Thursday, July 07, 2011

The yawning skill gap: Majority enter labour force without vocational training

The deplorable state of skills in the Indian labour force is well known. The National Sample Survey Office’s latest estimates for 2009-10 are awaited, but according to its 2004-05 estimates, a mere two per cent of Indians in the age group of 15-29 years have received formal vocational training and around eight per cent report having received non-formal vocational training.

A majority of Indian youth enter the labour force without any formal vocational training. These estimates contrast sharply with countries like Korea where as much as 96 per cent of the workforce is skilled. The labour ministry’s annual report for 2010-11 notes that around 50 Industrial Training Institutes (ITIs) were set up under the Directorate General of Employment and Training in 1950 to meet the demand for skilled workers from the manufacturing sector.

There was a spurt in the number of ITIs in the 1980s when many private institutes opened up in the southern states, but these institutes ended up catering to the growing demand from Gulf countries. Growth has been high in the last two decades, with ITIs numbering 8,642 in 2010 – more than 60 per cent of which are in the private sector – providing 1,214,000 seats.

As of November 2010, the state with the highest number of ITIs is Karnataka, with 1,318 institutes, of which 88 per cent are private. Uttar Pradesh takes second place with 986 institutes, of which 30 per cent are private. The large gap between the two states is particularly striking because the number of people in the age group of 15-19 years in Uttar Pradesh is four times that of Karnataka, calling for many more vocational institutes in Uttar Pradesh. Rajasthan, Maharashtra, Tamil Nadu and Andhra Pradesh have more than 600 institutes, while Maharashtra stands out as the only state with a predominance of government vocational training institutes.

The states in which private institutes account for more than 90 per cent of all ITIs are Orissa, Kerala, Tamil Nadu and Bihar. At the other end, states where private institutes account for a third or less of all ITIs are Chhattisgarh, Madhya Pradesh, West Bengal, Goa, Assam, Meghalaya and Jammu and Kashmir. In most north-eastern states and Union Territories, there are no private ITIs, the few that exist are government-run.

Maharashtra is also the state with the most number of seats in ITIs, followed by Andhra Pradesh, Karnataka, Uttar Pradesh and Orissa. Though smaller states do have less number of institutes, the pressure of population on the number of seats is the highest in Assam and West Bengal, where capacity is significantly lower than the population. North-eastern states and Jammu and Kashmir also have less capacity, as expected, along with Madhya Pradesh among the larger states.

Creating an employable workforce calls for many measures that need to be implemented simultaneously — for example, increasing access and quality at ITIs, education reforms and so on. Given that the disparity in the access to training across different states has social consequences, these issues need to be addressed as a priority by state governments.

Source: Business Standard, July 7, 2011
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