Minister K.Taraka Ramarao attended Human Capital Summit 2016 in Sri Lanka.Minister would be spoke about “Building a future ready workforce – Indian experience”.
The Prime Minister of Sri Lanka hon’ble Mr.Ranil Wickremesinghe, H E Dr Zambry Abdul Kadir, Chief Minister, State of Perak, Malaysia, Dr Amit Dar, Director strategy & Operations, Human Development and Director Education in the World Bank, Mr Zhang, ADP Vice President, Prof Ulrich from University of Michigan and ladies and gentlemen. I am delighted to be here on this occasion and wish to thank honorable Prime Minister for the warm hospitality.
I have been asked to speak on how the federal administration in India enhances the employability and competitiveness of employees and job seekers and thereby building a workforce which meets the challenging needs of the Indian economy. As you are perhaps aware, I represent Telangana State, the newest and youngest state which is just two years old as we speak. In that sense, I prefer to call ourselves “a Start-up State”.
Before I come to the nitty-gritties, let me start by pointing out that in India, while some of the subjects such as defense are in the exclusive domain of the federal government, there are subjects while are in the concurrent list i.e. which are in the domain of both federal and state governments and then, we have subjects which are exclusively in the domain of the State governments. While its ultimately the state government where the action lies, the best results are obtained when there’s synergy between the two.
Let me start with the global trends in human capital and skills eco-system. It’s not surprising that landscape is becomingever more complex and evolving ever more rapidly. Firstly, we see a paradoxical mismatch between the requirements of labour, their availability and yet the two don’t match! Approximately 25,000 new workers will continue to enter the labour market in the emerging markets every day until 2020, and more than 200 million people globally continue to be outof a job; yet, simultaneously, there is an expected shortage of some 50 million high-skilled job applicants over the coming decade. Secondly, a new wave of technological innovation, which has already started—a Fourth Industrial Revolution—will bring radical change to industries and labour markets worldwide. I am strongly of the opinion, contrary to apprehensions from certain quarters that the Digital talent platforms have the potential to empower millions of poor and marginalized workers to access the global labour market as never before. This new jobs landscape—where work is global, even if workers are not—can create opportunities for developing countries to leapfrog technological development stages by equipping their workforces to directly tap into the global labour market. Lastly, the transition from education to employment has become fraught with uncertainty around the world. Globally, nearly 35% of our human capital potential remains undeveloped, due to lack of learning or employment opportunities or both or the mismatch between the two as it is often observed that many of today’s education systems are disconnected from the skillsneeded to function in today’s labour markets.
The importance of a strong education base cannot be overstated. The Human Capital Index 2016 prepared by the World Economic Forum which takes a life-course approach to human capital and in the process evaluating 130 countries based on the levels of education, skills and employment available to people in five distinct age groups, starting from under 15 years to over 65 years, points out that only 19 nations have realized their Human Capital Potential by more than 80% while two regions i.e. South Asia and Sub Saharan Africa have yet to realize 60%. The Index covers six countries from the South Asia region and the bright spot for the region, Sri Lanka (50), benefits from strong educational enrolment and basic education completion rates as well as positive perceptions of the quality of its primary schools and education system overall (23rd on both). India does well on Quality of education system (39th), Staff training (46th) and Ease of finding skilled employees (45th) indicators, suggesting a primary avenue for improvement for the country consists in expanding access to its numerous learning and employment opportunities.
Let’s look at how the Indian scenario looks like. The share of agriculture sector in overall GDP is on decline. While the agrarian work-force too is declining, it’s slower than that of GDP’s share implying falling agrarian income. There is a strong case for and a push factor for this work force to look for new avenues. Economic development is associated with the development of the agricultural sector, followed by development in the manufacturing, and at a later stage by development in services. This so-called Three-Sector Hypothesis appears consistent with cross-country evidence.
There thus is a need to create an eco system by concentrating on sectors especially in manufacturing and services sectors which have employment potential in them and can create ripple effect through backward and forward linkages. This implies that there should be a labour force which is available and which has the required skills set. The importance of apprenticeship and industry related work experience thus become extremely crucial to have the employability of the labour. Mere numbers aren’t important, quality however is.
