Dr. J Geeta Reddy, Hon’ble Minister for Industries, Government of AP
Mr. G Vinod, Hon’ble Minister for Labour, Employment, Factories and Boilers, Government of AP
Respected dignitaries, Ladies and Gentlemen and my dear friends
It gives me immense pleasure to be part of this event today and I congratulate CII for its proactiveness for bringing this very pertinent issue to this platform comprising cross-section of people such as policymakers, industry etc.
Economic growth in India has, in the last few years, picked up considerable momentum with services and the manufacturing sector showing a great deal of buoyancy. The economy has transitioned into a knowledge and skill-intensive service sector dominated economy in which manufacturing is also picking up. It is this distinctive feat that has put India in the league of fastest growing countries in the world. On the other hand, it has given rise to the issue of insufficient skills in India to meet the growing requirements of the Industry.
For the sustenance of economic growth at about 9% in future, there is a consensus amongst the stakeholders that much greater attention would have to be paid to the area of skill development.
The problems for building people in India can be classified into 3 broad areas:
(i) Problems in Primary education;
(ii) Problems in development of Vocational Skills and
(iii) Problems in Higher Education
In this talk, I will focus on items (ii) and (iii) without touching on the vast issues in Primary education to reduce drop-out rates, reduce illiteracy levels and improve the quality of education.
The essence of the problem in vocational skills is the absence of an adequate focus and orientation in our country in understanding the value and importance of vocations. When we talk of vocations also, we tend to think of them in only old economy terms. There is a need to develop many new skills and vocations which can accelerate our new economy development such as in areas of Digital media, graphic arts, design and digital printing, etc.
In the case of higher education, the essence of the problem is in resolving a paradox of high availability / high unemployment on one hand with a talent crunch on the other. The root cause for this lies in enhancing the quality of higher education beyond a few of the leading Institutions which are, of course, world class and have done the country proud.
Let me now turn to the problems of each of these two areas in some detail.
I. Problems of Vocational Skills:
As per the educational statistics of Ministry of Human Resource Development, total enrollment in technical streams is 7 lakh in engineering, 7.5 lakh in ITI and 4 lakh in polytechnics. Around 110 lakh students are enrolled in other higher education courses across Universities. Out of the total enrollment in University sector, graduates in the conventional streams such as B.A, B.Com and B.Sc outnumber those with professional qualifications with these streams accounting for more than 80% of the enrolment. The prime reason for this skewed distribution of enrollment is lack of capacity to find a place in professional courses.
As far as ITI and polytechnics are concerned, intake and capacity into these courses has been increasing marginally over the years. This is due to limited initiative to market these courses amongst students and increased preference for university level courses due to the perception that higher qualification will lead to better job prospects.
At the school level, there is a lack of awareness and willingness to actively engage in vocational education and training. Against a target enrollment of 25% of all higher secondary students in vocational courses by the year 2000, total enrollment of meagre 3% has been achieved so far. With a utilization of only about 42% of total capacity of 846,100 seats in vocational courses, only about 350,000 to 400,000 students are enrolled in vocational education.
A large number of ITI and polytechnics trained students also suffer from skill deficiencies on account of the obsolescence of curriculum and absence of reasonably latest equipment, tools, and manufacturing/production/delivery processes. The levels of vocational skills amongst labor force in India compares poorly with other countries with only 5% of the Indian labour force in the age group 20-24 obtaining vocational training compared to 96% in Korea and anywhere between 60-80% in other industrialised countries. This emphasizes the point that education system in India is focused on imparting general academic qualification with little or no vocational orientation.
Let me now turn to the issues in higher education.
II. Issues in higher education:
In the first instance, I should acknowledge that the Indian educational system is widely acknowledged as one of the engines of the country’s expansion. The country’s schools are responsible for producing a cadre of highly skilled, English- speaking workers who represent the human capital that has fueled economic growth -particularly growth of the country’s world-class information technology (IT) sector.
To sustain its economic growth, India will have to keep expanding its labor force. The IT sector alone expects its workforce to nearly double over the next three years, from1.6million today to 2.9million in 2009. While IT companies are seeking to recruit so many new workers, other sectors of the economy—including automobiles, aerospace, retail, construction, biotech, healthcare, financial services, travel, and hospitality— are beginning to grow rapidly and are joining the competition for top talent.
