Skill Formation in the Unorganised / Informal Sector in India

Skill Formation in the Unorganised / Informal

Sector in India

Ravi SrivastavaRavi Srivastava

Professor, CSRD, JNUProfessor, CSRD, JNU

&&

Former Member, NCEUSFormer Member, NCEUS

Skill Defined

An acquired and practiced ability or to a qualification needed to perform a An acquired and practiced ability or to a qualification needed to perform a job or certain task competently. It is a multidimensional concept. (World job or certain task competently. It is a multidimensional concept. (World Employment Report 1998)Employment Report 1998)

Ability to direct human energy efficiently to achieve desired goals. It is Ability to direct human energy efficiently to achieve desired goals. It is one of the attributes that generate knowledge resources, the others being one of the attributes that generate knowledge resources, the others being technology, organisation, information and education skill. (Planning technology, organisation, information and education skill. (Planning Commission’s Committee on India Vision 2020)Commission’s Committee on India Vision 2020)

‘‘Marketable skill’ --- to any skill / expertise / ability that has market value Marketable skill’ --- to any skill / expertise / ability that has market value or has the potential of being utilised for generating income/employment.or has the potential of being utilised for generating income/employment.

Marketable skill, whether acquired through formal or informal means, Marketable skill, whether acquired through formal or informal means, irrespective of whether it is being marketed or not, whether the intention is irrespective of whether it is being marketed or not, whether the intention is to market it or not, is considered skill. (NSS).to market it or not, is considered skill. (NSS).

““Formal skills” -- those developed in a structured and standardised Formal skills” -- those developed in a structured and standardised manner and where the training outcomes are measured/assessed according manner and where the training outcomes are measured/assessed according to some objective parametersto some objective parameters

Job and Skill hierarchy

We would expect to find a close relationship between the level of skills We would expect to find a close relationship between the level of skills and job hierarchy, with workers at the lowest level having the lowest and job hierarchy, with workers at the lowest level having the lowest level of skills (unskilled). level of skills (unskilled).

However, level of skills does not alone decide the workers position in the However, level of skills does not alone decide the workers position in the job hierarchy. job hierarchy.

Also important is the type of skill, its demand, and marketability. Here, Also important is the type of skill, its demand, and marketability. Here, the role of formal skills.the role of formal skills.

But apart from the worker’s skills, other endowments and level of But apart from the worker’s skills, other endowments and level of education, a workers place of the worker in the job structure also depends education, a workers place of the worker in the job structure also depends upon the worker’s personal and social attributes (i.e. social backround upon the worker’s personal and social attributes (i.e. social backround and gender ) and level of educationand gender ) and level of education

General issues in Skill Development

Need for continuous and lifelong learning Need for continuous and lifelong learning It is an area where typically markets might not deliver optimum It is an area where typically markets might not deliver optimum

volumes of skill that economies need because of ‘externalities’ volumes of skill that economies need because of ‘externalities’ Issues of who will provide it, where it will be provided, who will Issues of who will provide it, where it will be provided, who will

bear the costs bear the costs Demand led or supply led, Demand led or supply led, Supply-demand mismatches Supply-demand mismatches Preponderance of employment in the informal sector of the Preponderance of employment in the informal sector of the

economy – heterogeneous – training needs too varied complex economy – heterogeneous – training needs too varied complex Focus on large proportion of youth in the population Focus on large proportion of youth in the population

The informal sector in India

In India, 86 5 workers are employed in the informal sectors and 92.5 In India, 86 5 workers are employed in the informal sectors and 92.5 % are formal workers (including 45 % workers in the formal sector).% are formal workers (including 45 % workers in the formal sector).

In the economy as a whole, 58.5 % workers are self-employed, 28 % In the economy as a whole, 58.5 % workers are self-employed, 28 % are casual workers and only 15 % are regular workers.are casual workers and only 15 % are regular workers.

In the informal sector, 64 % workers are in agriculture. Both in In the informal sector, 64 % workers are in agriculture. Both in agriculture and non-agriculture, self-employed workers predominate agriculture and non-agriculture, self-employed workers predominate (65% and 63% respectively), and regular workers are a minuscule (65% and 63% respectively), and regular workers are a minuscule (0.6% and 6.7 % respectively). Hence lack of stable employment (0.6% and 6.7 % respectively). Hence lack of stable employment relationships dominate the informal sector.relationships dominate the informal sector.

The informal sector is characterised by great heterogeneity and low The informal sector is characterised by great heterogeneity and low productivity.productivity.

