INDIA HAS over 10,000 AICTE (All India Council for Technical Education) colleges but close to 9,000 of them don’t have full-fledged placement cells. Over 15 lakh engineers pass out from colleges across the country every year, but their employability rate is in single digits. Even business schools and regular undergraduate colleges face a similar challenge — absence of required skill set to be hired by organisations. In fact, companies across sectors are facing a talent shortage, but don’t have access to a quality talent base. The skilled talent gap in a country of 1.3 billion is rather appalling.
This explains why employment generation and creating opportunities, especially for the youth, have been a priority in Budget 2023. Finance minister Nirmala Sitharaman announced initiatives such as the Pradhan Mantri Kaushal Vikas Yojana 4.0 (PMKVY 4.0) which promises to skill lakhs of youth within the next three years. On-job training, industry partnership and alignment of courses with needs of the industry will be emphasised. The scheme will also cover new-age courses, including coding, AI, robotics, mechatronics, IoT, 3D printing, drones, and soft skills. To skill youth for international opportunities, the Budget has announced setting up 30 Skill India International Centres across states.
The government will also provide stipend to 47 lakh youth in three years. A direct benefit transfer (DBT) under a pan-India National Apprenticeship Promotion Scheme will be rolled out. On paper, these initiatives are forward looking and tick the right boxes. But while the industry is optimistic, experts feel India needs to do more to ensure employment and prevent talent drain.
“The government has to think hard as 50% of the population is below 20 years and every year 20 million people are crossing the age of 25. They will seek employment. The ‘Make in India’ employment initiative hasn’t really worked so the government will have to do this differently to create employment. Else, talent brain drain will happen,” explains P. Sriram, former Pernod Ricard executive director and chief strategist, Avtar Group.
Enabling jobs at scale would need private-public partnerships as well. “The government has to form a task force to implement all of these else there would be executional challenges. If they want to execute within a year, there has to be rigorous planning,” says Aditya Mishra, CEO, CIEL HR.
Public-private partnership doesn’t mean roping in organisations to skill and eventually employ. Prateek Shukla, co-founder and CEO, Masai School, which imparts skill-based training, says setting up standalone skill training institutes won’t help the cause. “Most colleges impart theoretical knowledge and not job skills. Most students have to enrol themselves into skill centres to be job ready. Instead of creating so many layers, the government should partner with skill-training firms and incorporate skill-based training in curricula of schools and colleges,” says Shukla.
The first step to include skill-based training in schools is to make going to school itself aspirational, says Neera Nundy, managing partner, Dasra, a Mumbai-based NGO. “A major reason for the high dropout rate in schools is because they don’t find applicability to get jobs. So, the need of the hour is to include skill-based curricula. The government should get the private sector to execute it and also help with funding.”
Though scattered, there are examples of public-private partnerships in imparting skill-based education. The Young Indian Philanthropic Pledge (YIPP), a platform that brings together new-age philanthropists mostly from the start-up ecosystem, recently partnered with the Karnataka government to transform 105 schools and adjoining ‘anganwadis‘ as ‘model schools‘ by 2025. The YIPP, which comprises start-up stars such as Nikhil Kamath (co-founder, Zerodha), Sujeet Kumar (founder and CEO, Udaan) and Prashanth Prakash (co-founder and partner, Accel) has collectively raised ₹40 crore for this project. YIPP will get leading edtech companies to set up smart classrooms and come up with techniques to improve enrolment and retention of students (especially in middle and high school which has maximum dropouts) by building capacities of teachers, augmenting physical and digital school infrastructure and employment readiness skills.
A number of state governments pay stipend to private companies to skill and employ. That, according to experts, is a burden on companies who often don’t have the wherewithal to employ at a large scale. “States shouldn’t burden companies to train people. They should instead give the stipend to colleges where infrastructure is available, and spend on getting teachers or trainers from the industry to impart training,” suggests Shukla.
In fact, Nirmal Singh, founder-CEO, Wheebox.Com, a talent support company, recommends decoupling of training and employment. “There needs to be separate budget allocation for training and employment. The employment department should be liable only for the number of jobs in the formal or organised space. The government needs to separately look for agencies or companies that would help them with employment.”
The skilled talent gap is stark. “We don’t have good visibility in employment for the next 12 months. We work with over 400 employers and there is a huge drop in hiring. They are not saying that they don’t want to employ, they have put it on hold, as there is not enough employable talent they could hire,” says Wheebox’s Singh.
In its effort to create jobs, the government can’t overlook the start-up ecosystem either. “The start-up ecosystem needs immediate attention. Youth today are not seeking employment; they want to do something different. The government has to figure out ways to encourage these start-ups. What are the tax sops that can be given to enable them? Larger companies need to be encouraged to support start-ups, and incentivised for supporting them. If we do this properly, it will help India emerge as a strong manufacturing base, and a close competitor to China and other countries,” explains Sriram of Avtar.
The job-creation initiative announced in Budget 2023 are in the right direction, but it would take a while for them to improve the employment scenario in the country. The implementation has to begin in earnest, though. The country urgently needs high-quality skilled talent across sectors.