As India rapidly transforms into one of the fastest-growing economies, skill development and job creation have emerged as crucial components to ensure sustainable growth. India should focus on skilling or upskilling 50% of the people who are on the working age group of 15-65 years by 2030. 64.2% of the population in the working age group and it is expected to marginally increase to 65.1% by 2030. According to recent surveys, over 100 million new workers will enter the labour market, necessitating skill training, while nearly 300 million existing workers will require additional skill development. This demand underscores the critical need for skill training to support industrial and economic growth in the country. Globally, an estimated 734 million jobs will be required between 2024 and 2030 to accommodate demographic shifts.
The recent announcement by Finance Minister Smt. Nirmala Sitharaman in the budget speech regarding skill development and employability programs promises significant benefits for India's economy. As the nation aims to become the world's third-largest economy and a global skilling capital, these initiatives are timely and transformative. A key component of the Union Budget 2024 is a new centrally sponsored scheme under the Rs 2 trillion package. This scheme focuses on bridging the gap between the skill-development ecosystem and employment opportunities.
Over the next five years, the program aims to provide year-long paid internships to 10 million youth in India’s top 500 companies. Interns will gain 12 months of exposure to real-life business environments, varied professions, and employment opportunities, receiving an internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000. Companies will cover the training cost and 10% of the internship cost from their CSR funds. This will strengthen the connection between industry and academia. The scheme, with an outlay of Rs 60,000 crore, will skill over 2 million youth in collaboration with state governments and the industry, emphasizing outcome and quality of skilling with industry-aligned course content and design. Additionally, 100,000 students will receive financial support annually for loans up to Rs 10 lakh for higher education in domestic institutions.
Upgrading Industrial Training Institutes (ITIs)
The upgrading of Industrial Training Institutes (ITIs) will cost Rs 30,000 crore over the next five years. These ITIs will be revamped under a hub-and-spoke arrangement, with redesigned and reviewed courses to meet current industry needs. The loan scheme, facilitating loans up to Rs 7.5 lakh for each student, will benefit 25,000 students annually. This initiative includes a government-promoted fund guarantee. Additionally, there will be financial support for loans up to Rs 10 lakh for higher education in domestic institutions for students not eligible for other government benefits. E-vouchers will be given directly to 100,000 students annually, providing an interest subvention of 3% of the loan amount.
These initiatives will enable young people from villages and impoverished backgrounds to work in top companies, opening new doors of possibility. The upgraded skilling program, including revised model skill loans and financial support for higher education through e-vouchers, is expected to enhance skill development tailored to market demands. Integrating apprenticeships could further strengthen the link between education and employment by offering structured, hands-on training opportunities. These efforts mark a significant step towards building a competent and capable workforce, positioning India as a global leader in skill development.
Addressing Educational Challenges
India's education system, the third-largest globally, enrols over 70 million students. Despite its scale, it faces significant challenges in terms of employability and global ranking. The current system is heavily academic, with insufficient focus on skill-based or vocational education. Outdated curricula and a lack of soft skills training further exacerbate the employability gap. Efforts are being made to align education with practical knowledge and make it more accessible. Institutions like IITs, IIMs, and NITs have achieved global recognition, yet there is a pressing need to bridge the gap between the quantity of graduates and their employability. Enhancing the curriculum to include practical knowledge, industrial visits, workshops, and seminars is essential.
Vocational Education and Skill Development
A survey indicates that 64% of educated Indian students face unemployment due to a lack of essential skills. The outdated curriculum and insufficient focus on soft skills, such as interpersonal skills, public speaking, and problem-solving, contribute significantly to this issue. A survey by a leading daily revealed that 66% of engineering graduates do not require their engineering qualifications for their current jobs, highlighting a significant misalignment between education and employment needs. The National Education Policy 2020 emphasizes integrating vocational education with mainstream education. The policy aims to expose students to vocational training from an early age, ensuring that 50% of learners have vocational education exposure by 2030. This focus on skill development is critical as new jobs emerge requiring new skills.
Future Demands and Educational Reforms
The most demanding jobs in the future include fields like AI, machine learning, 3D printing, data analytics, biotechnology, nanotechnology, digital marketing, neuroscience, VFX & animation, electric mobility, pharmaceuticals, supply chain & logistics, agro-processing, and marine products.
To shape a better future, India requires an education system that prioritizes science, technology, research, training, and skill development. Collaboration among individuals, institutions, and industries is vital to ensure the curriculum meets industry needs. By aligning education with market demands and enhancing skill development, India can anticipate and realize sustainable economic growth through meaningful employment opportunities for all.