Size and Distribution of the Organised and Unorganised Sector Workers by Industry & Status

2004 – 05 Agriculture Non-agriculture All Organised Unorganised Total Organised Unorganised Total Organised Unorganised Total Number of Workers ( Millions) Self-employed

2.3 163.9 166.2 2.9 89.2 92.1 5.2 253.1 258.2

Regular Workers

1.2 1.6 2.8 41.9 24.8 66.7 43.2 26.4 69.5

Casual Workers

2.5 87.4 89.9 11.7 28.1 39.8 14.2 115.5 129.7

Total 6.1 252.8 258.9 56.5 142.1 198.5 62.6 394.9 457.5 Percentage Distribution of Workers Self-employed

38.1 64.8 64.2 5.1 62.8 46.4 8.3 64.1 56.5

Regular Workers

20.1 0.6 1.1 74.3 17.4 33.6 69.0 6.7 15.2

Casual Workers

41.8 34.6 34.7 20.7 19.8 20.0 22.7 29.2 28.3

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Percentage to total

2.4 97.6 100.0 28.4 71.6 100.0 13.7 86.3 100.0

Relationship between Sector and Type of Employment (UPSS), All Workers 1999-2000 &

2004-05

Total Employment (Millions) Sector/Worker Informal/Unorganised

worker Formal/Organised

worker Total

1999 – 2000 Informal/Unorganised sector

341.3 (99.6) 1.4 (0.4) 342.6

(100.0) Formal/Organised sector

20.5(37.8) 33.7 (62.2) 54.1

(100.0)

Total 361.7 (91.2) 35.0 (8.8) 396.8

(100.0) 2004 – 2005 Informal/Unorganised sector

393.5 (99.6) 1.4 (0.4) 394.9

(100.0) Formal/Organised sector

29.1 (46.6) 33.4 (53.4) 62.6

(100.0)

Total 422.6 (92.4) 34.9 (7.6) 457.5

(100.0)

Informal Sector and Skill Training

Special focus on perceived benefits of training, motivation of Special focus on perceived benefits of training, motivation of workers, length and timing , costs to workers and sharing of burden workers, length and timing , costs to workers and sharing of burden – in the context of heterogeneity of the sector.– in the context of heterogeneity of the sector.

Benefits unlikely to be directly perceived – greater element of Benefits unlikely to be directly perceived – greater element of externality and market failure.externality and market failure.

Type and content of training will be different:Type and content of training will be different: Need to focus from basic literacy and numeracy to technical training to social Need to focus from basic literacy and numeracy to technical training to social

networking and problems relating to balance home and workplace dutiesnetworking and problems relating to balance home and workplace duties Training would need to build up capabilities to shift from one profession to another Training would need to build up capabilities to shift from one profession to another

– multiskilling– multiskilling Social competencies’ and technical skills that might be industry or trade based need Social competencies’ and technical skills that might be industry or trade based need

to be focused on. Social competency, defined as ‘the ability to co-operate, to be focused on. Social competency, defined as ‘the ability to co-operate, communicate and represent collective interests’ is central to conducting a business communicate and represent collective interests’ is central to conducting a business as much as the technical aspects of the industry itself. as much as the technical aspects of the industry itself.

Combining skill training with livelihood promotion.Combining skill training with livelihood promotion.

Status of Education and Skills in the Informal Sector

Sources of data –The National Sample Survey Rounds (1993-94 and Sources of data –The National Sample Survey Rounds (1993-94 and 2004-05).2004-05).

NSS 1993-94 – all workers, NSS 2004-05 – youth (15-29 years).NSS 1993-94 – all workers, NSS 2004-05 – youth (15-29 years).

Mean Years of Schooling 2004-2005

Employment status Male Female Total Agricultural labourer 2.4 1.0 1.8 Self-employed in agriculture (cultivators) 4.5 1.9 3.4 Agricultural workers 3.7 1.6 2.8

Rural Urban Total Employment Status

Male Female Total Male Female Total Male Female Total Unorganised sector: Casual 3.6 1.5 3.3 4.3 2.1 3.9 3.8 1.7 3.5 Unorganised sector: Regular Workers (RW)

7.0 5.6 6.8 7.1 4.8 6.7 7.1 5.0 6.7

Unorganised sector: Self Employed

5.3 2.9 4.7 7.7 5.1 7.2 6.5 3.8 5.9

Unorganised sector (total) 5.1 2.9 4.6 7.0 4.7 6.6 6.1 3.7 5.6 Unorganised worker in OS: RW

7.9 7.2 7.7 8.8 9.6 9.0 8.5 8.5 8.5

Unorganised worker in OS

5.3 4.0 5.0 7.4 7.3 7.4 6.4 5.5 6.2

Organised Sector (OS) (total)

