Just as the economy emerges from the second wave of Covid-19, it faces the dangers of the new variant – Omicron. Along with strained infrastructure and workforces, one of the biggest economic disruptions caused by the pandemic is long-term job losses.
Last year, India saw around 7.5% job losses during the lockdown. However, nearly 40% of affected workers were still unable to find paid employment 10 months after the nationwide lockdown in 2020, according to a report by the London School of Economics and Political, with this being even more acute for the younger workers in urban India, according to Science. 62 per cent of the population falls into the working age group, yet around 10 million new job seekers join India every year.
One of the main reasons for this employment gap is the lack of skilled labour. India has the potential to become the next big economic growth story because of its demographic dividend. While job creation to meet demand is crucial, the agenda should focus on up-skilling, re-skilling and up-skilling to prepare the workforce for a technology-driven knowledge and innovation economy.
We have to ask ourselves: How can existing channels of competence development be made more efficient? What developments are needed to accommodate this changing nature of work? How can the benefit of qualification for the economy and society be effectively realized?
First of all, the structural challenges of existing channels and institutions of competence development need to be identified and tackled in a targeted manner. India’s five pillars of VET system are: VET in schools; industrial training institutes (public and private); vocational training providers funded by the National Skill Development Corporation (NSDC); relevant government ministries; and private companies that provide on-the-job training. Increasing the efficiency of these institutional mechanisms can be an important intervention.
Second, there is a need to move from a supply-driven ecosystem to a demand-driven ecosystem – a shift that has not materialized due to a lack of capacity and a centralized means of assessing skill needs. This task, reflected in a National Skills Plan 2017-2022, was developed by the Ministry of Skills Development and Entrepreneurship (MSDE) in consultation with NSDC and Sector Skills Councils (SSCs). This needs to be decentralized to the state and county levels to determine what the labor needs will be in the years to come.
After this assessment and ensuring capacity-building interventions for line departments and grass-roots organizations, a holistic roadmap for capacity development can be effectively implemented.
Third, the focus should be on the resilience and sustainability of the jobs created. The focus should be on ensuring how certain occupational groups – heavy labourers, cleaners, technicians, etc. – can be automated while ensuring that the skill levels of the people working in those jobs are improved.
Finally, the dominant narrative of economies of scale should be reconsidered. Having companies that grow in size and scale as the only way to grow hurts inclusivity. The focus should also be on ensuring how different types of products, engineering techniques and skills can be used to support the horizontal growth of the economy. This is often referred to as “Economies of Scope” – using the skills of the workforce to manufacture different products, rather than mass-producing the same product.
It is imperative to nurture localized skills and enable those skills to be translated into business ventures. The policy focus should be on the human component of the economy.
A robust and sustainable skills ecosystem is the need of the hour for the Indian economy. As India embarks on its mission of upskilling, reskilling and upskilling to keep pace with the future of work, reforms need to be accelerated so that we can reap the benefits of a demographic dividend, a vibrant economy and India’s growing appeal as a destination for investments.
Neeraj Singh is a Politician and Chair of the Young Leaders Forum, Federation of Indian Chambers of Commerce & Industry, Uttar Pradesh Chapter
The views expressed are personal