India can be the world's skill hub: HRD Minister

All sectors of economy need to perform to absorb people in workforce, adds Chanda Kochhar

India has the potential to become the worldwide hub for sourcing skilled labour, apart from meeting the country’s demand, said Union Minister for Human Resources Development (HRD) Dr M M Pallam Raju.

Speaking at the Confederation of Indian Industry (CII)’s human resource summit, Raju said that the greatest challenge for the nation is to make its large workforce more employable. He pointed out that of the 4 lakh engineering students who graduated every year, only 20 per cent are employable.

“Recognising that the future growth of India will depend on greater skill development, the National Policy for Skill Development aims to create a skilled workforce of 500 million by 2022. The 12th Plan has put a modest target of skilling 80 million by 2017,” he said.

The Minister said India’s average age by 2022 will be 29 years against 40 years in the US, 46 years in Japan, and 47 years in Europe.  He said if India wished to earn from the demographic dividend, then India must provide education and skills to all its youth so that they can develop themselves into a human resource, not just for India but for the world.

Raju lamented that despite rapid growth over the last decade, there has not been a substantial creation of new jobs. He added that this was a cause for concern as nearly 12 million people would join the workforce every year. He further pointed out that China moved 150 million people from agriculture to the manufacturing, whereas in India manufacturing has stagnated.

“India needs a massive improvement in the manufacturing sector and much greater investment in education and skilled labour,” he added. He also said the current economic downturn was a good time to focus on skill development and increase productivity.

In the keynote address, Chanda Kochhar, MD & CEO, ICICI Bank said every sector of India’s economy would have to perform if the country was to create 12 million jobs every year to absorb the rising numbers entering the workforce every year.

She pointed out that India must stay wary of the middle-income trap, wherein the country becomes old before it becomes rich. She said India must harness its demographic dividend over the next two decades; otherwise it risks getting trapped in the middle-income countries. “India will continue to stay young even as the world ages. Over the next two decades, India will add 25% to the world’s workforce,” she pointed out.