7.6 5.7 7.2 10.1 10.1 10.1 9.1 8.1 9.0

All workers 5.7 3.6 5.2 8.1 6.3 7.7 6.9 4.9 6.5

Non-agricultural Workers

Rural Unorganised Agricultural Workers

Educational Attainment of Workers aged 15 and above by Sector, 2004-2005

0%

20%

40%

60%

80%

100%

Perc

enta

ge o

f Wor

kers

Illiterate & Below Primary Primary Middle Secondary & Above

Male Female Total Male Female Total Male Female Total

Unorganised Sector Organised Sector All Workers

Skill Levels in 1993-1994

Approximately 10 per cent of population reported as having skills (91.2 Approximately 10 per cent of population reported as having skills (91.2 million) – 1993-94 - only refer to the lower level skills million) – 1993-94 - only refer to the lower level skills Rural Men(10%); Rural Women (6.3 %)Rural Men(10%); Rural Women (6.3 %) Urban Men (19.6%); Urban Women (11.6%)Urban Men (19.6%); Urban Women (11.6%)

Skills considered Skills considered predominantly formalpredominantly formal are: Stenographer; machineman; are: Stenographer; machineman; fitter, die-maker; electrician; repair of electronic goods; motor vehicle fitter, die-maker; electrician; repair of electronic goods; motor vehicle driver and midwife (urban) driver and midwife (urban)

The skills The skills considered predominantly informal considered predominantly informal are: fisherman; miner, are: fisherman; miner, quarryman; spinner including charkha operator; weaver; tailor, cutter; quarryman; spinner including charkha operator; weaver; tailor, cutter; carpenter; mason; bricklayer; shoemaker, cobbler; moulder; blacksmith; carpenter; mason; bricklayer; shoemaker, cobbler; moulder; blacksmith; goldsmith; silversmith; boatman; potter; midwife (rural); basket maker, goldsmith; silversmith; boatman; potter; midwife (rural); basket maker, wick product maker; toy maker; brick maker; tile maker; bidi maker; book-wick product maker; toy maker; brick maker; tile maker; bidi maker; book-binder; barber; mud-house builder & thatcher and Others binder; barber; mud-house builder & thatcher and Others

Percentage of Workers with Skills, 1993-94

Rural Urban Total Male Female Total Male Female Total Male Female Total Formal skills 3.4 0.2 2.3 12.1 3.9 10.3 5.6 0.7 4.0 Informal skills 13.9 11.9 13.2 22.4 25.9 23.2 16.1 13.9 15.4 Any marketable skill 7.3 12.1 5.5 34.5 29.7 33.5 21.7 14.6 19.4

Skill Levels (15 -29 years), 2004-2005

Only 11.5 per cent of those in the age-group 15-29 have received (or were Only 11.5 per cent of those in the age-group 15-29 have received (or were receiving) any training, whether formal or informal receiving) any training, whether formal or informal

3.8 per cent of the population with formal training 3.8 per cent of the population with formal training Largest share of youth population with formal skills in Kerala (15.5 %), Largest share of youth population with formal skills in Kerala (15.5 %),

followed by Maharashtra, Tamil Nadu, Himachal and Gujarat. The lowest followed by Maharashtra, Tamil Nadu, Himachal and Gujarat. The lowest incidence of formal training was in Bihar (0.5 %) incidence of formal training was in Bihar (0.5 %)

Among those trained or undergoing formal training, Maharastra accounted Among those trained or undergoing formal training, Maharastra accounted for 21.7 % share. Kerala and Tamil Nadu had more than 10 per cent share in for 21.7 % share. Kerala and Tamil Nadu had more than 10 per cent share in the skilled youth population of population with formal skills - all southern the skilled youth population of population with formal skills - all southern and western states and western states

The most sought after field of formal vocational training was ‘computer The most sought after field of formal vocational training was ‘computer trades’ (nearly 30 per cent). trades’ (nearly 30 per cent).

For men the next most popular trades were electrical and electronic, For men the next most popular trades were electrical and electronic, mechanical engineering, ‘driving’, ‘civil engineering’, health and mechanical engineering, ‘driving’, ‘civil engineering’, health and paramedical and office and business work’ paramedical and office and business work’

Among women there was a concentration of vocational training in Among women there was a concentration of vocational training in computers followed by ‘textile related trade’ (22 per cent), followed by computers followed by ‘textile related trade’ (22 per cent), followed by ‘health and paramedical and office and business work‘health and paramedical and office and business work

Percentage of Population with Skills in the age group 15 -29, 2004-05

4.53.1

3.8

9.4

5.8

7.7

0123456789

10

Male Female Total

Per

cent

age

of P

erso

ns

Formal Skill Informal Skill

2.51.7 2.1

8.5

6.47.6

9.5

6.2

7.99.2

4.9

7.3

0

1

2

3

4

5

6

7

8

9

10

Male Female Total Male Female Total

Rural Urban

Formal Skill Informal Skill

Percentage of Workers in Age-group 15 – 29 Years by Status of Vocational Training, Age-group in each Sector of