As I mentioned earlier, we do have a paradox of both unemployment and talent crunch at the same time. In terms of enrollment, India’s higher education system is the third-largest in the world (only China and the United States are larger). Moreover, India has the largest number of higher education institutions of any country: more than 18,000 institutions (348 universities and 17,625 colleges). The overall size of the country’s higher education system has increased substantially, driven primarily by the establishment of private institutions designed to meet the demand for more education. The number of Indians participating in higher education more than doubled from 4.9 million in 1990 to nearly 10.5 million in 2006. This increase in size has not been matched, however, with an improvement in the quality of higher education, except in our premier Institutions.
The IITs can accommodate only 5,500 new students each year, however, and more than 300,000 individuals compete for these coveted slots each year. Below the limited tier of IIT’s and NIT’s, the quality of Indian higher education falls off sharply.
Except in a few elite institutes, engineering education in India is often outdated and irrelevant. Most graduates do not possess the skills needed to compete in the economy, and industries have been facing a consistent skills deficit. Also, most institutes, including premier institutes, fail to attract and retain quality faculty. These deficiencies in technical and engineering education mean that India runs the risk of missing out on significant opportunities.
In contrast to the United States and most developed countries, the unemployment rate among Indian college graduates—17 percent in the 2001 census—is higher than the unemployment rate for high school graduates. For many Indian graduates, the problem is not just that they lack specific technical skills that industry needs but that they lack the “soft skills”—the ability to listen and to communicate well (in English), to solve problems, and to work collaboratively and creatively—that are among the abilities that many companies are seeking in their new hires.
The shortage of qualified personnel also appears in specialized areas. As India attempts to expand into higher value-added services, for example, it will be hampered by the fact that the country produces only 6,000 PhDs annually in all areas of science and engineering.
The solutions to the Quality problem include, amongst others, the following:
(i) Making Education an attractive career to attract the best quality as Faculty
(ii) Improving quality through Finishing schools where CII has a program for growth of the same
(iii) Vastly expand the reach of e-Learning programs
(iv) A collaborative approach between Government, Institutions and Industry.
Action is suggested as follows:
(i) The Government should lay down the policy framework to bridge the skill gaps and channelise the implementation by appropriately engaging the industry at various levels.
(ii) The educational institutions should strive to improve the quality of education and effectiveness of delivery mechanism to meet the requirements of industry by undertaking measures such as changing curriculum, improving teaching methods and techniques, investing in appropriate infrastructure and working towards enhanced industry – institute interaction.
(iii) Industry, as a consumer of the output of the educational system, needs to support the actions taken by the other stakeholders by participating in the skill development initiatives which could span across various areas such as providing capital to establish institutions or improve institutions, undertaking guest lectures in institutions, participating in cluster level skill development initiatives in collaboration with education institutes, managing all activities involved in imparting appropriate skills by adopting institutes. As Mr. Santhanam pointed out, Industry also has a key role in facilitating interaction between the government, institutions, employers and potential employees.
As far as identification of the most effective implementation mechanism is concerned, I believe that it would vary according to the complexity of skills involved. As rightly pointed out by Mr. Santhanam, the issues of skills deficiencies have to be addressed at three levels: basic skills for entry level / contractual employment, semi-skilled workforce with focus on employability and highly skilled workforce for specialized skills.
It is clearly understood that skill development initiatives at each of the three levels discussed above would call for coordinated efforts from all the three stakeholders but we need to understand the degree of responsibility and nature of involvement of each of the stakeholder in these initiatives? What should be the specific courses / skills to be inculcated at all levels, where should it be funded from, who shall be responsible for execution, how do we ensure consistency of education / training standards, what should be the monitoring and review mechanism to measure efficacy of these initiatives?
These are some of the questions we shall seek answer to during this two day conclave on “Building Skills; Building India” and I am sure there will be fruitful discussions among our panelists on these issues. I also take this opportunity to wish this conclave success in generating awareness about the issues and coming up with innovative ideas which will help in the important national mission of “Building People, Building India.”
Thank You,
Ashok
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