 doctors, 1 million nurses and 200,000 dental surgeons. Health ministry estimates that India needs 2.1 million nurses if there has to be one nurse for a population of 500. But only 1.1 million are available.

A recent report published by the Confederation of Indian Industry (CII) and the Boston Consulting Group (BCG) has estimated that India would face ‘talent gap’- the lack of right skills for the job required – of more than 5 million by 2012, as existing educational institutions do not impart employable skills. The report titled, ‘India’s Demographic Dilemma’ brings out the fact the $1.1-trillion economy will have a shortfall of 750,000 skilled workers over the next five years. On the other side, there will be a surplus of 1.3 million unskilled and unqualified school dropouts and illiterates. Though a large part of the report was written before the current financial crisis started affecting India’s growth rate, the numbers still look worrying. Post the financial crisis, new concerns have emerged.

As Bhaskar Chatterjee, Principal Adviser, Planning Commission, says, “unemployment among educated youth may be caused by a variety of factors. It might be that the economic – more specifically the job market – conditions are such that enough jobs are not created to absorb all the educated manpower. This may happen under recession, slow-down or even under job-less growth.”

Alternatively, the number of educated unemployed may rise due to a mismatch between knowledge and skills that are imparted by the educational institutions on the one hand and what is required by industry on the other. “It is this second situation that puts the blame squarely on the education sector and that is, in fact, the phase through which we are passing in contemporary times. We are saddled with a situation where industry is lamenting skill shortage and at the same time we have educated youth complaining of non-availability of jobs,” he adds (see also box: Unemployablity of the Employable).

Admittedly, in one sense, the year gone by was a watershed year in the area of skills development initiatives as it has been recognised that bridging the skills gap is essential if India is to maintain the current pace of growth.

The National Skill Development Policy, approved by the Cabinet, under the National Skills Development Mission aims at empowering all individuals through improved skills, knowledge and internationally recognised qualifications to enable them access to decent employment and to promote inclusive national growth.

Apart from upgrading the existing government ITIs, the government has also launched the Skill Development Initiative Scheme to train one million people in the next five years and then one million every year. Training will be provided in demand-driven, short-term courses, based on modular employable skills and the cost will be borne by the Central Government.

Giving an overview of the latest policy initiatives, Sudha Pillai, Secretary, Labour & Employment, says the government is committed to creating quality employment and equipping the labour force with relevant skills in an age of intensified competition and technological diffusion. Towards this end, two major schemes totaling US$1,340 million have been launched for upgradation of all Industrial Training Institutes (ITIs) in the country, of which 500 ITIs are being upgraded into Centres of Excellence.

However, the issue of aligning skills with jobs has been a recurring one for quite a while. There are clearly still many concerns and challenges. Many of the people we spoke to had definite and valuable perspectives on the way forward, but a holistic approach is absent; one that synthesises the many strands that our education system has developed into over the years.


India has one the largest education systems in the world, but there is an urgent need to modernise it. We need more institutions in diverse fields like agriculture, biotechnology, and human resources, among others, if we have to reap the advantages of our demographic profile.

In a country like India, it is also important to ensure equitable distribution and access to skill development opportunities. Says Pillai, “the employment exchanges are going to be drastically altered during 2009 and are going to be converted into web-based employment portals.” The state governments run them but the Central Government has now got in the mission mode, a programme under the National e-Governance Plan (NeGP) where all the 1,000 odd employment exchanges will be so altered that you can actually give vocational counseling and guidance to make sure that people are employed, she adds.

The Planning Commission has also sanctioned the setting up of 5,000 Skills Development Centres under the Skill Development Initiative. In a move to widen outreach, the Initiative does not require Class 8 pass; it has brought the educational qualification down to Class 5. Non-governmental organisations (NGOs), which are engaged in non-formal education, can utilise this opportunity to skill their pupils after Class 5. For any training, one should have the ability to read a little. Hence, NGO programmes, will ensure that the children are literate and numerate.

MC Pant, Chairman, National Institute of Open Schooling (NIOS), says “when we talk of education and employability it is not enough to address the challenges of the formal system which compels everybody to go to the school and study a structured curriculum that is not suited to their requirement.”