Employment, 2004-2005

5.4 million workers who 5.4 million workers who received formal training in this received formal training in this age group, 3.4 million workers, age group, 3.4 million workers, accounting for 63 per cent of accounting for 63 per cent of total trained people, belonged to total trained people, belonged to the unorganised sector the unorganised sector

Among the informally trained, Among the informally trained, 17 m were in the unorganised 17 m were in the unorganised sectorsector

Handful of trades where the Handful of trades where the incidence of formal training is incidence of formal training is higher in the informal sector. higher in the informal sector. These are: textile related trades; These are: textile related trades; handicraft/artisan/cottage based handicraft/artisan/cottage based production; and driving and production; and driving and motor mechanic work motor mechanic work

Usual Status Formal Non-formal Total Male

Unorganised 2.6 12.9 15.4

(86.9)

Organised 10.1 10.7 20.8

(13.1) Total 3.6 12.6 16.1 Female

Unorganised 2.3 11.7 14.03 (91.5)

Organised 14.2 9.4 23.61 (8.5)

Total 3.3 11.5 14.84 Persons

Unorganised 2.5 12.5 15.0

(88.4)

Organised 11.0 10.4 21.4

(11.6) Total 3.5 12.2 15.7

Skills of Workers (15 – 29 years) by Employment Status and Sector, 2004-2005

0.0

5.0

10.0

15.0

20.0

25.0

30.0

SE RW CL All SE RW CL All SE RW CL All

Unorganised Sector Organised Sector All Workers

Per

cen

tag

e o

f W

ork

ers

Formal Skills Informal Skills

Certain industries, across both the unorganised and organised sectors, which absorb Certain industries, across both the unorganised and organised sectors, which absorb more formal training - Health & Social Work, Real Estate, Finance, Education and more formal training - Health & Social Work, Real Estate, Finance, Education and Public AdministrationPublic Administration

In a few sectors such as education, public administration and construction is In a few sectors such as education, public administration and construction is estimated of formally trained as being higher in the unorganised sector estimated of formally trained as being higher in the unorganised sector

Industries in which formal skills are low but the percentage of workforce with any Industries in which formal skills are low but the percentage of workforce with any skills is quite high, such as manufacturing, construction, trade, hotels, and skills is quite high, such as manufacturing, construction, trade, hotels, and community and personal services are clearly those where there is prima facie community and personal services are clearly those where there is prima facie requirement of developing expanded formal training systems requirement of developing expanded formal training systems

Percentage of Persons in 15 – 29 Years with Vocational Training by Educational Attainment

Level and Gender, 2004-2005

Educational Attainment

Levels Formal Non-

formal

Total (With Skill) Formal

Non-formal

Total (With Skill) Formal

Non-formal

Total (With Skill)

Males Females Persons Illiterate & Below Primary

0.3 10.7 11.0 0.2 6.4 6.7 0.2 8.1 8.3

Primary 0.6 12.2 12.7 0.5 6.7 7.3 0.6 9.7 10.3 Middle 1.2 10.6 11.8 1.5 6.4 8.0 1.3 8.9 10.2 Secondary 4.1 8.1 12.2 3.2 5.0 8.2 3.7 6.8 10.6 HS 9.8 5.6 15.4 7.3 3.5 10.8 8.7 4.7 13.5 Diploma/ Certificate

70.4 2.9 73.3 68.3 2.7 71.0 69.7 2.8 72.5

Graduate & Above 17.5 4.5 22.0 17.4 2.8 20.2 17.5 3.7 21.2 Total 4.5 9.4 13.9 3.1 5.8 8.9 3.8 7.7 11.5

Poverty, Social Group and Skill

The incidence of formal training is fairly high only for the middle and The incidence of formal training is fairly high only for the middle and high income groups high income groups

Systematic association between income and training status is not the Systematic association between income and training status is not the case with non-formal training which is fairly dispersed across the lower case with non-formal training which is fairly dispersed across the lower income groups income groups

Share of persons with formal skills increases from STs, SCs, OBCs to Share of persons with formal skills increases from STs, SCs, OBCs to Others in that order \Others in that order \

In most cases in India, skills are acquired through inter-generational In most cases in India, skills are acquired through inter-generational learning and/or systems of informal apprenticeships. Informal skills, as learning and/or systems of informal apprenticeships. Informal skills, as we show below, are distributed across a wider cross section of the we show below, are distributed across a wider cross section of the population population

Highest proportion of informally trained people is in the lowest Highest proportion of informally trained people is in the lowest consumption expenditure categoriesconsumption expenditure categories

