Mukul Make in India

Skill development for Make in India

An effort by: Mukul SinghStudent PGDM(2014-16),MSM, Meerut

Make in India:• It has been initiated by our Prime minister Shree Narendra ModiObjective:To facilitate investmentTo foster innovationEnhance skill developmentTo build world class infrastructureTo make India as a “Manufacturing leader”To protect intellectual property

Skill development:• It is a multi-skill programme under “Make in India”Objective:Develop skill so that it can meet industry requirementTo create opportunity and scope for the development of talents To develop those sector which is already under skill developmentTo identify new sectors for skill development

Why “Make in India”?• Around 64% of India’s population is expected to be in the

age bracket of 15–59 years(Working age).

• Service sector has failed to create enough jobs.

• India has directly moved from agriculture to service.

“Make for India ”a different perspective:• Population of most of the country is aging which consumption of

goods and services will decline in the future. • India has huge population which create strong domestic demand.• Make sustainable unified market that requires reduction of

transection cost, effective supply chain management that makes the market competitive.• The implementation of GST bill and reduction of state boarder taxes .

Objective of the study and methodology:• 1-To study the importance of “Skill India” program for the economic

development of our country.

• 2-To study and analyse the major challenges in the “skill India” program and trying to find the solutions.

This study was done, which is based on descriptive research. The data and information vis-à-vis this topic were collected through the means of website , books, journals and many articles were also referred for preparation for this paper.

Literature review

Jobless growth:

1972-73 to 1977-78

1977-78 to 1983 1983 to 1987-88 1987-88 to 1993-94

1993-94 to 1999-2000

1999-2000 to 2004-2005

2004-05 to 2009-10

2009-10 to 2011-12

0

1

2

3

4

5

6

7

8

9

10

2.62.1

1.72.4

1

2.8

0.1

1.4

4.63.9 4

5.6

6.8

5.7

8.7

7.4

India's growth story

Employment growth(CAGR) GDP growth rate(CAGR)

Source:Reserve Bank of India

16.1

26.957

Contribution of sectors in GDP(In percentage)

Agriculture Industry service

People Engaged in different sectors(In percentage)

Source: IBEF and NSSO

48.9

13.610.6

26.9

Year(2011-12)

Agriculture IndustryConstruction Service

Reasons of Jobless growth:Stagnant manufacturing sector.Service sector has unable to create enough jobs because :• The sector which have large potential for generating employment such as

construction, Transport and professional service have grown slowly.• Faster growing sector such as services and communication and financial business

services low potential for generating employment. • Increasing productivity level in the faster growing sector may also leads to low

employment generation.

Scenario over the last couple of years:

1993 2009 20130

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

0.5

1.3

1.7

Share of global merchandise export(%)

1993 2009 20130

2

4

6

8

10

12

14

2.4

9.7

11.5

Share of global merchandise export(%)

Source:World Bank

India China

Challenges in skill

development

Unemployment rate among youths(%):

1999-00 2004-05 2009-10 2011-1202468

101214161820

5.1 5.2 5.5 6.1

3.7

7 6.57.8

11.510

7.98.9

16.6

19.9

17.215.6

Age group(15-29) Years

Rural Male Rural Female Urban Male Urban FemaleSource: NSSO various rounds

The reality of skill development• 12.5 million people joins the workforce every year but the training

capacity is less than half of that.

• India has set the target of skilling 500 million people by 2020 against the training capacity of less than 10% of that.

Challenges in the

governance

Ease of doing business: A reality

Source:Source: US Economic Census; BLS; BEA; ILO; Euromonitor; EIU; BCG Analysis

Weak infrastructure development

Assessment of State Implementation of Business Reforms

Source: World Bank, September 2015

R&D expenditure:

India Germany Japan USA China UK0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

0.80%

2.90%3.40%

2.80%

1.80% 1.80%

R&D Expenditure(% of GDP)

Source: BCG and CII

Challenges in the education

The truth of education

Primary(1-5)

Upper primary (6-8)

Elementary(1-8)

secondary(9-10)

Senior secondary(11-12)

Heigher education

0 20 40 60 80 100 120

99.3

87.4

95

73.6

49.1

21.1

Gross enrollment ratio

Class (1-5) Class (1-8) Class(1-10)0

5

10

15

20

25

30

35

40

45

50

19.8

36.3

47.4

Drop-out rates(In percentage)

Source: Ministry of HRD,Government of India,Year-2014

Workforce based on education level

Source:Planning Commission, XII Five Year Plan, Employment and Skill Development, Table 22.19

Enrollment in Vocational courses in India

• 5.5 million per year

• China has 18 times more than India.