Upon being asked for a solution, Pant asserts: “We need flexible systems, modular approach and small units of competency-based courses. In the open schooling system, we are trying to provide modular courses where we have multiple entries, multiple exits, and facilities for-on-the job training. The institutions have to develop the courses as per the requirements of the employers, the competencies have to be mapped, evaluation systems have to respond to the requirements of the assessment of competencies which have been acquired by the learner and not simply knowledge domain. These are the challenges before us.”

In order to meet the burgeoning requirements of skilled and unskilled labour, a massive increase in quantity of training is needed. As suggested by the National Knowledge Commission, the government can explore new delivery models to increase capacity such as public private partnerships, decentralised delivery, distance learning and computerised vocational training. At the same time, the government must introduce certain minimum standards as a measure of quality and ensure that these are adhered to by all public and private Vocational Education and Training (VET) institutions (see also box: Towards a Knowledge Society).


India has 350 universities, 18,000 colleges and 6,000 ITIs, which every year come out with about 500,000 technical graduates, of which, according to NASSCOM estimates, 75 per cent are not easily employable, and 2.3 million graduates, of which 90 per cent are considered unemployable. These are statistics which can vary from panel to panel but they are essentially true. Sam Pitroda, Chairman of the National Knowledge Commission says that of the 90,000 odd MBAs that are produced each year, only a miniscule percentage are found to be worth employing.

Most of the college graduates remain unemployable because of lack of job oriented training. If training has to deliver job-level skills in an increasingly globalised world, strong industry leadership and engagement with skills training, qualification and assessment framework is essential.

Agreeing that there was need to build bridges between industry, education and skill providers. Vijay Thadani, Chairman, Chief Executive Officer, NIIT Ltd, points out that there is also need to build soft skills as demanded by the new evolving global culture. Importantly, he advocates “synchronisation between knowledge and application”.

These soft skills according to MM Pant, Former Pro Vice-Chancellor, IGNOU, are communication skills, good team working skills, information seeking skills and logical skills. All these skills are not taught at university. “So, we need to distil skills for employability and put them on top of the agenda for inclusion in the curriculum.”

Focusing on the twin imperatives of quality and competitiveness, Ravi Pillai, Country Head, City & Guilds (South Asia), pointed out that funding is no longer a constraint given the increased commitment levels of the government, but the institutional structure to deliver quality of output has still to come alive.

Across the globe, industry skills councils work actively to address the skill gaps, provide training and enhance employability. A sector-specific approach was imperative to determine curricula and training outcomes. Putting in place an institutional arrangement for training, certification and placement is critical to meeting industry requirements and improving the nation’s productivity levels. It is learnt that testing at the new Skills Development Centres will be done by mostly industry-oriented testing entities and it is likely to be quite rigorous.

Navin Bhatia, COO, Bharti Airtel, says the future requires close cooperation with and among industry players to define a ‘look, see and feel’ curricula, create assessment guidelines and partner ITIs. 

Planning for the VET sector should specially take into account the needs of emerging sectors like retail, automotive, IT, construction, and financial services. These sectors have no fixed training courses currently and a new beginning allows for evolving sustainable solutions.

Setting up special auto training institutes and development of special training modules catering to the needs of the auto industry is already on the cards. The auto industry has indicated its willingness to adopt 100 ITIs. In the construction sector, it is essential that a seamless supply chain of placement, retention and career progression is set in place if the country’s infrastructure needs are to be met. For the financial services sector, training assessment can be conducted in different languages so as to widen outreach and incorporate the rural population into banking and financial services. Investment in healthcare, which would include not infrastructure but development of human resources, could be incentivised.

The role of ICTs in education is well recognised the world over. If we look at it from the perspective of employability, then as Rajan Anandan, Managing Director, Microsoft Corporation (India) says “we need a second information revolution.”

The first information revolution in India was about the successful export of IT services where we leveraged low-cost developer resources. There are over 1.5 million software developers in India today, which has now become the largest developer community in the world.

The second revolution is about where we need to learn how to use IT to power job creation, to leverage IT to accelerate education where we can actually educate 500 million plus youngsters below the age of 20 and the remaining 500 million, many of whom who actually need further enhancement of professional capabilities.  “This revolution will require several paradigm shifts.  It will require IT companies to innovate for India instead of simply innovating from India,” explains Anandan.

