New Delhi, 15 September 2016: A bright spot in todays otherwise subdued global economy, India symbolises a remarkable growth story for the world. ‘Skill India’ is one of Prime Minister Narendra Modi’s flagship initiatives aimed at sustaining this growth story and make India the world economic leader. FICCI and KPMG in India together launched a white paper titled ‘Re-engineering the skill ecosystem’ at the FICCI-KPMG Skill Summit 2016 to trace the Indian growth story by tracking the Indian Gross Domestic Product (GDP) and Gross State Domestic Product (GSDP) of the states along with the evolution of Indian workforce over the years.
Mr. Mohandas Pai, Chairman FICCI Skill Development Committee and Chairman Manipal Global Education, elaborates, “This paper explores complexity and diversity of our country in terms of economic development, demography, geography, internal & international migration, unavailability of relevant data etc. There is an urgent need to evaluate our current scenario, look at future projections and reengineer the skill ecosystem accordingly.”
As per the current forecast by the Ministry of Skill Development and Entrepreneurship (MSDE), there would be an incremental requirement of skilling 110 million additional workers by 2022 and to achieve this and reskill the existing workforce the ministry has embarked on a herculean task of skilling 400 million workforce by 2022.
Mr. Pai Further elaborated that “the paper says that in the coming years, services and manufacturing are likely to create employment opportunities. However, to reach full potential, India needs to gravitate towards a formal system. Currently, only 4.69% of the Indian population has undergone formal skill training. There are two important trends vis-à-vis the Indian workforce that requires attention and action. First, the scope of job creation in formal employment opportunities and secondly, the implications of Industry 4.0 on future jobs.”
The biggest problem before Skill India is the accuracy and reliability of data. The multiplicity of sources must be brought together if a coherent and comprehensive labor market information system is to be established, and this calls for a common information system as an essential component of the LMIS. EPFO, ESIC and other official statistics on government employees provide critical data on formal employment to identify industries to be prioritised for skill development. Skill gap studies for these growing sectors can provide additional information regarding skilling needs at an aggregate level.
The paper also highlights the phenomenon of employment clusters. States such as Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Delhi together provided employment to 57 per cent of the nation’s formal workforce in 2014-15. This fact clearly indicates the high concentration of formal employment in some states. Skill development in these States should be based on the industries cluster present. Industries should be incentivized to set establishments in labour incentive states to arrest internal migration and skill development in these states be planned accordingly.
Narayanan Ramaswamy, Partner and Head, Education and Skill Development, KPMG in India, says, “The bright side to the challenge of skill development is that the government recognizes India’s favourable demographic dividend and is shouldering the responsibility of providing employment to the millions of youth in a big way. However, nothing short of a revolution is required in skilling and vocational education space, which in my view has assumed critical proposition and might well determine the future growth of this country.”
Ms. Shobha Mishra Ghosh, Sr Director FICCI added, “Vocational Education and skill development have never been aspirational in our country. In India, 77% above 30 years and 42 % of those in the age group 18-29 years are employed. Poor quality of education and demand vs supply mismatch are two important issues that emerge as the key reason for the rising number of unemployed graduates. There is urgent need to integrate skill development within our formal education to meet the 21st century skill requirements.”
The white paper touches upon strategic changes to re-engineer the ecosystem that can facilitate the transformation:
Established in 1927, FICCI is the largest and oldest apex business organization in India. Its history is closely interwoven with India’s struggle for independence, its industrialization, and its emergence as one of the most rapidly growing global economies. A non-government, not-for-profit organization, FICCI is the voice of India’s business and industry. From influencing policy to encouraging debate, engaging with policy makers and civil society, FICCI articulates the views and concerns of industry. It serves its members from the Indian private and public corporate sectors and multinational companies, drawing its strength from diverse regional chambers of commerce and industry across states, reaching out to over 2,50,000 companies. FICCI provides a platform for networking and consensus building within and across sectors and is the first port of call for Indian industry, policy makers and the international business community.
About KPMG in India
KPMG in India, a professional services firm, is the Indian member firm of KPMG International and was established in September 1993. KPMG has offices across India in Chandigarh, Gurgaon, Noida, Ahmedabad, Vadodara, Mumbai, Pune, Bengaluru, Kochi, Chennai, Hyderabad and Kolkata. We strive to provide rapid, performance-based, industry-focused and technology-enabled services, which reflects a shared knowledge of global and local industries and our experience of the Indian business environment.
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