India needs skill development to transform its demographic potential into economic growth.

Source: The post India needs skill development to transform its demographic potential into economic growth has been created, based on the article “We need a data-driven strategy to plug our skill gaps” published in “Live mints” on 8th July 2024

UPSC Syllabus Topic: GS Paper 3- Economy- Employment

Context: The article discusses India’s young population, which is both an opportunity and a challenge for its economy. It emphasizes the need for skill development to transform this demographic potential into economic growth. It highlights issues like falling labor participation and gaps in skilled labor across various regions.

For detailed information on India Employment Report 2024 read this article here

What is the present condition of India’s workforce?

1. Decrease in Labor Participation: India’s labor mobilization has fallen from over 70% in 1990 to 56% in recent years, indicating underutilization of the workforce.
2. Shift in Skill Levels: Growth in highly skilled workers (skill levels 3 and 4) has decreased by over 5 percentage points between 2017 and 2022 in 22 states. In contrast, the semi-skilled workforce (skill level 2) has grown significantly, with a national growth rate of 59.5% annually.
3. Rural-Urban Skill Gap: Urban areas have higher concentrations of skilled jobs, while rural regions have lower skill intensity, focusing more on agriculture and traditional crafts.

What are the issues with skill development in India?

1. Insufficient Formal Training: A considerable portion of the workforce aged 15 to 59 lacks formal vocational or technical training, with the proportion having dropped from 91.9% in 2017-18 to 72.6% in 2022-23, indicating a major gap in formal skill development.
2. Skill Intensity Disparity: Rural areas have much lower skill intensity compared to urban areas, which host more skill-intensive industries like IT and financial services. This disparity highlights a need for balanced growth and skill development in rural sectors.
3. Reliance on Low-Skilled Labor: Despite growth in the semi-skilled workforce, there is still a significant reliance on low-skilled labor, evident from the 24.8% increase in low-skilled workers between 2017-18 and 2022-23, driven by industries such as construction and manufacturing.

How is the Government Addressing These Gaps?

1. Pradhan Mantri Kaushal Vikas Yojana (PMKVY): This program significantly boosted the semi-skilled workforce with a 59.5% growth rate from 2017-18 to 2022-23. It focuses on providing skill training and certification.
2. Skill India Mission: Aims to expand the workforce’s skills, particularly at skill level 2, which has seen substantial growth.
3. Skill Census Proposal by Andhra Pradesh: Led by Chandrababu Naidu, this initiative aims to assess skill levels across regions and sectors to target skill development efforts more accurately, promoting competitive federalism among states.

Way forward

Investing in human capital and using data-driven strategies can turn India’s demographic advantage into economic growth. A skilled workforce will drive innovation, productivity, and national competitiveness, helping India become a developed economy by 2047.

Question for practice:

Discuss the main challenges and initiatives related to skill development in India’s workforce