By R S Bawa and Rajiv Khosla

A spooky fear of the spread of job-killing technologies has gripped all the economies of the world today. Radical change in technology has led to the invention of highly efficient automatic machines that can work on the command of a few skilled workers. This replaces the jobs of many low and medium skilled workers. Productivity gains from this efficiency persuade owners to use more of such technologies, even when they know that the result is jobless workers. While the ongoing automation phase has thrown open prosperous job opportunities for some workers, millions of workers are finding themselves unfit for jobs due to the lack of necessary education and skills. This scenario remains intact irrespective of whether the country is developed or developing.

Imbalances in the Labour Market

If we take cognizance of the statistical figures pertaining to India, the world’s fastest growing economy (in terms of GDP), the mismatch between the demand and supply of labour becomes evident. A UNDP report found that from 1991 to 2013, less than half the Indians who sought jobs (300 million) got jobs (140 million).

Furthermore, a recent Labour Bureau report estimated that the unemployment rate in India shot up to a five-year high of 5% (8.7% for women and 4.3% for men) in 2015-16.

Within this context, it must be noted that companies like Hindustan Zinc Ltd. recently hired 17,000 drillers from Peru to work in Rajasthan. Furthermore, a National Skills Development Council (NSDC) report estimated that India will require around 119 million additional skilled workers by 2022. It is clear that labour market imbalances require the urgent attention of Indian policy framers. Adequate skill building needs to be ensured to encash the demographic dividend.

labour

The labour market imbalances require the urgent attention of Indian policy framers | Photo Courtesy: Flickr

Estimates by ASSOCHAM reveal that 93% of the total MBA degree holders (excluding the MBAs from Premier 20 Institutes) from 5500 business schools remain unemployable.

Though the overhauled education system churns out several million professional degree holders every year, a majority either remain unemployed or underemployed. Estimates by ASSOCHAM reveal that 93% of the total MBA degree holders (excluding the MBAs from Premier 20 Institutes) from 5500 business schools remain unemployable. A Delhi-based employment solutions company found that 90% engineers are unemployable. Therefore, in order to make a living, these overqualified professional degree holders are forced to take up menial jobs.

Thus, a rebalancing of the labour market by identifying the skills gap is required. Although the government has made efforts to address the problem, skill development has not been carried out as per the requirement of corporates and skilled workers have not been assured jobs.

Filling the gaps

Following in the footsteps of other countries across the world, we believe a three-tier structure of skill development for the Indian youth could work wonders for our economy.

A synergy needs to be developed amongst the organisations that are involved in skilled development.

We have nearly 20 government bodies including the HRD Ministry, Ministry of Labour and Employment, and above all, the Ministry of Skill Development and Entrepreneurship (MSDE), running different skill development programmes. These institutions lack a coordinated policy. In fact, there is so much confusion that until today, the government does not have a unified definition for the word ‘skill’.

India should emulate the well-coordinated approach adopted by Brazil. Petrobras, Brazil’s state-owned energy giant and Prominp, an association of government organisations, legendary businesses, trade associations and labour unions, developed a five-year projection for the manpower required in different sectors like oil and gas engineering, shipyard welding, pipe fitting etc. Prominp, in association with an education provider, has also co-developed a curriculum to be taught to students along with a training program for 30,000 people annually. In the same way, MSDE should play a pioneering role in coordinating the skill development efforts of different organisations besides finalising their budgets. Other related ministries and organisations should work closely under the ambit of MSDE. The Labour Market Information System should keep track of the latest technological developments. Deviations in pre-decided curriculums related to skill development should be introduced by the MSDE.

Overhauling the education system

Simply giving approval to 157 colleges and universities to run on the lines of community colleges will not work. Both public and private institutes need to be equipped to train apprentices. Full-time apprentices should be charged minimally and must be given an option to pursue higher studies in any institute after the completion of the course. Regular university students who enrol themselves in these institutes should be sponsored by corporates as per the mandatory 2% CSR quota. This can include the condition that they have to complete at least half their degree program with a stipulated grade point average.

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A Delhi-based employment solutions company found that 90% engineers are unemployable | Photo Courtesy: Flickr

Engineering and MBA students should also be groomed compulsorily in these institutes for at least 6 months. Corporate houses like Munjal, Mahindra, Shiv Nadar, Azim Premji, and Tata, who have already taken a step in this direction and set up their own universities customised courses, should be roped in.

Educating the educators

They need to redesign the syllabi of universities as the current curriculum is virtually outdated.

For training our trainers, we need to develop a consortium of consultants chosen from top performing institutes. They need to redesign the syllabi of universities as the current curriculum is virtually outdated. Furthermore, the faculty teaching professional courses should be spared from compulsory training in the corporate sector for at least two months in a year. This will enable them to practically analyse and solve problems at hand, besides developing live cases.

Concrete steps such as these with a 360-degree practical approach can help counter the challenge of disruptive technologies and allow us to realise the dream of a skilled India. In the absence of such measures, it will not be long before the unskilled and the unemployed demographic dividend becomes a demographic disaster.


R S Bawa is the Vice Chancellor, Chandigarh University Gharuan and Rajiv Khosla is the Head, University School of Business, Chandigarh University, Gharuan.

Featured Image Credits: slow paths images via Flickr

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Posted by The Indian Economist