There is another perspective which holds that quality should be looked at from the primary school level itself. Non-governmental organisation Pratham publishes an annual report on the state of education, and the most recent one shows unacceptably low learning outcomes in the country. The public schooling system is shown to be grossly deficient, with students unable to read, write or solve arithmetic problems prescribed for far lower grades. Consider this: 44 per cent in Class 5 cannot read Class 2 text or 42 per cent in Class 7 cannot divide!


There is a shortage of capacity in the Indian education system. India today needs at least 1,500 universities, but has only 370. There are more than 550 million young people in need of education but do not have educational institutes to go to. India also needs around 1,500 IITs, 1,500 management institutes, and 1,500 medical schools. A million good schools are also required.

But, due to tight regulation by the government, private sector entry into the education sector has been stifled. Equally valid is the opinion that the country’s education system needs greater autonomy along with more inclusive private sector participation. Educationists ask, for instance, why should there be a single monopoly body in the sector granting deemed status to universities (see also box: State of Higher Education).

Sharda Prasad, Director-General Employment & Training, Government of India, says an institutional structure at the state level has already been suggested in the National Skill Development Policy. To achieve the objectives of developing skills, raising productivity and income levels, the states have to be on board, he said. Therefore, State Skill Development Councils headed by the Chief Minister and State Skill Development Corporations to serve as funding mechanisms have been envisaged.

The Government has made large allocations but this funding should be viewed as a catalyser, to jumpstart the programme, suggested Prasad.

Capacity also needs to be upgraded in terms of human resources. In other words, we need to also train more teachers, re-skill them according to today’s requirements. Young people should be motivated to train as educationists and trainers. This will partly solve the unemployment problem and add to the system a large number of people who can then transfer those skills to students There is a need for faculty enablement, faculty development and faculty recruitment. There is a need for blended training which is part ICT-enabled training and part faculty-driven. Clearly, the list of things to do is not small.

Some More Strategies

The theme of the 11th Five-Year Plan is inclusive growth and it not merely the backward areas and regions that are economically and social deprived and also people who are economically and socially backward. The biggest initiative being taken is in the area of education. A huge amount of money is being spent all over the country, not merely in the IITs and IIMs, but also in primary and secondary education and expanding the scope in the area of vocational education.

“Work-oriented education should begin right from pre-primary education and go up to high school where along with general education the children are taught the dignity of work,” says Subhash C Kunthia, Joint Secretary, Ministry of Human Resource Development. “We are in the process of reformulating this higher secondary vocational stream with an element of general education so that children will have more choices if the want to go for higher education.”

Subas Pani, Secretary, Planning Commission, points out that one of the critical shifts in philosophical approaches is that in the first meeting of the National Skill Development Mission, it was recognised that skill is not an end in itself. “So, it is essentially an employment mission.”

“We must try and rework the training programme in such a manner that it is both demand and supply driven. Skilling is required to leverage employment and to give empowerment to those who get skilled for a sustainable living,” he adds.

The problem and therefore the solution to the entire issue of unemployability vs. employability rests on one word, matching.

What does ‘matching’ mean? First, look at each vertical sector of the Indian industry and assess the numbers at each level in terms of manpower requirements. This kind of knowledge exists all over the place, in many studies. The second step is to create courses which answer the needs of the skill requirements. There are lots of courses but they do not exactly match the skill requirements and, therefore, the assessment which may lead to a certification the industry will find of use and accept. The third step is to find skilled teachers. One way is to retrain the existing faculty so that they are able to impart the needed skills to the students. The roadmap should incorporate the following:

  • Initiate a comprehensive change process driven by innovative approaches for skill development, in terms of outreach, flexibility, labour market relevance and transparency. In addition, we need to:
  • Implement policy direction and utilise allocations effectively so as to build a skill infrastructure.
  • Channel investments and global partnerships for skill development to sector-specific needs and opportunities.
  • Strategically align vocational training to higher education providers and also allow coherent, seamless transfer between various education sectors.
  • Undertake reforms in both the supply and demand side of the training sector.
  • Identify specific issues related to delivery and administration of skills, and then dovetail the same in a revamped education system.

Skills development is major initiative that tries to reach out to those people who need the most. All they need is to get some skills so that they stand on their own feet. They are willing to work and improve their life through their own efforts, but they need that little help of giving them some skills with which they can carve their own destiny. Let us all note it is not just about creating 10 million jobs within the country but it is actually skilling 47 million people to work not only in India but also abroad

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