Since traditional manufacturing skills are the highest in the caste Since traditional manufacturing skills are the highest in the caste groups presently classified as Other Backward Classes (OBC), the groups presently classified as Other Backward Classes (OBC), the highest proportion of people with such skills are in this group, followed highest proportion of people with such skills are in this group, followed by the ST, SC and Other Caste groupsby the ST, SC and Other Caste groups

LOGIT MODEL: Dependent Variable - Persons with Informal Vocational Training

Variable Coefficient Odds Ratio Constant -7.298 Sector Rural(R) Urban

- 0.648*

- 1.913

Sex Female(R) Male

- 0.133*

- 1.142

Education Illiterate & Below Primary(R) Primary & Middle Secondary & Above

- 1.177* 3.229*

- 3.244 25.243

Poverty Status Below Poverty Line(R) BPL to 2*Poverty Line More then 2* Poverty Line

- 0.457* 1.250*

- 1.579 3.492

Socio-religious ST(R) SC OBC Others

- 0.851* 0.684* 0.529*

- 2.342 1.983 1.698

Variable Coefficient Odds Ratio Constant -2.906 Sector Rural(R) Urban

-

-0.119*

-

0.887 Sex Female(R) Male

-

0.524*

-

1.689 Education Illiterate & below Primary(R) Primary & Middle Secondary & Above

-

0.032 -0.507*

-

1.032 0.602

Poverty Status Below Poverty Line(R) BPL to 2*Poverty Line More then 2* Poverty Line

-

-0.030 -0.140*

-

.970

.869 Socio-religious ST(R) SC OBC Others

-

0.081 0.387* 0.220*

-

1.084 1.473 1.246

LOGIT MODEL: Dependent Variable Vocational Training (Have training Formal and Informal/No training)

Concentration of Women across Occupations, 2004-05High Growth (> 5 %)High Growth (> 5 %) Low GrowthLow Growth(< 5%)(< 5%)

High High Education Education (Mean (Mean Years of Years of Education Education >= 8.0 years)>= 8.0 years)

Computing Machine OperatorsComputing Machine OperatorsHair Dresser, Barber, Beautician, RelatedHair Dresser, Barber, Beautician, RelatedPhysicians, Surgeons, Scientific Medical, Physicians, Surgeons, Scientific Medical, Para MedicalPara MedicalEconomists, Auditors, Social Scientists, Economists, Auditors, Social Scientists, JuristsJuristsTeachersTeachers

Book Keepers, Cashiers, RelatedBook Keepers, Cashiers, RelatedClerical Related, Village OfficialsClerical Related, Village OfficialsNurses, Other medical, Health Nurses, Other medical, Health TechniciansTechnicians

Low Low EducationEducation(Mean (Mean Years of Years of Education < Education < 8.0 years)8.0 years)

Tailors, Dress makers, Sewers, Tailors, Dress makers, Sewers, Upholsterers, RelatedUpholsterers, RelatedSalesmen, Shop Assistants, RelatedSalesmen, Shop Assistants, RelatedStationary Engines, Equipment Operators, Stationary Engines, Equipment Operators, Material Handling, LoadersMaterial Handling, LoadersTanners, Fell Mongers, Pelt Dressers, Tanners, Fell Mongers, Pelt Dressers, Shoemakers, Leather Goods MakersShoemakers, Leather Goods MakersConstruction Workers, Stone CutterConstruction Workers, Stone CutterHouse Keeper, Matron, Steward, Cooks, House Keeper, Matron, Steward, Cooks, Waiters, BartendersWaiters, BartendersMaids, Related House keeping Service Maids, Related House keeping Service (Others)(Others)Production, Related (Others)Production, Related (Others)Jewelry, Precious Metal, Metal EngraversJewelry, Precious Metal, Metal EngraversHotel, Restaurant KeepersHotel, Restaurant KeepersAdministrative, Managerial, ProprietorAdministrative, Managerial, Proprietor

Wholesale/ Retail Trade, Manufacturers Wholesale/ Retail Trade, Manufacturers Agents, Technical Salesmen, Commercial Agents, Technical Salesmen, Commercial Travelers, Sales Worker (Other)Travelers, Sales Worker (Other)Protective Service Worker, Service Protective Service Worker, Service WorkerWorkerAgriculture & AlliedAgriculture & AlliedSpinners, Weavers, Knitting, RelatedSpinners, Weavers, Knitting, RelatedGlass Formers, Potters, RelatedGlass Formers, Potters, RelatedTobacco Preparers, Tobacco Product Tobacco Preparers, Tobacco Product MakersMakersLabourers (Others)Labourers (Others)Food Beverage ProcessorsFood Beverage ProcessorsMetal, Wood, Chemical Preparers, Metal, Wood, Chemical Preparers, Processors, Paper MakersProcessors, Paper MakersLaunderers, Dry Cleaners, PressersLaunderers, Dry Cleaners, Pressers

