ISSN (Print) : 0974-6846

Indian Journal of Science and Technology, Vol 9(48), DOI: 10.17485/ijst/2016/v9i48/107324, December 2016 ISSN (Online) : 0974-5645

Skill Development in India: Challenges and

Opportunities
Lavina Sharma1* and Asha Nagendra2
1
Symbiosis Institute of Business Management, Symbiosis International University, Bengaluru - 560 100, Karnataka,
India; lavina.sharma@sibm.edu.in
2
Symbiosis Institute of Management Studies, Symbiosis International University, Pune - 411 020, Maharashtra,
India; asha.nagendra@sims.edu

Abstract
Objectives: The Indian government’s ‘Make in India’ campaign and the accelerated growth in the economy has highlighted
the demand for skilled manpower in the country. The objective of this article to understand the current state of vocational
education and training and review the vocational training models of the emerging economies. Methods/Statistic Analysis:
The Skill development model of India is studied in detailed with reference to the ‘Make In India’ campaign. The vocational
training model of the China and Brazil is also reviewed for the study as they are a part of the BRICS countries and also the
emerging economies of the world. Singapore’s vocational education model is also studied to gain additional insights on
the skill development initiatives and policies. Findings: The “demographic dividend” explains for India being the youngest
workforce country in the world. The country will have the lowest median age much below that of China and Organisation for
Economic Co-operation and Development (OECD) Countries. It means that India can be the largest provider of workforce
to the world. But still, India has difficulty to fill up jobs due to a shortage of applicants with the right skills and knowledge.
It also brings out the difficulty the country faces with matching the jobs to the skills available. India is still behind countries
like China and Singapore in imparting skills. The paper aids in analyzing the current skill gaps in the country and the areas
where there is a huge scope of supply of skilled workforce. It aims to identify the challenges faced in development of skills
in the country and highlighting the employment opportunities arising in the different sectors with emphasis on the Make
in India campaign. Conclusion/Improvements: There is a huge scope of generating skilled workforce in the country and
utilize the ‘demographic dividend’. The branding activities and active involvement of Public Private Partnership ensure a
better supply of skilled workforce.

Keywords: Challenges, India, Skill development, Vocational and Technical Education

1. Introduction Most of the economies in the world are ageing fast,

their contributions adding to the global workforce will be
The Indian economy grew at an advanced rate of 7.6 per- reduced to a great extent While, India will be an excep-
cent year in the quarter January – March 2016, thereby tion to it, with a major dominance in the global workforce
making it a fastest economy to grow. India’s demographic in the years to come. India will be enjoying dominance
profile is helping the country to aim for an accelerated in the global workforce by being the biggest provider of
economic growth. India is expecting a huge growth in the skilled labour to the world. Boston Consulting Group,
labour market by having 64.8 percent of the population in its study discussed the workforce demand and sup-
as the working population. It gives a lot of benefit to the ply challenges faced in the world. It stated that by 2020
country in the labour market. the world may expect a shortage of 47 million people.