• US has 2 times more than India .

Expenditure on education

Source: World Bank

Malaysia USA India Japan Australia Netharland Bhutan0

1

2

3

4

5

6

7

5.95.4

3.23.8

5.65.9

4.7

Expenditure on Education GDP(% of GDP)

Skill gap forecast from 2012-2022 in different states of India

Source: Ernst & Young report, 2014

Skilled Semi-skilled Unskilled

State Surplus/Deficit Surplus/Deficit Surplus/Deficit

Delhi 1.42 -0.17 0.41

Jharkhand -0.18 -0.4 0.8

Karnataka -0.71 -0.38 1.18

Maharashtra -3.36 -1.07 -0.45

Tamil Nadu -2.49 -3.42 -0.35

Skill gap forecasted by 2020(In millions)

Building &

Constructi

on

Infrastr

ucture

IT & ITeS

Auto & Auto Componen

ts

Toursi

sm &

Hospita

lity

Health ca

re

Transp

ortation &

Logis

tics

Media & Enter

tainmen

t

Educa

tion & Skill D

evt.s

ervice

s

Electr

onics & IT

Hardware BFSI

Leather

& Leath

er goods

real esta

te servi

ces

Organise

d Retail

Texti

les & Clothing

Informal employmen

t

Others

33

103.02

5.3

35

3.612.7 17.7

3 5.8 3.3 4.2 4.614 17.3

26.237.6

24

Source:Skill development in India by Dilip chenoy

Current education is not fulfilling industrial requirements:

Auto and componentsChallenges:• Only 3%-5% workforce has received the

formal training certification.• This sector faces 30% labor shortage even

though it provides livelihood to 6% of our population.

Government initiatives: • Housing Urban and development

corporation has established 640 building centers across India.

• Construction industry development council has started work actively across 19 states in India.

Building and constructionChallenges:• Quality of skilled workforce is

relatively low.• Styling and designing capabilities are

significantly low.

Government initiatives:• NSDC funds the Automotive skills

development councils.• Pilot project has been launched in 40

schools of Haryana where training in Automotive sector will be provided.

Findings

Reasons of skill gap in India:• Lack of vocational training framework.

• High school dropout rates.

• Inadequate training capacity.

• Dearth of industry ready skills even in the professional courses.

• Government unconsciousness towards Education.

Comparative advantages for

India

Cost advantage:

Demographic dividend:• Around 64% of India’s population is expected to be in the age bracket of

15–59 years by 2026, with only 13% of the total aged above 60 years.

• The skill gap is estimated by 2020 is around 350 Million.

Industry growth:

The area which needs reforms• We need to reform education system.

• We need to enhance the training capacity.

• We need to provide industry specific training.

• We need to enhance the vocational training institute.

• We need to focus on research based training institute.

• Infrastructure development:-linking every part of the country with domestic and international market through Roads,Airports,Ports etc.• Tax reform:- Implementation of GST and reduction of cross boarder

tax.• Land acquisition.• Access of financial easier.• Reduction on cost of doing business.• Reduction in transection cost.

Target ahead

Government initiatives so far:

• NSDC has partnered with 62 training bodies and has trained approx... 650,000 trainees across India.

• Establishment of 1,500 new ITIs through the DGET. • Establishment of 50,000 Skill Development Centers through the DGET.

• Setting up of PM National Council on Skill Development (operational).

• Setting up of National Skill Development Coordination Board (operational).

The wheel has started moving:

Source: WEF world competitiveness report 2015-16

FDI in India.• India saw the highest foreign

direct investment (FDI) inflow for new projects from Jan-June 2015.• India attracted 31 Billion dollar

as compared to China that is 28 billion dollar and USA that is 27 billion dollar.

Thank you