Supply of training: Training providers & Types

Skill Training in India:Skill Training in India: Vocational education, Vocational training, and Sector specific programmes to Vocational education, Vocational training, and Sector specific programmes to

address issues of skill formation and enhancementaddress issues of skill formation and enhancement Government led training & non-government led training (NG) & private sector)Government led training & non-government led training (NG) & private sector) Altogether, 39.2 lakh or 3.92 million persons were receiving formal training Altogether, 39.2 lakh or 3.92 million persons were receiving formal training

(NSS, 2004-2005)(NSS, 2004-2005) The Industrial Training Institutes (ITIs) and the Industrial Training Centres (ITCs) The Industrial Training Institutes (ITIs) and the Industrial Training Centres (ITCs)

provide the largest formal training base for about 7.88 lakh persons (20%); Men provide the largest formal training base for about 7.88 lakh persons (20%); Men 26%; Women 7%26%; Women 7%

Vocational education schools provided around 2 lakh training places (5 %) Vocational education schools provided around 2 lakh training places (5 %) Institutions affiliated to the UGC and the polytechnics provided about 6.15 lakh Institutions affiliated to the UGC and the polytechnics provided about 6.15 lakh

training places (9%)training places (9%) About 2.2 lakh persons were being trained in tailoring, embroidery and stitch craft About 2.2 lakh persons were being trained in tailoring, embroidery and stitch craft

(6%) Men 0.8%; Women 16.4%(6%) Men 0.8%; Women 16.4% 24.8 per cent of the formally trained in the unorganised sector and 22.4 per cent of 24.8 per cent of the formally trained in the unorganised sector and 22.4 per cent of

the formally trained in the organised sector come from the ITIs the formally trained in the organised sector come from the ITIs Higher proportion of the trained workers in the organised sector are from the UGC Higher proportion of the trained workers in the organised sector are from the UGC

institutions and the polytechnics institutions and the polytechnics Higher proportion of those trained in tailoring, embroidery and stitch craft, and in Higher proportion of those trained in tailoring, embroidery and stitch craft, and in

handloom, handicraft are in the unorganised sector handloom, handicraft are in the unorganised sector

Training Capacity – Official data

5465 ITIs/ITCs in India with a seating capacity of about 0.75 5465 ITIs/ITCs in India with a seating capacity of about 0.75 million million

Southern states comprised of nearly 45 per cent Southern states comprised of nearly 45 per cent Apprenticeship Training Scheme of the government is available to Apprenticeship Training Scheme of the government is available to

25.8 lakh workers 25.8 lakh workers Vocational Schools offer places to about 1 million persons Vocational Schools offer places to about 1 million persons Polytechnics offer about 3 lakh places Polytechnics offer about 3 lakh places

Vocational Education & Training Vocational Education - 3 categories of vocational education prevalent Vocational Education - 3 categories of vocational education prevalent

in India today:in India today: Lower school stage (since 1993-94); Class 10+2 stage Lower school stage (since 1993-94); Class 10+2 stage

(Vocationalisation of Secondary Education - since 1988-total (Vocationalisation of Secondary Education - since 1988-total training capacity is estimated at about 10 lakh per annum); at the training capacity is estimated at about 10 lakh per annum); at the specialised levelspecialised level

Vocational Training – Ministry of Human Resource Development Vocational Training – Ministry of Human Resource Development (MHRD); Ministry of Labour and Employment (MOLE)(MHRD); Ministry of Labour and Employment (MOLE) MHRD – Minimum level of training required higher secondary MHRD – Minimum level of training required higher secondary

education education - through degree, diploma, certificate through - through degree, diploma, certificate through

PolytechnicsPolytechnics- 1244 Polytechnics with a training capacity of 2.95 lakhs- 1244 Polytechnics with a training capacity of 2.95 lakhs

MOLE – Minimum level of training required middle school MOLE – Minimum level of training required middle school - through ITIs; ITCs; Industrial Apprenticeship; - through ITIs; ITCs; Industrial Apprenticeship;

- Craftsmen Training Scheme (Institutional training) and - Craftsmen Training Scheme (Institutional training) and Apprenticeship Scheme (Institutional plus On-job Apprenticeship Scheme (Institutional plus On-job training)training)

- 1987 ITIs (State Govt), 4847 ITCs (pvt), - 1987 ITIs (State Govt), 4847 ITCs (pvt),