*Author for correspondence

 Skill Development in India: Challenges and Opportunities

India, on the other hand will have a surplus of 56 mil- of skilled workforce. It aimed at establishing and lying
lion working people. India will be able to gain advantage down of consistent and common standards of teaching
of the increased working population if they able to equip and collaborating the efforts of the organization aiming at
its workforce with the appropriate skills. In this respect, development of skills2. It also focuses on bringing all the
skills development emerges as one of the most critical other ministries to come together and function in a uni-
aspect of India’s economic policies. fied manner towards skill development. It lays down the
objectives and the expected outcomes and also ascertains
the different institutions that will ensure that the expected
2. Objectives of the Study outcomes are achieved. The set-up of Skills Development
The skill development model forms the basis of the study. with major parties involved in appropriately designed. It
The objectives of the study are mentioned below: includes a lot of parties involved in the skill development
• To study the present system of regulation of in the country (Refer Figure 4). The Ministry works in
the Vocational Education, Training and Skill close collaboration with the National Skill Development
Development sector in India Corporation (NSDC). It helps training institutes map the
• To review the system adopted by countries like skill sets, involves in the market research and design the
China, Brazil and Singapore relevant curriculum. It aims at bridging the gap between
• To know the challenges with respect to the skill the skills demand and supply by boosting the skill devel-
development in India opment initiatives2.
• To assess the opportunities available for skill In India, the skill acquisition is by through two chan-
development in India nels which include both formal and informal methods.
Both the Public and Private Sector aims at imparting the
formal training. In addition to this, the government is also
3. Review of Literature looking at the Public and Private Partnership known as
In order to understand the Skill Development system, the the PPP model. The Industrial Training Institutes known
Skill Development Model of India has been studied. The as ITIs are run by government and is a major channel of
skill development model of China, Brazil and Singapore is gaining Vocational training in the country. Apart from
also studied in order to gain an international perspective this, there are privately run Industrial Training Centres
to skill development. China and Brazil have been chosen known as ITCs and vocational schools. In India, the
for the study as they are a part of BRICS countries and are Labour Laws also ensures that the students going for tech-
the emerging economies of the world like India. Singapore nical education are trained through the Apprenticeship
has been ranked as the 2nd highly skilled country of the training provided by the Industry. Though there is a lot of
world1 in the year 2015-16. So for understanding the participation from the private sector on skill development
model of a highly skilled country, Singapore’s Vocational but the public sector dominates the skill development
and Technical Education model is being studied. programs in the country. The informal channel is more
unstructured and can be imparted through working on
3.1 Skill Development System in India the job or through experiential learning.
The government of India designed a policy framework
India experiences a huge advantage by having a young which aimed at developing the skills in the country. The
workforce, which means it high scope of providing skill development eco system includes the Apprentices
manpower to the labour market. After assessing the Act, 1961, a formal way of skills acquisition. It also
high demand for the skilled workforce in the world, the includes, The National Skill Policy, which lays down the
Ministry of Skill Development and Entrepreneurship was policies and procedures for skill enhancement and the
formed. The ministry was announced in June 2014. The National Skills Qualification Framework (NSQF)3. The
Prime Minister of India, Shri Narendra Modi felt the need Apprentice Act, 1961 ensures that there is participation
to focus on skill development considering the changes from the Industry in the skill development of the students
happening in the labour market and hence the ministry undergoing a formal technical education. The Industry
was established. It focused on working in close collabo- professionals are well equipped to train the students on
ration with other ministries to meet the huge demand skill development. The Act aims at making it mandatory

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 Lavina Sharma and Asha Nagendra

for establishments in the private and the public sector completely heterogeneous in nature. The skill enlargement
to train the students. The Industry has to provide on in India is classified into two categories. They are Skill
the job training to the students hence giving them a real Education and Skill based Vocational Training. Figure
world exposure to skills and processes and making them 1 explains the varied structure of Skill Development in
employable in the labour market. India.
The National Policy on Skill Development was framed The Ministry of Human Resource Development gov-
in 2009 with an aim to strengthen the skill develop- erns the Educational and Vocational Training in India. It
ment initiatives of the country. It is a Public Private governs the elementary, secondary and higher education
Partnership model which falls under the Ministry of Skill in the country. The Universities and Higher education
Development and Entrepreneurship. It was established in centres focuses on the college education. The examples of
order to promote skill development by creating large and it are disciplines like Arts, Commerce and Science etc3.
exceptional quality vocational institution with the appro- The Technical education is provided through the engi-
priate training infrastructure. India has a lot of aspirants neering colleges and the polytechnic institutions. The
but it doesn’t have the required infrastructure to meet the functioning of both the education Universities and col-
requirements of vocational education and training and leges is regulated by the University Grants Commission
hence the government involved more of such partnership (UGC). They grant funds, ascertain and ensure com-
to ensure the model is successful in imparting the voca- mon standards are established for teaching, learning and
tional training. evaluation in the Universities. The technical institutes in
The National Skills Qualifications Framework (NSQF) India are regulated by the All India Council for Technical
was enacted on 27th December 2013. The framework in Education (AICTE)3.
built on the latest concept of competencies which analyses
the knowledge, skills and aptitude needed at each quali-
fication. The levels are graded from one to ten and are
defined in terms of learning outcomes for each level. It is
regardless of whether the skills are possessed through for-
mal, informal and non-formal learning. The framework is
based on competency modelling, which is considered to
be highly effective method of mapping the skills needed
for a particular role3.

