India plays catch-up in workers' skills training

Workers at a manufacturing plant in Rajasthan. Just 2 per cent of Indian workers have formal skills training and 10 million are undergoing training this year. In contrast, 90 million are trained in China annually.
Workers at a manufacturing plant in Rajasthan. Just 2 per cent of Indian workers have formal skills training and 10 million are undergoing training this year. In contrast, 90 million are trained in China annually.PHOTO: BLOOMBERG

It faces dire lack of skilled labour in sectors like manufacturing, construction and retail

Mr Sandeep Rao completed a two- year course at a government vocational institute more than a month ago with the hope of getting a job at a car company.

But within weeks of completing the course to become a turner - a highly skilled worker who makes metal components such as screws - the 22-year-old was back in the classroom, this time at a training centre run by IL&FS Skills, a private vocational training company.

"I needed to get some practical training on an advanced machine. Today's industry demands are as such," said Mr Rao, who is nearing the end of the 45-day course.

At a government-run Industrial Training Institute, he had trained mostly on manual machines, but car production lines now are mostly automated.

"I now feel a lot more confident about getting a job," he said.

Indian Prime Minister Narendra Modi's hope of turning India's demographic dividend into an advantage for the world's fastest-growing economy hinges on not just creating jobs, but also making millions of young Indians like Mr Rao employable through training programmes.

It is key to his "Make in India" manufacturing drive.

A mere 2 per cent of Indian workers have formal skills training and 10 million are undergoing training this year. In contrast, 90 million are trained in China annually.

India has a dire shortage of skilled workers in sectors such as manufacturing, construction and retail because of inadequate training, outdated curriculums, high school dropout rates and a negative perception of skills training, which is seen as being for those who cannot get into college.

To make it worse, India's caste system dictates the social perception that manual jobs such as plumbing are for the lower castes.

India produces thousands of software engineers, leading Nobel laureate Amartya Sen to remark that while Indians do well in high-skills- related jobs such as information technology, "in the middle-skills segment, we are very bad".

The education system leaves much to be desired, with a dropout rate of 40 per cent, which translates into millions.

Vocational options are limited for dropouts as there are only 13,505 Industrial Training Institutes, which are supplemented by about 8,000 private training centres that offer short courses.

Many major businesses have in-house training because many Indians who have had skills training still fall short of industry requirements.

At Wave Infratech, a real estate firm, in-house training is provided for entry-level jobs such as security guard and housekeeping attendant. But nearly 40 per cent of the unemployed young people they train often return to their villages.

"We find that training young people is not a problem, but retaining them in jobs is the biggest challenge. They hear about the long hours and suddenly they don't want to work any more," said Mr Manjir Ghosh, the firm's head of corporate social responsibility.

In the villages, they earn at least 5,000 rupees (S$100) a month under the National Rural Employment Guarantee Scheme. They can earn more - about 8,000 rupees - in the city, but living expenses and rent take up a bigger chunk of their pay.

What makes this a problem is that 60 per cent of India's population live in the rural areas.

Experts have suggested that one solution is for the government to bring jobs closer to areas where there is a large captive workforce, such as by setting up industrial clusters in poor states like Bihar and Uttar Pradesh, and to provide affordable housing for workers like in China.

"In labour-surplus states (which witness large-scale migration), the government should promote those industries that have a large manpower requirement," said Mr Narayanan Ramaswamy of KPMG in India. "Local aspirations and needs should be taken into account."

IL&FS Skills chief executive officer R.C.M. Reddy said vocational training institutes have to be brought on a par with other institutes of learning. "The only way to make jobs aspirational is to integrate skills with education and create very high standards in skills education," he said.

Mr Modi has made skills training a priority area and has set up a skills ministry. He is known to be keen on replicating Singapore's success in vocational training, with a proposal under discussion to recreate Singapore's Institute of Technical Education in every Indian state.

"We can take the best practices from Germany and Japan, but it will take time (for them) to be grafted. Anything from Singapore would be acceptable. Singapore fits in very well with our system," said Mr Rohit Nandan, the top bureaucrat in the Ministry of Skill Development and Entrepreneurship.

He said the picture was not all gloomy on the skills front, with the government seeing a 36 per cent jump in the number of people who have undergone skills training this year.

"Our system is also evolving... We are in the process of learning and adopting the best practices from all around the world," he said.

A version of this article appeared in the print edition of The Straits Times on October 03, 2016, with the headline 'India plays catch-up in workers' skills training'. Print Edition | Subscribe