Skill Development in Informal Sector

MHRD – MHRD – Community Polytechnics (669 institutions run scheme training 331000

per year) Jan Shikshan Sansthan (JSS) National Institute of Open Schooling (NIOS)

MOLE – MOLE – Skill Development Initiative (SDI) is a recent scheme , initiated in 2007 one million persons would be trained or their existing skills tested and

certified under Modular Employable Skills (MES) framework MSME - MSME - Entrepreneurship Development Programmes (EDP),

Entrepreneurship Skill Development Programmes (ESDP), KVIC’s Rural Employment Generation Programme (REGP), Prime Minister’s Rojgar Yojana (PMRY)

Ministry of Housing and Urban Poverty Alleviation - Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

Ministry of Rural Development - The Swarnajayanti Gram Swarozgar Yojana

(SGSRY)

Non-Government Initiatives and Skill Development

Private Sector Initiatives for Skill Development Private Sector Initiatives for Skill Development entrepreneurs or corporates establish training centres/institutes

on a for-profit basis private corporations impart training to people who are absorbed

as skilled workforce in their own production units enter into partnerships with public agencies – for finance or

training delivery corporate houses set up public trusts or foundations (CSR)

NGO InitiativesNGO Initiatives E.g. GramVikas (Orissa); SEWA (Gujarat); MAYA Organic E.g. GramVikas (Orissa); SEWA (Gujarat); MAYA Organic

(Bangalore); (Bangalore);

Modular Employable Skills (MES) under the Skill Development Inititiative Scheme (SDIS)

For early school leavers existing workers in the For early school leavers existing workers in the unorganised/informal sector.unorganised/informal sector.

Target of one million in five years.Target of one million in five years. Training provided through accredited Vocational training Providers Training provided through accredited Vocational training Providers

(VTPs) in the public & private sector which keep track of trainees (VTPs) in the public & private sector which keep track of trainees for 3 years.for 3 years.

Modest training and testing fees with 25% relaxation for SC/ST Modest training and testing fees with 25% relaxation for SC/ST candidates and reimbursement to VTP at prescribed rates on candidates and reimbursement to VTP at prescribed rates on successful completion of training.successful completion of training.

Over 308 course curricula developed under MES.Over 308 course curricula developed under MES. Testing and certification of existing or acquired skills. Private sector Testing and certification of existing or acquired skills. Private sector

and industries’ bodies among those accredited for certification. and industries’ bodies among those accredited for certification.

Coordinated Action on Skill Development

Prime Minister’s national Council on Skill developmentPrime Minister’s national Council on Skill development To set broad policy goals, review progress and coordination.To set broad policy goals, review progress and coordination. Has set a goal of 500 million skilled persons by 2022 with focus on inclusiveness and Has set a goal of 500 million skilled persons by 2022 with focus on inclusiveness and

has set out strategy and core principles of skill training. National Skill Development has set out strategy and core principles of skill training. National Skill Development Coordination BoardCoordination Board

National Skill Development Coordination Board (under the Planning National Skill Development Coordination Board (under the Planning Commission)Commission)

Coordination of governmental initiatives at Centre and State level through evolving Coordination of governmental initiatives at Centre and State level through evolving suitable frameworks and guidelines for all aspects of skill development.suitable frameworks and guidelines for all aspects of skill development.

National Skill Development Corporation (under the Ministry of Finance)National Skill Development Corporation (under the Ministry of Finance) Set up as a non profit company with an equity base of Rs. 100 m (49% private sector) Set up as a non profit company with an equity base of Rs. 100 m (49% private sector)

and with a Skill Development Fund.and with a Skill Development Fund. NSDF charged with stimulating private sector initiative in skill development.NSDF charged with stimulating private sector initiative in skill development.

NSDC also to establish credible certification systems.NSDC also to establish credible certification systems.

Some Conclusions from District Level Studies (NCEUS)

Existing Training Inadequacy of training facilities for unorganised workers Poor & Variable quality of training. Unorganised workers acquire training mainly through informal

apprenticeships, followed by government sponsored programmesTraining Needs Need for up-grading skills in both the rural and urban areas Training strategy for rural entrepreneurs / workers involve selection

of the subjects- training imparted through non-conventional institutions

Certification of skills may be an integral part of the strategy A well thought-out strategy for marketing the produce of the

unorganised sector entrepreneurs In urban areas MES should be identified for imparting both short

and long term training in such identified skills along with certification coupled with non-formal training programmes

Conclusions from Field based Studies (contd)

Training system and linkages Identification of master trainers at village, block and district level, and linking

them with formal training institutions Well designed training of trainers programme at formal institutions Post training work may be made available to women trainees near their place of

residence Financial support may be provided to subsidise wage losses of unorganised sector

workers during their trainingInstitutional Set up Nodal agency at district level to be set up to coordinate, implement, evaluate and

follow up the skill development programmes (different proposals). gender sensitive training strategies