Figure 1. India’s Educational and Skill Development

Structure.
Source: National Skills Development Corporation3

3.2.1 Public-Private Partnerships (PPP) model

India’s Technical education has suffered tremendously
because of the lack of infrastructure and the industry rele-
vant curriculum program. With a view, to ensure that the
Figure 4. Skill Development Eco-system in India. country has more employable workforce, the government
Source: FCCI KPMG Skilling India Report3 in the early 2000s, decided to launch the concept of public-
private partnership. The government in the year 2005 – 06
3.2 Skill Development Model in India decided to upgrade 100 ITIs with the help of the internal
India has a large, diverse and highly complex model of resources available. The World Bank was also roped in
skill development. India has a huge population which is to upgrade additional 400 ITIs. The remaining ITIs were

Vol 9 (48) | December 2016 | www.indjst.org Indian Journal of Science and Technology 3
 Skill Development in India: Challenges and Opportunities

focused to be developed through the PPP model. The also train themselves on vocational training through the
Skill Development Initiative (SDI) under the Ministry of three year participation in the vocational scheme edu-
Skill Development and Entrepreneurship focused on the cation (Refer Figure 2). The Industry input is ensured
increasing the number of Public Private Partnerships4. through the participation in the entire TVET system6.
The Scheme is a 5 years project scheme aiming at train- China being known for its manufacturing excellence
ing of one million persons. The scheme aims at providing in the world has to have a skilled workforce readily avail-
people with the skills to perform the job effectively. It able. In order to meet the increasing demand for skilled
not only focused on the existing employees and students, workforce in the country, they have a robust skill develop-
but also focused on providing skills to school leavers and ment model that has a support from the government too.
young graduates. The PPP model looked promising by China is governed by the Vocational Education Law of
generating a pool of skilled workforce thus reducing the 1996 which formulates the legal structure for the effective
supply and demand gap2. It aims to design and develop and proper functioning of the technical education and
syllabi for various levels and trades, development of rel- training system in the country8. It explains the functions
evant and interactive instructional material, training the and responsibilities of the Ministry of Human Resources
trainers, the staff and faculty and ensuring a collaborative and Social Security and Ministry of Education in the
environment for the training. vocational training. The law also discusses the roles and
responsibilities of the local government, industry/private
3.3 China’s Technical and Vocational participation and the vocational training institutes in skill
Education and Training System (TVET) development in the country. It reflects that the country is
highly focused on skill development and makes it com-
China has been a country which has a reasonably good
pulsory from the school level itself. The implementation
number of trained manpower. The TVET of China is a
of the law is dealt with utmost dedication so as to ensure
very broad and effective method of providing technical
the implementation of skill development in the country.
and vocational training to the people. The TVET of China
In China, the enterprises also support the skill devel-
is classified into two institutional setting. One of it focuses
opment to a great extent. The occupational standards are
on education in schools while the other aims at providing
clearly mentioned and there is a strong integration with
vocational training. The school education falls under the
the education and economy. The Law makes it obligatory
Ministry of Education (MOE) and whereas the vocational
for the industries to provide for compulsory skill training
training falls under the purview of Ministry of Human
and employment.
Resources and Social Security (MOHRSS)5. The curricu-
China ensures that there is optimum participation
lum of vocational training of the school is designed in line
from the Industry in vocational education and training.
with the theoretical concepts and knowledge of the dif-
The Vocational Education Law, 1996 ensured that it hap-
ferent theoretical frameworks for a particular trade. The
pens. Below are the Articles from the law which reflects
other section that falls under the MOHRSS focuses on
the Country’s focus on skill development through the
post-school and pre-employment training of people. Its
Industry participation9.
major emphasis is on practical and experiential learning “Article 20: Enterprises shall, in accordance with their
through workplace training initiatives and also training actual situation, provide vocational education in a planned
and re-training of school dropouts and unemployed peo- way for their staff, workers and persons to be employed.
ple. The vocational education forms an integral part of the Enterprises may jointly run or run on their own voca-
educational programs of China which mandates through tional schools and vocational training institutions; they
Education Law 1986 nine year of compulsory education may also entrust vocational schools or vocational training
including three year of vocational training6. The institu- institutions with the vocational education of their staff,
tional setting of vocational education broadly provides workers and persons to be employed by them9.
for pre-employment, post-school, and on-the-job-prac- Article 29: If any enterprise fails to conduct vocational
tical training besides training for school drop outs and education in accordance with Article 20 of this Law, the
a massive scale of vocational training for different levels local people’s government at the county level or above
of employees through Technical/Skilled Worker Schools. shall order it to make correction; if the enterprise refuses
Thus, even senior secondary vocational school students to make corrections, the vocational educational funds

