Government's New Skilling Push Must Overcome Past Pitfalls

Budget 2024 emphasises employment and skill development over the next five years, with the Finance Minister announcing a new centrally sponsored scheme to skill 20 lakh youth within this period.

The initiative includes upgrading 1,000 industrial training institutes (ITIs), aligning course content with industry skill requirements, and introducing new courses to meet emerging demands.

Such an initiative is necessary because India continues to face a shortage of skilled labour force across sectors amid a high job demand from millions of youths.

In recent years, the government has made efforts to improve the vocational and skill development landscape across essential sectors — primarily through schools, ITIs, and also private training institutes executing government programmes.

Notably, the Narendra Modi administration established the Ministry of Skill Development and Entrepreneurship in 2014.

The government then launched the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) as part of the Skill India initiative.

However, over the years, the initiative has consistently fallen short of expectations, and its effectiveness has been limited. In fact, in 2017, the government had to abandon its goal of training 500 million people in new skills by 2022 and redraw its strategy.

Many trained candidates under PMKVY struggled to secure jobs across multiple phases of the scheme, amid reports of declining training quality.

As trained candidates struggled, so did Rajiv Pratap Rudy, who was replaced as the Minster of Skill Development and Entrepreneurship in 2017.

As per reports, Rudy stated that while the mission had limitations, his ministry focused not on providing jobs but on offering training to make people employable

The key issues identified previously include a high dropout rate, a significant mismatch between trained skills and market demand, and a focus on creating a skilled workforce despite limited opportunities available.

According to a report published by the Ministry, in 2015, around 19.85 lakh candidates were trained under the PMKVY scheme, but only 13.23 per cent secured jobs post-training.

In 2016, about 52 lakh candidates completed the training, with just 24 per cent obtaining employment afterwards.

The programme’s failure also came from collaborations with too many training partners without the high degree of due diligence necessary to assess their competencies.

Besides partnering with multiple ministries, Skill India involved non-governmental organisations (NGOs) and private stakeholders to achieve mass skilling under a public-private partnership model. Partner agencies were entitled to 75 per cent of the government subsidy on the sanctioned cost of Rs 10,000 per candidate.

However, as reported by India Today, these partnerships led to the issue of ghost beneficiaries — individuals listed as attending training that never occurred, pointing towards additional irregularities in the reported numbers of the skilled workforce.

The Ministry then started closely monitoring private skill training providers, operating on a franchise model.

However, as per Swarajya’s interactions with several government ITIs earlier this year, the issue persisted. The institutes highlighted the problem of numerous ghost beneficiaries enrolled for specific trades by several private agencies.

The latest budget announcement on skilling addresses previous shortcomings. The government must ensure it avoids repeating past mistakes.

It is worth noting, however, that the recent announcement targets only 20 lakh individuals over five years. This is significantly lower than the ambitious targets set nearly a decade ago and may signal amends.

Further, by strengthening ITIs, there is potential to eliminate the previous irregularities that emerged through private agencies (as the announcement includes upgrading 1,000 ITIs).

With lessons from the past, new approaches, and the fast-evolving demands of industrial growth, the government will have its work cut out in fulfilling its promise for skill development.