India’s neglected skills market

Skills shortage, did you say? — V. Raju

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Virtually every sector of activity is screaming hoarse about the skills gap. But lakhs of skilled workers are denied access to productive work for want of a hammer or a wrench.

November 20, 2013:  

It is a common sight in many of India’s bustling, booming cities and metros. If you go early enough in the morning to the bridge near Mumbai’s infamous Arthur Road Jail, or Delhi’s Govindpuri market, you will see a long line of men waiting. In the slack season, when supply far outstrips demand, it is not uncommon for many of them to have travelled long distances to assemble in the night.

Many of them are with toolkits, or just some components — hammers, wrenches, wood planes, etc. They are skilled workers — masons, plumbers, electrical workers, bricklayers and the like — who are waiting for contractors to come and pick them up for short-term work. And that patch of pavement, an informal skills market.

The fortunate ones — and by unspoken agreement, the ones who get a place at the head of the queue — are those who possess their own tools. Something as basic as a heavy hammer or an early industrial revolution-design pipe wrench, is enough to give them preferential access to the better paid work.

The ones without tools have to wait for a contractor willing (or desperate enough) to either provide the tools, or the money needed to hire them for a day.

Getting it right on paper

This is the reality of India’s skills marketplace. On the one hand, you have a situation at the national level, where virtually every sector of activity, from manufacturing and infrastructure to services, is screaming hoarse about the skills gap.

On the other hand, at the ground level, lakhs of skilled workers, who have acquired these skills by simply investing their time and labour, are denied access to productive work, for something as simple as lack of necessary tools — tools as simple as a hammer or a wrench.

These are the human variables in India’s frustrating workforce equation. We know parts of the equation — how fast the economy is growing, at what rate it is expected to grow.

We also know how fast the population is growing and how many people are being added to the workforce every year (the latter is about 12 million).

We also know what we want and where we want to go — as Prime Minister Manmohan Singh famously said, to make our Mumbais into Shanghais. What we don’t know is how to solve for ‘X’ — the millions of mostly untrained, unskilled workers pouring into the labour pool, and the growing inability of the system to cope with skilling them adequately to make them employable.

It is not as if the government isn’t unaware of the problem. The preamble of the National Skill Development Policy, released in 2009, lays it out admirably clearly:

“A task of skill development has many challenges which include:-

a) Increasing capacity and capability of existing system to ensure equitable access to all.

b) Promoting life-long learning, maintaining quality and relevance, according to changing requirement particularly of emerging knowledge economy.

c) Creating effective convergence between school education, various skill development efforts of government and between government and Private Sector initiative.

d) Capacity building of institutions for planning, quality assurance and involvement of stakeholders.

e) Creating institutional mechanism for research development quality assurance, examinations & certification, affiliations and accreditation.

f) Increasing participation of stakeholders, mobilising adequate investment for financing skill development, attaining sustainability by strengthening physical and intellectual resources.”

With this goal in mind, the government set up the National Skill Development Mission, which in turn set up a national level council, and promoted the National Skill Development Corporation (NSDC) as a public-private partnership initiative to provide the funding and course guidance.

Where’s the action?

The target was ambitious. The goal was to scale up the rate of skill development and to skill a staggering 500 million people by 2020. The goal was to not just create skills, but develop inclusivity, erasing divides between male/female, urban/rural, etc., in the skills marketplace, and develop a system which will dynamically adjust with the needs of the economy over time.

If the country needed to build more roads in a hurry, more skilled road workers will be created.

If the need was for building modern houses, more skills needed by the real estate and construction sectors will be created, and so on.

And how are we doing so far? According to the National Skill development Agency, as of September this year, of the annual target of skilling 73.42 lakh persons (which itself was scaled back by almost 50 per cent from the 12th Plan target of skilling 150 lakh per year, a target which was meant to have been reached by 2012-13), the “reported progress” was 18.87 lakh persons. Halfway through the year, the NSDC had reached only 5 per cent of its target,

The Ministry of Woman and Child Development 14 per cent (so much for gender equality), the Ministry of Minority Affairs just 0.77 per cent (so much for inclusivity!), and the Ministry of Road Transport and Highways had not reported anything at all!

Even the reported numbers — whether it is 75 lakh or 20 lakh or whatever — appear difficult to believe, given the lack of clear audit trails, and also by the anecdotal evidence from industry.

Industry is vocal about the skill gap in the workforce, and the lack of a system to produce ‘job ready’ candidates.

Whether it is a software engineer or a crane handler or a plumber or an electrician, industry complains that it has to spend time and money in getting their workers actually fit to do the jobs they were hired to do.

From IT giants such as Infosys or Wipro, which have full-fledged internal ‘universities’ to convert raw engineers into productive software professionals, to infrastructure builders such as L&T, GMR and the like, which have come together to train people for their needs, to even manufacturers of bathroom fittings, who are forced to retrain plumbers — and sometimes, even finance their tools, like modern torque wrenches and precision spanners — industry is spending money it says it cannot afford, in order to order to train the workers it needs.

This has led to other distortions. Notably, having market-ready skills is now a monetisable advantage. For instance, a backhoe/crane operator in the NCR region, the nation’s largest pocket of active construction in real estate and housing, reportedly hops jobs faster than skilled software coders in Bangalore — and for similar jumps in pay.

Skilled operators of high-tech CNC (computer numeric controlled) machines have formed informal co-operatives and auction off their services to the hired bidder.

On the other hand, those without ‘job ready’ skills — like knowing how to run a modern CNC machine, or pneumatic drill, or those with the skills but without the tools, like the plumbers and carpenters lining up at Chinchpokli — are not reaping the benefit of India’s growth.

On paper, we appear to know the scale of the problem and are even doing impressive things about solving it.

In reality, it is still India’s age old caste/community-based informal trades and guilds which are still doing the heavy lifting when it comes to skill development.

NAME - SHYAM KISHOR SINGH
               PGDM - 1sem