The scale of what needs to be achieved is truly staggering but there a few lessons which India can draw from its neighbour and manufacturing giant China. According to a research paper by Santosh Mehrotra, Ankita Gandhi and A Kamaladevi, China's success in creating a skilled labour force can be attributed to its technical and vocational education and training system (TVET). In fact, the system helped China to successfully transform into world's manufacturing hub after it produced millions of skilled workers.
The TVET system ensures vocational training at the secondary level, higher educational institutes, adult training and retraining, training of vocational trainers, financing, and active participation of the local industries. The curriculum is designed keeping in mind the needs of the local industries and the Chinese government bears more than 70 per cent cost of vocational education. The Chinese government has made tuition free of cost for senior secondary vocational schools since 2009. It also extends a 1,500 yuan subsidy to students from rural areas to cover their costs. The entire edifice is backed squarely by the state.
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In India, it is difficult to replicate a similar model given the fact that education falls under the list of state subjects. The previous Congress-led United Progressive Alliance (UPA) government did initiate a process with the establishment of National Skill Development Corporation, a non-profit organisation which runs on public-private partnership mode, in 2009. Although the pace of training has been slow, the skill corporation was at least able to create an ecosystem comprising industry, training institutes and academia.
The ecosystem has some elements of the Chinese model, where the training institutes impart skills after due consultations with the industry. "Earlier the corporates were denying job opportunities to youth for lack of requisite skills. Now the gap between the demand and supply is being bridged through the 18 skill councils under the NSDC," says a former consultant with NSDC.
The other challenge before the Indian government is to bring state governments on board, given the fact that is education on the list of state subjects. In China students are exposed to vocational training at the secondary level (Class VII-IX). After secondary education, the Chinese students are supposed to take the senior high school entrance exam "Zhongkao". Their score determines whether they should be given academics or vocational education. Usually the students with lower marks end up in the vocational secondary stream. This doesn't happen in India, Mehrotra argues.
The NSDC, which now works under the newly created Skill Development and Entrepreneurship ministry, says it was talking to states to bring them on the same page.
The other stumbling block, probably a far bigger challenge as Dilip Chenoy, head of NSDC, sees is lack of long-term funding. Most training institutions work on grants, which are neither long term nor fixed. There is no stability in finances. The NSDC has an equity base of Rs 100 million, of which the private sector holds 51 per cent while the Central government has 49 per cent stake.
Al though the NSDC has begun loaning the training institutes at lower rates, the funding is never sufficient.
"Around 70-80 per cent youth can not afford formal training and this challenges our business model. Loans for training institutions should be more flexible and moratorium should be extended. The government must solve these critical issues if the ecosystem needs to be scaled up to meet the challenge of skilling 500 million," Sanjeev Duggal of Centum Learning , one of the largest training partner of NSDC says.
Then there is a matter of perception. Prime Minister Narendra Modi may wishes to make India the world's human resource capital by skilling 500 million, but it is difficult to convince youth from opting vocational training than academics. They have to be channelled into the right courses. "One needs to create a mindset for vocational training. In India an education degree is still preferred to vocational training. We have to give more incentive to tilt the balance in favour of vocational courses," says Gayatri Vasudevan of LabourNet.
This can be achieved if jobs are created simultaneous and workers are absorbed in industry without delays. The data suggests industry absorbed only half of those who underwent formal skilling. The much talked about demographic divined will convert to a ticking bomb with millions of skilled and unskilled youth do not find adequate jobs.