More Less
September 30, 2019

How can India's rapidly growing labor force be upskilled?

How can India's rapidly growing labor force be upskilled?

Over the next four years, 70 million people are predicted to enter India’s labor force. Of these, 59 million will be less than 30 years old. According to research by the Indian Economic Summit, it is therefore vital to implement new strategies to reskill and upskill the current workforce. These strategies focus on three areas.

The first is encouraging involvement from the private sector. Private firms’ often lack incentive to develop employee skills because there is a risk they will leave and join another firm. However, in 2008, the Indian government established a public-private partnership, the National Skill Development Corporation (NSDC) to provide long-term finance to organisations to provide vocational training. The NSDC also works with the Indian Ministry of Skill Development and Entrepreneurship (MSDE) to implement training programmes.

Furthermore, a Recognition of Prior Learning (RPL) scheme enables formal recognition of the skills held by informal workers. Indraneel Dasgupta and Saibal Kar write that: “Over 90% of the labor force [in India] continues to be in the informal sector, with no job security or protective labor legislation,” in their article The labor market in India since the 1990s. Indeed, a household survey carried out by the Centre of Monitoring Indian Economy (CMIE) finds that there are more than 390 million people with skills acquired informally. This demonstrates the wide scale potential of RPL interventions.

Secondly, ageing populations in several developed countries present opportunities for skilled workers to migrate. The India International Skill Centre (IISC) is working to help potential emigrants’ upskill, learn new languages and prepare for integration into their host country with pre-departure orientation. For example, India is already working with Japan to implement Japan’s Technical Intern Training Programme (TITP) that provides on-the-job-training and internships for 3-5 years.

Thirdly, there need to be efforts to increase female labor force participation. Currently, only 91.6 million of a labor force of 395.2 million are women. IZA World of Labor author Sher Verick stresses the importance of female labor force participation as “an important driver (and outcome) of growth and development.”  Initiatives include providing accommodation for women trainees, skills programmes, local workshops to provide social support, preparation for the gig economy and other flexible work models. So far, 40% of trainees on NSDC’s paid courses are women.

Dagupta and Kar emphasise that in India: “Employment continues to be overwhelmingly informal in nature, without security, income stability or the benefit of protective legislation. Major reforms are needed in a host of areas before India’s most pressing labor-related issues can be addressed.”

Read more articles about country-specific labor markets.