India has one of the youngest populations in the world, with more than 54% being below 25 years, and an estimated 62%, being in the working age is grouped between 15– 59 years. Thus, while the country has a huge advantage of demographics and the ‘adolescents-youth-bulge”, traditionally, till recently, there is a significant skill gap resulting in lack of availability of “readily-employable workforce”. With only less than 8% percent of the total workforce in India having undergone formal skill training as compared to 68% in the UK and 52% in the US, the quantum of the challenge was high. Harnessing the demographic dividend through appropriate skill development efforts would provide an opportunity to achieve inclusion and enhance productivity within the country. More than 700 million Indians are estimated to enter the working age group by 2022, of which the government has set a target to skill 500 million people by 2022.India has realized the need for a well thought out and executed strategy to provide a new set of skills through vocational training.
This being the case, lets now discuss what are the steps being initiated by the Government of India. For a long time, Skills up-gradation and training were synonymous with Industrial Training Institutes (ITIs) These ITIs have been in existence for decades now at the district level and provide the basic training skill sets in some of the more conventional trades and industries. However, the gap continues and this has made a strong case for a renewed look and effort. The main reason why it didn’t get the scale up it should have earlier was a bit of disconnect with the changing industry requirements and disjointed efforts by different agencies involved.
Thus, realizing the importance, skill development and empowering human capital has on the economy and for the overall well being, Government of India has initiated number of measures since 2015 and I would like to highlight some of the major path-breaking initiatives. I will mention few important path breaking federal institutional initiatives:
The National Skill Development Mission was officially launched by the Hon’ble Prime Minister on the occasion of World Youth Skills Day in July 2015. The Mission has been developed to create convergence across sectors and States in terms of skill training activities. Further, to achieve the vision of ‘Skilled India’, the National Skill Development Mission would not only consolidate and coordinate skilling efforts, but also expedite decision making across sectors to achieve skilling at scale with speed and standards. Mission Directorate will be supported by three other institutions: National Skill Development Agency (NSDA), National Skill Development Corporation (NSDC), and Directorate General of Training (DGT). Seven sub-missions have been proposed initially to act as building blocks for achieving overall objectives of the Mission.
Further, for the first time in 68 years of India’s independence distinct ministry i.e. Ministry for Skill Development & Entrepreneurship (MSDE) has been formed to focus on enhancing employability of the youth through skill development and to fulfill the version of creation of a ‘Skilled India’ where human resource development is in primary focus.
In order to engage private sector who is ultimately the major employer, The National Skill Development Corporation India (NSDC) was setup as a one of its kind, Public Private Partnership Company with the primary mandate of catalyzing the skills landscape in India. NSDC operates through partnerships with multiple stakeholders in catalysing and evolving the skilling ecosystem which include private sector, international engagements, federal ministries, state governments, universities and Non profit organisations. The achievement within a short span has been spectacular.
While the Government of India has provided the policy framework for Skilled India and Human capital, its ultimately the states, as I said a bit earlier who have to make them operational. More importantly, the efforts in skill up-gradation have to go hands in hands with the overall economic momentum and outlook in these states. This also explains why some states do better than others. The overall eco-system which includes policies of the state government to promote manufacturing, ease of doing business, systemic transparency, readiness of the state including ready infrastructure, housing, overall law & order situation and assured power supply, sets the stage upon which skill up-gradation, based on the specific demand sets, will be a major engine of growth and employment And I would like to take you through the efforts made in my home state.