District nodal agency, which will also serve as a Labour Market Information Centre

Nature of this nodal agency could be state specific Setting up training facilities at a decentralized level, at least at the block level, to

enable such workers to access them

Assessment of Training Expansion (NCEUS)

In order to work out the annual and plan-wise targets, the In order to work out the annual and plan-wise targets, the Commission has estimated the labour force for the years up to 2021-Commission has estimated the labour force for the years up to 2021-22 using the last three rounds of the NSS and the population 22 using the last three rounds of the NSS and the population projections prepared for the Planning Commission projections prepared for the Planning Commission

During the Eleventh Plan, the annual training capacity would need During the Eleventh Plan, the annual training capacity would need to about 12.5 million (up from about 5 m currently). A further to about 12.5 million (up from about 5 m currently). A further increase to 18 m would be required during the 12th Plan which will increase to 18 m would be required during the 12th Plan which will go up to 25 m during the 13th Plan. If these targets are achieved, go up to 25 m during the 13th Plan. If these targets are achieved, then by the end of the 13th Plan, about half the total labour force of then by the end of the 13th Plan, about half the total labour force of 623 million in 2021-22 would acquire formal skills 623 million in 2021-22 would acquire formal skills

General Issues

Formal and informal systems of skill development need to be integrated with training being competency based, flexible, allowing easy entry and exit to trainees at different points in their lives

Students should be able to move between vocational and general education streams by providing them with multiple entry and exit options

The MES provides the basis for expansion of training of informal workers.

Training system should link skill development with livelihood promotion - including identification of activities, credit and technological support, capacity building and backward/forward linkages – again part of the agenda of some governmental/non-governmental inititiatives.

But beginnings are very modest and organisational, institutional and financial issues still need to be addressed adequately.

Organisational Issues Skill development for the informal sector has to be structurally

different Need for a Mission Approach for Development of Skills in the

Unorganised Sector, coordinated by the NSCDB. NSDC should mainly provide financial support to NGOs and non-

profit organizations engaged in the training of informal sector workers NCVT may be identified as the primary agency charged with setting of

standards, certification of skills and accreditation of providers for all certificate based training

A state level structure should be established in the states which will perform the same coordinating functions at the state level which the NSDCB will perform at the national level

Skill development programmes for the unorganised sector should be operationalised by a District Skill Development Council (DSDC) with participation of all stake holders. Exact structure may be decided by states.

Need to set up a Labour Market Information System (LMIS) at the Need to set up a Labour Market Information System (LMIS) at the national, state and district levels linking various trainers and the national, state and district levels linking various trainers and the traineestrainees

Issues (contd.)

Consolidation and Strengthening of Training in the Existing Consolidation and Strengthening of Training in the Existing Livelihood and Social Sector ProgrammesLivelihood and Social Sector Programmes the quality of training imparted under them should be improved the quality of training imparted under them should be improved

and standardized and these schemes be integrated under the and standardized and these schemes be integrated under the training plan of the DSDA. These schemes should also involve training plan of the DSDA. These schemes should also involve formal certification procedures to ensure standardization and formal certification procedures to ensure standardization and minimum standards of quality. Over time, training under these minimum standards of quality. Over time, training under these programmes should be linked to the MES frameworkprogrammes should be linked to the MES framework

Provision of Formal Training to Informally Trained WorkersProvision of Formal Training to Informally Trained Workers formal certification systems being developed under the SDI are

able to reach out to the informal training system there can be incentives for the apprenticeships in the form of

reimbursement of fees charged on completion of the course, low or no fees charged for those from SC/ST backgrounds, and so on

continuously upgrade skills of master craftsmen/trainers continuously upgrade skills of master craftsmen/trainers themselves in order to be able to cope with changing technology, themselves in order to be able to cope with changing technology, fashion and shifting markets fashion and shifting markets

Issues (contd.)

Focused Approach towards Improvement in Training in Clusters effective partnership needs to be established between the DSDC

and all clusters in the district - representatives from different stakeholders in the clusters

several sectoral skill development programmes conducted by different agencies function as part of the industries that are organised in the form of clusters – need to be integrated and with focus on workers at low level of skills

incentive structures and costs to be incurred by potential trainees have to take into consideration differences between clusters

Issues (contd.)

Addressing Gender Issues in Skill Development

• content of training programmes for women may need to integrate components of literacy, numeracy, business skills, confidence skills in a bigger way

• done in a formal, participatory way through groups• should address the special constraints faced by women in

participating in training - absence of mobility, need for child care and gender segregation

• Women must also be encouraged to train for “hard” technical skills as well in areas such as agriculture