4 Vol 9 (48) | December 2016 | www.indjst.org Indian Journal of Science and Technology
 Lavina Sharma and Asha Nagendra

that the enterprise should bear may be collected, and such sarily technical high school. Technological courses tend
funds shall be used for vocational education in the local- to last three years.
ity.”9 Brazil is also focused on creating skills at the school
level. They offer programme especially the Technical ones
which can be offered to the students from the same insti-
tute. Due to which, the number of students enrolling for
the program are high11. The Vocational Training Program
offered by them PRONATEC is focused to promote social
and productive inclusion. It has a heavy social policy
component, clearly stating as its goal “to promote training
opportunities to teenagers, workers and the beneficiaries
of the cash transfer programs.”10

3.5 Singapore Vocational and Technical

Education (VTE) model
Singapore lays a lot of importance to the skill develop-
ment and it invests heavily in the Vocational training and
Technical Education. The government supports the VTE
Figure 2. China’s Technical and Vocational Education and
model of the country. Singapore is a preferred destination
Training System (TVET).
in terms of the skilled workforce as compared to India.
Source: TVET UNESCO Images7
The model is similar to India and focuses on the robust-
ness in the technical training provided to the aspirants. It
3.4 Brazil Vocational Educational Training also lays emphasis on industry relevant curriculum and
Model ensures on making it a cost effective model so that more
The current structure of VET is divided into three dif- aspirants can opt for the technical education. There are
ferent levels namely Continued Formation courses (FIC various schemes like the traineeship, approved training
courses), Technical Courses and Technological courses. centres and certified on-the-job training centres.
FIC Courses Initial or Continued Formation courses (FIC The government also wanted to improve the visibil-
courses) are the ones with the broadest targeted popula- ity of such programs and hence participated in different
tion. Anyone can enroll in this type of program. There advertising campaigns like “using the hand,” “Top of the
are no requirements regarding educational degree or age. Trade” competitions telecasted on the television, and
Their goal is to provide an initial qualification to those “Apprenticeship of the Year” award. The major advantage
whose level of educational achievement is low or have no of the TVET model is the curriculum which involved
practical training or experience. industry professionals in the design and hence ensured
Technical Courses provide professional training to that the relevant skills are transferred to workforce12.
students enrolled in secondary school and secondary
The VTE has centres of excellence and it collaborates
school graduates. These courses operate in three modali-
with other agencies that help in the exchange of training
ties: I. Integrated - Offered to students who want to attend
resources, expertise of members and technological ini-
simultaneously Vocational and General Education courses
tiatives focusing on skill development. The government
at the same institution. II. Concomitant - Offered to those
through the VTE model funds the training of not only
students enrolled in a General Sequential - Offered only
the school graduates but places equal importance on the
to those who completed secondary school10.
drop outs so that the people continue to train themselves.
Technological courses are equivalent to tertiary level
courses. These programs are only available to secondary
school graduates and grant a diploma that is equivalent 4. India’s Current Skill Analysis
to a university degree. Therefore, as mentioned before,
in order to enroll in a technological course, students are The current data suggest that only 2.3% of the workforce
required to have completed high school, but not neces- in India has undergone formal skill training as compared

