Can India become the ?skill capital? of the world?

By Smera Dania

India is the seventh largest economy in the world. It became the world’s fastest growing economy in the last quarter of 2014, surpassing China with a growth rate of 7.6%. Increased investment, greater consumer and public spending, industrial growth and pro-market reforms brought in by the Modi government have all contributed in helping India to retain its title of the world’s fastest-growing economy. However, India also faces a number of challenges which pose an ongoing threat to its exceptional growth.

One such challenge is unemployment. Unemployment is the result of a number of issues, with a major issue being India’s high population. However, population can be seen either as a liability or as an asset. If India is to exploit its population as an economic asset, the government must formulate job-creating policies before the population starts to age. ‘Skill India’ is one such scheme, launched by Modi’s NDA government on the 15^th of July 2015. However, this scheme comes with its own set of challenges.

Challenges for the Skill India program

One of the major concerns of the government’s emphasis on skills is the potential trade-off with education. Low-income families may force their children to skill-up in order to bring extra income to the household as soon as possible, thus, preventing them from pursuing formal education. However, that missed education can play a huge role in helping individuals to reach their full potential. Education is a more effective means of social mobility, it helps to remove the limitations of caste as well as class and gender inequalities. Given the limited budget of the government, it seems that resources will have to be shifted away from education in order to fund the ‘Skill India’ initiative.

Secondly, with the inability of both the agriculture and manufacturing sectors to produce productive jobs, up-skilling may appear to be an alternative was to tackle unemployment. However, dumping more skilled young people into the current market may simply lead to an expansion of the informal economy. Many plumbers, technicians, and beauticians only ever work in the informal sector, and typically have low productivity. The informal sector is not a very dynamic part of the economy and therefore contributes little to economic growth.

Lastly, the lack of an educational component and the scheme’s reliance on the informal sector casts doubt upon the government’s real objectives. The target groups of the skill training program are largely low-income people and the kind of skill training that is being supported is generally concerned with informal work that caters to the needs of the formal economy. This approach relegates the children of poor families to work that lies at the bottom of the hierarchy of employment and is bound to increase that gap between rich and poor, which will hinder the country’s economic growth.

Overcoming the challenges

In a country like India where a large number of people are known to reside below the poverty line, securing a minimum subsistence level for all families is, in itself, a big achievement. The skill training program intends to resolve this issue by providing the poor with the skills necessary to get basic employment that can help them to meet their needs. However, in spite of the central government’s latest initiative, there remain a number of serious challenges to raising the condition of India’s poorest. Nevertheless, the dream of making India the ‘skill capital’ of the world is a worthy goal and, as the challenges are overcome, such programs can have good results in the long run.

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