July 2012 India-China Chronicle |43|

system. Another report by Nasscom and McKinsey predicts that India will confront a huge shortage of skilled workers in the next decade, particu-larly in the BPO industry. According to the Nasscom-McKinsey report, only 25 percent of our engineering gradu-ates, 15 percent of our finance and ac-counting professionals and 10 percent of professionals with any kind of de-grees, in India, are suitable for working in multinational companies. A recent study conducted by the Confederation of Indian Industry (CII) has revealed that human resource is the biggest challenge faced by India especially at the managerial, production and mar-keting levels due to the widening de-mand-supply gap. Corporate India is creating around 10 lakh new jobs each year. If that is the demand over the next few years for job-ready graduates, one can imagine the humungous demand at middle and lower levels.

In the current policy priorities, including the proposed approach in the 12th Five Year Plan, while levels 1 (minimally educated), 2 (vocational) and 4 (highly skilled) are receiving the required attention but level 3 re-mains hugely neglected. Importantly, level 3, which include graduates and post-graduates across all professional/ academic disciplines, are adequately

Dr Shweta Sharma is UGC Post-doctoral Fellow. Dr Navneet Sharma is a policy researcher. Views are personal.

Comments are welcome at: shwetansharma@gmail.com

regulated by 17 regulatory authori-ties. However, the regulation has not yielded evenly high standards across the country, which is aptly reflected by various reports in terms of lack of em-ployability of graduates as mentioned above. In view of the macro-economic challenges, presence of islands of excel-lence along with poorly performing institutions suggests that the policy challenge is to generally improve the standards of skill creation in 634 uni-versities and 33,023 colleges of India (as per the latest statistics released by UGC: “Higher Education in India at a Glance, 2012”). It is worth clarify-ing that the case here is about striking a balance in the policy focus, and not neglecting the current policy focus on the minimally educated, vocational skills and highly skilled. Attention to all the four levels of skill chain is akin to coordination in an orchestra to cre-ate symphony.

The second leg of the policy priori-ties relates with how to create skills at the third level of the skill pyramid. The Government of India has increased the number of institutions of national importance such as the IITs, IIMs, etc, which are perceived as islands of excel-lence, as a policy response. While in-creasing the number of IITs and IIMs is a welcome step, considering it a suffi-

cient step is grossly misplaced. In order to improve the general skill creation standards at college/ university level, a major initiative is needed in terms of (a) defining the target skills and embedding them in the curricula of a course, and (b) equipping the teachers in 634 universities and the 33,023 col-leges to deliver the target skills.

Primary research by the authors has revealed that most tertiary educational institutions have no express idea of the skills to be generated in a univer-sity level course, which corroborates with the above findings where one sees MBAs without the required manage-ment skills and engineers without the desired technical skills. Graduates are being produced with standard academ-ic curricula with little or no regard to the skills desired by a market. This situ-ation results in an additional burden ei-ther on the individual or the employer to become job-ready.

Once the target skills are articu-lated, a policy initiative is needed to enable university/ college teachers to achieve the target of creating skills, which are demanded by a market. Here arises the question of training teach-ers in skill creation methodologies and pedagogies. In this context, the institu-tions of national importance such as the IITs and IIMs have a greater role to play as “catalysts” – i.e. producing good teachers who can create skills in their respective institutions. Graduates produced by institutions of national importance are nowhere close to the required numbers. Therefore, asking them to be catalysts will deliver much better outcomes than merely allowing them to produce a few hundred gradu-ates each year. The urgency of right-focusing the skill policy is that it needs to be realized and implemented before the demographic dividend turns into a youth bulge.

|42| India-China Chronicle July 2012

INFOCUS | INDIA-CHINA | SKILLS

Shweta Sharma and Navneet Sharma

Amongst the sources of competi-tiveness, skills have now assumed primary importance. The pri-

macy of skills is embedded in a call for policy shift to achieve not just econom-ic growth but attain socio-economic objectives through economic growth. Skill creation can be divided into four levels: minimally educated, vocational-ly skilled, college educated and highly skilled. It is important to recognize that, (a) all the four levels have differ-ent levels of populations in each strata and contributions to the economy, and (b) all the four together create a skill-ecosystem, which supports develop-ment and growth of a sector.

Right-focusing the skill policy in india

The urgency of focusing the skill policy is that it needs to be realized and implemented before the demographic dividend turns into a youth bulge.

Battle of the Bulge

The magnitude of the challenge can be gauged from the fact that India will need to have 500 million skilled per-sons by 2020 and the total number will comprise of the following components of the skill pyramid: level one – 50 per-cent (minimally educated); level two – 25 percent (vocationally skilled); level three – 20 percent (college educated) and level four – 5 percent (highly skilled) [As per a report by IMaCS].

During the last five years, there has been sufficient debate and action on the need for skill building, however, its future direction requires some fine-tuning.

A major policy response to ad-dress skill issues has been the creation of a three-tier institutional structure consisting of the Prime Minister’s National Council on Skill Develop-

ment, National Skill Development Coordination Board (NCDCB) and National Skill Development Corpo-ration (NSDC) in 2008. The Prime Minister’s council has set a target to create 500 million skilled people by 2022 through skill systems. NSDC has already partnered with a large number of sectoral skill councils to encourage skill development on PPP basis.

The policy response so far has at-tended the level 2 to a good extent, but there remain two principal aspects, which require urgent and careful con-sideration in order to achieve the over-all policy objectives.

Let us first highlight, through some statistics, an indicative status of job-readiness of college graduates (level 3). As per Knowledge Commission of India & Nasscom, only 10% of gradu-ates are employable. Similar survey indicates that about 20 to 23 percent engineering graduates and MBAs are fit for jobs as per the present education