Vol 9 (48) | December 2016 | www.indjst.org Indian Journal of Science and Technology 5
 Skill Development in India: Challenges and Opportunities

to 68% in the UK, 75% in Germany, 52% in USA, 80% in

Japan and 96% in South Korea13. The workforce in India
has little or no job skills that make them largely unem-
ployable. It is an alarming signal for India which has the
youngest population in the world. There is a lot of scope
for India to provide its workforce with appropriate skills.
As per the 12th Plan document of the Planning
Commission, India’s labour population is not educated
enough. The people who completed educational qualifi-
cation up to secondary level are 85 percent of the labour
workforce. Approximately 55 percent have completed Figure 3. Skill Gap 202215.
education level up to the primary level and a small per-
centage of 2 percent have undergone a formal vocational Table 1. Incremental Human Resource Requirements
training14. Efforts are being made to ensure more students across Sectors by 202018
enrollments in the higher education and vocational train- Source: Ministry of Skill Development and Entrepreneurship
ing. There are initiatives like Make In India, Digital India
Segment Employment base in
and programs focusing on start-ups and funding pro- million
grams laid on Skilled India.
2013 2017 2022
The current skill landscape of India is not very posi-
tive. According to the India Skills Report 2015, it was Building, construction and 45.42 59.40 76.55
real Estate
established that India lacks on the development of skills.
Of all the students applying for roles in the labour mar- Automobile and auto 10.98 12.18 14.88
component
ket, a mere 1/3rd of the number had the appropriate skills
Banking, Financial Services 2.55 3.20 4.21
to match the requirement of the employers15. Though we
Insurance
have a sufficient manpower but all are not skilled enough
Textile and Clothing 15.23 18.06 21.54
to get a job. The fresh employments opportunities are
getting created in the field of core engineering, retail, hos- Pharmaceuticals 1.86 2.60 3.58
pitality, ecommerce and banking but there is shortfall of Electronics – IT hardware 4.33 6.24 8.94
trained people in the country to fill the positions (Refer Retail Sector 38.6 45.11 55.95
Table 1). Looking at the labour market dynamics, the IT and ITES 2.96 3.86 5.24
government has started initiatives to fight this major dif- Food Processing 1.75 2.65 4.40
ficulty. In fact, the Government has given utmost priority Beauty and wellness 4.21 14.27 10.06
to skill development and it will continue to be a vital mat- Electronic and IT Hardware 4.33 8.94 4.61
ter for 10 years15.
Transportation and Logistics 16.74 28.4 11.66
The Skills Gap as per the Figure 3 mentions the
Healthcare 3.59 7.39 3.8
expected shortage in the industries in 2022. There will
Handlooms and Handicrafts 11.65 17.79 6.14
be a considerable growth in the Infrastructure sector
Telecommunication 2.08 4.16 2.08
followed by the Auto & Auto Components14. In order to
Pharma and Lifesciences 1.86 3.58 1.72
focus on the Make in India campaign considerable efforts
are needed to impart skills in the country. Education / Skill development 13.02 17.31 4.29
Leather and Leather goods 3.09 6.81 3.72
Security 7 11.83 4.83
5. Challenges Furniture and Furnishing 4.11 11,29 7.18
India is facing a lot of challenges keeping in view the Tourism, Hospitality and 6.96 13.44 6.48
current infrastructure and the policy framework. The Travel
challenges faced in skill development have been discussed Gems and Jewellery 4.64 8.23 3.59
below: Domestic Help 6 10.88 4.88

