Salvaging the Indian demographic dividend must be a key part of India’s growth story. In 2016, the Government of India formed the Sharada Prasad Committee to rationalise the Sector Skill Councils (SSCs), which are employer bodies mostly promoted by the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry and other industry associations, and improve ‘Skill India’.

The committee submitted its report in 2016. Now over a year later, it may be prudent to look at the reforms it suggested and action taken in the vocational education/training (VET) system.

The two goals in ‘Skill India’ are, first, to meet employers’ needs of skills and, second, to prepare workers (young and old) for a decent livelihood. The recurring theme in the report is its focus on youth. Each recommendation underlines that the VET is not just for underprivileged communities; it is not a stopgap arrangement for those who cannot make it through formal education. It is for all of us.
Streaming for students
It suggests concrete steps to ensure a mindset change, such as having a separate stream for vocational education (in secondary education), creating vocational schools and vocational colleges for upward mobility, and having a Central university to award degrees and diplomas. Streaming would mean that the ‘diploma disease’, which is resulting in growing tertiary enrolment along with rising unemployment among the educated, would be stemmed. China, for instance, has such a separate stream after nine years of compulsory schooling, and half the students choose VET at the senior secondary level (after class nine).
This requires a serious engagement of employers. Private vocational training providers (VTPs) that mushroomed as private industrial training institutes (ITIs) and National Skill Development Corporation (NSDC)-financed short-term training providers are no substitute for industry-employer engagement with each pillar of the VET ecosystem: secondary schools; ITIs, public and private; NSDC-funded VTPs; ministries that train, and firms that conduct enterprise-based training.
A global alignment
The second recurring theme is the realisation of human potential. This means aligning the courses to international requirements, ensuring a basic foundation in the 3Rs, and life-long learning. It implies national standards for an in-demand skill set with national/global mobility that translates into better jobs. Short duration courses (with no real skills) that provide low pay for suboptimal jobs cannot be called national standards. Hence the current national standards have to drastically improve.

This means that we should have no more than 450 courses — Germany has only 340 courses — in accordance with the National Classification of Occupations 2015 (which itself was based on the International Standard Classification of Occupations). Such trainees will be a national asset. What we have instead are nearly 10,000 standards, produced mostly by consultants. There cannot be thousands of standards (compressed into 2,000 qualification packs/job roles), and “delivered” to trainees in a matter of a few months. This is not what the National Skills Qualification Framework (NSQF) had recommended. The focus should be in strengthening reading, writing and arithmetic skills. No skill development can succeed if most of the workforce lacks the foundation to pick up skills in a fast-changing world. Vocational training must by definition be for a minimum of a year, which includes internship (without which certification is not possible). Short-term training should be confined to recognising prior learning of informally trained workers who are already working.
The third theme is to do what is right when no one is watching you, because, as in other industries, the regulator has displayed a limited capacity to regulate. Cases of a conflict of interests, of rigged assessments and of training happening only on paper are not new.
A recent parliamentary report on private ITIs has exposed yet another scam — the Quality Council of India’s approval for thousands of private ITIs. If the number of private ITIs has grown from under 2,000 to over 11,000 in five years, it points to a colossal failure of regulation, accompanied by a lack of quality training on offer at such ITIs.
There is a huge ethics and accountability issue if there is no credible assessment board and when there are too many sector skill councils, each trying to maximise their business. The Sharada Prasad Committee had recommended that the number of SSCs should correspond to the National Industrial (Activity) Classification (which has 21 economic activities across the entire economy), but which is still way larger than Australia’s six. Little has happened except for the number of SSCs dropping from 40 to 39.
For a unification
The first policy step should be towards a unification of the entire VET system. What we have today are fragmented pillars. Each of the five pillars does what it wants to, with no synergy. An NSDC-centric focus has left the skill development efforts of 17 ministries out of the same scrutiny. ‘Skill India’ can have an impact only when all of them work together and learn from each other. SSCs, which are supposedly industry representatives, should be engaging themselves with each pillar of the system, and not just NSDC-funded VTPs.
The second step is to enhance employer ownership, responsibility and their ‘skin in the game’. Media reports often highlight the corporate sector lamenting about “unemployable youth”. The private sector places the onus on the government, treating it as a welfare responsibility, while the government looks to the private sector since it is the end consumer of skills. The result is that only 36% of India’s organised sector firms conduct in-firm training (mostly large ones, which are also the only ones that take on apprentices under a Government of India Act).
We need a clear fix for this. In this regard the committee’s recommendation of a reimbursable industry contribution model (applicable only to the organised sector) should solve the perennial problem of poaching while providing a common level field. It could ensure reimbursements for those companies undertaking training while rewarding industry for sharing and undertaking skilling until everyone in the company is skilled. This will lay the foundation for making at least our organised workforce 100% skilled.
The third policy step is in getting the government to recognise that decades have been spent in building a government-financed and managed, and hence supply-driven system.
Data gathering by sector
Does the government, which is not generating much employment in the public sector, really know what industry’s skill requirements are in the private sector? Private employers do know this but there has been no serious effort by them to gather data. So the government needs to confine itself to roles it is capable of performing and not involving itself through multiple ministries in activities in which it has no comparative advantage.
One such role is to have surveys, once every five years, through the National Sample Survey Office, to collect data on skill providers and skill gaps by sector. Such data can guide evidence-based policy-making, as against the current approach of shooting in the dark.
Finally, we need more reflection from stakeholders on the actual value addition done by the skilling initiative. The NSDC, which was envisioned as a public-private partnership, receives 99% of its funding from government, but its flagship scheme has a less than 12% record of placement for trainees. The NSQF framework has seen little adoption in private sector. And, more than two-thirds of courses developed have not trained even one student so far.
India can surely become the world’s skill capital but not with what it is doing right now. The reforms suggested by the committee can be a good starting point for we cannot let another generation lose its dreams.