Telangana, as I mentioned earlier is the youngest and newest state in India. It is the 12th largest state in our country and about 42% of its population is urban. We realized the importance of creating a healthy eco-system and a parallel focus on skill development. Within six months of its formation, a number of short and medium term measures were initiated which ensured availability of an assured and uninterrupted power supply. The state will be adding more than 14000 MWs of its own capacity in next three years. We have also created a land bank of 150,000 acres for exclusive usage for industries and manufacturing. An online web based interactive single form based approval process which is based entirely on the self certification was put in place wherein approvals for setting up a new manufacturing unit are granted within 15 days. It’s the RIGHT of the investor to get time bound approval through an ACT. It is thus no surprise that since the launch of our new Industrial policy called TS-IPASS in June 2015, a total of 2300 manufacturing units were given approval with an investment potential of Rs 46000 crores and with an assured confirmed direct employment potential of at least 175000. Such a spectacular progress is unheard of. What used to be achieved in a decade earlier is now made possible in less than couple of years. The rate of manufacturing and industrial growth is about 16% in the state and we plan to build up further.
A new Pharma city called the Hyderabad Pharma City is planned in an area of about 14000 acres which will be the regional hub for bulk drugs, formulations, APIs. It will house certification agencies, will have R&D facilities including a full fledged research university. Likewise, a textile park is coming up in Warangal in an area of 2000 acres which will be an all inclusive value chain fibre to fabric concept.
Further, Telangana has been a leader in IT and services sector. Some of the top names including Apple, Amazon, Facebook and Microsoft have their largest offshore offices in Hyderabad. Companies such as Novartis have more than 7000 workforce operating from Hyderabad. The list is never ending and growing. Telangana Government’s T-Hub is the most prestigious and largest incubation centre in the country for start ups in Hyderabad.
You may wonder why am I harping on the hunger of the state to grow? It’s mainly because it sets the stage. We now have to ensure that there is a seamless supply and availability of labour force with the required skill sets. And we have initiated parallel steps in this direction.
We realize that as state, we need to be the catalyst and enabler. In order to have better synergies between research, innovation and realizing their commercial potential, we are in the process of setting up RICH (Research and Innovation Circle of Hyderbad) and to encourage budding start ups, will set up a dedicated research to market funds (RMFs).
The state also is in the process of setting up Telangana State Skills Mission which will be an umbrella for all skill based activities and will coordinate the functioning to existing skill institutes. It will provide the necessary bridge between the industry and its requirements on the one hand and linking them up with various teaching institutions including introduction of new courses and mandatory internships in real life industries. The idea is to prepare the youth based on real life requirements. We aim to provide skill based employment to atleast a million people in coming 5 years.
In this regard ladies and gentlemen, I wish to highlight The Telangana Academy for Skill and Knowledge– TASK, an agency already established by the Government of Telangana for bringing synergy between Government, Academia, and Industry with an objective of enhancing skilling of youth in the State.
Initiatives from TASK focused on ‘enhancing employability quotient for youth’ and this means designing skilling initiatives creatively, those that are based on industry requirements (Technical , Personal and Organizational Skills). TASK’s direct tie up with technology partners, such as IBM, SAP, CISCO, Oracle to name a few, assist in delivering basic and advanced training and certification at subsidized costs across the state for both students and faculty.
The need of the hour is to design training programs with an integrated skilling approach as training is no longer going to be restricted to vocational ones but also micro-entrepreneurship training that can encourage budding entrepreneurs to start their ventures independently or improvise if they already have any. We are also looking at creating a robust policy for the state, enhancing industry ties and proliferation across districts, to reach out to communities in all parts of the state and skill the untapped potential that can be used to make this a reality.
Another unique feature of our skilling module is the synergy created by the induction of experienced professionals from the corporate into the government. This increases access to the high-level skills which in turn translates into innovation and growth in newer landscapes.
To conclude, I am of the opinion, we as state instruments will have to play the role of enabler in skill development and need to create mechanisms and systems where market forces of demand and supply in skills are matched. The overall eco-system in the state creates a stage for developmental take off and empowerment of human capital at every level of skill needs will provide the geometric progression in employment and growth. The present structure of competitive federalism among the states in India is extremely healthy and welcome and is ensuring that all states are geared up for next level of economic development and in the process getting rid of administrative inertia by use of technology and by providing ease of doing business.
I would end by saying “If you think imparting Skills is expensive, try ignoring it” !