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 Lavina Sharma and Asha Nagendra

5.1 Insufficient Scale and Restricted 5.4 Scalability

Capability Any model to be successful needs a lot of support from
The current infrastructure facility available in the edu- stakeholders too. Since there is very limited buy-in from
cational institutions is inadequate considering the huge the corporate sector the progress of such initiatives is
demand of labour. There aren’t many trained and highly reduced. Skill development had not been a priority of the
skilled trainers available. It reflects the inappropriate and government earlier and hence this area has always been
insufficient infrastructure not only in big cities but also ignored16. Since the model requires high capital invest-
in small towns and villages. The faculty needs to be moti- ments, the people are not very willing to support such
vated and skilled to take up higher responsibilities. The a model. The challenges associated with unavailability
training infrastructure too needs to be made adequate of infrastructure, slow processing of bank loans seldom
keeping in mind the number of aspirants to be skilled. demoralizes the budding entrepreneurs to come up
Another crucial aspect in skill development is the ‘Train with their. In rural region, it becomes more challenging
the Trainers’16. The knowledge and experience brought because the people aren’t aware of the credit facility and
in by the faculty ensures that the student has picked up the different schemes supported by the government and
the appropriate skills and has had a phenomenal learning any other financial bodies. The urban areas face issues like
experience. The trainer should be able to assess the needs high operational cost which discourages such entrepre-
of the students considering the labour market situation. It neurs to come forward.
also requires that there is an ideal mix of both theoretical
as well as practical learning experience. Hence, training of 5.5 Skills Mismatch
the trainer has become a major challenge. There is a lot of issue related to the skills needed by the
industry and the skills imparted through the educational
5.2 Mobilization and training institute. There is a lack of industry-faculty
The enrollment of the students for vocational education interaction because of which the skill set doesn’t suit the
and training has become an extremely challenging task. employer. Though the people may be skilled but they are
The outlook of the people associated with the skill devel- not employable17. It becomes extremely important that
opment is still very traditional. The students would move the industry professionals are also included during the
on to managerial roles as the technical trades positions design of the curriculum.
are associated with low salaries and lack of recognition.
There are students who are not able to pay for the fee 5.6 No focus on Non-Technical Skills
and may not be aware of the schemes run by the govern- The Vocational Training Centres in India is focusing on
ment which also leads to a low mobility towards such developing technical skills only whereas the employers
programs. Skilling has always been branded as a blue col- feel the need of having Behavioral Skills also. According
lar job, which is further associated with low pay scales, to the India Hiring Intent Survey, the employers also
limited growth and less challenging roles. Like Singapore, focus on Skills like Domain Expertise, Communication,
our government needs to focus a lot on the branding a culturally fit person, values on Honesty and Integrity,
strategies for skill development which may ensure a high Adaptability, focused on Result, Interpersonal skill and
mobility towards such programs. Learning attitude. These skills are not covered as an inte-
gral part of the skill development. This is a major challenge
5.3 Employer’s buy-in as it results to a lot of unemployed skilled workforce.
The industry doesn’t distinguish whether the person has
acquired the skills through on the job training or has gone 6. Conclusion
through a formal training. Many companies make their
own skill centres through which they develop the people. Skill development is the most important aspect for the
Though the Skill Development also focuses on the Public development of the country. It needs a coordinated effort
Private Partnership Model but it needs a lot of effort from from all the agencies, stakeholders and the students to
both the players in development of skills. make it a successful program. The policies, if are able

Vol 9 (48) | December 2016 | www.indjst.org Indian Journal of Science and Technology 7
 Skill Development in India: Challenges and Opportunities

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8 Vol 9 (48) | December 2016 | www.indjst.org Indian Journal of Science and Technology