India’s labour force is projected at 500 million by 2017, potentially the world’s largest. Consulting firm KPMG says that by 2022, India will have the largest working age population (between 15 & 59).
Finding jobs for these hundreds of millions will not be simple. Several challenges abound. First, skilling the workforce. Second, anticipating technology changes which might drastically shrink requirement for labour. The former has been thought about, not so much the latter.
To his credit, India’s Minister of State for Skill Development and Entrepreneurship Rajiv Pratap Rudy seems to be taking the challenge head on, even if he does not have answers for all the problems. BOOM’s Govindraj Ethiraj caught up with him in New Delhi last week.
Ethiraj: We are seeing a spate of farmer suicides which highlights a larger problem, that is a large part of the population is exposed to agriculture but is contributing very less to the country's GDP. This means, there are not enough people, not enough skills, not enough jobs.
Rudy: This won't be the right connotation. Agriculture, as a domain, has about 300 million people working there. These skills are very different from the skills we are talking about manufacturing. We also have an agriculture sector skill platform.
If you look at the world and compare the skilled workforce, China, at a population of 1.4 billion people, would have around 45 per cent of people who are skilled. UK would have around 68 to 70 per cent skilled people, Japan at about 80 per cent, Germany 74 per cent, Korea 96 per cent and India is just at two per cent!
But, the overall requirement for the country is that you have to create wealth for the country. And for wealth, you have to go to manufacturing, which means the growth rate has to come up. When you are talking about “Make in India”, we are talking about industry, and industrial growth and Make in India will happen only if we have skills in India.
For skills in India, we have started. It’s fortunate that the prime minister has started this ministry. If you look at the world and compare the skilled workforce, China, at a population of 1.4 billion people, would have around 45 per cent of people who are skilled. UK would have around 68 to 70 per cent skilled people, Japan at about 80 per cent, Germany 74 per cent, Korea 96 per cent and India is just at two per cent!
We have just started the work, 66 years late and we have lagged on this but we have started talking about it. All these years we have been talking about education; and education is linked to employment. So, we need a paradigm shift - that change is taking place. This is a major challenge that the country is facing. It’s not that the skills weren't happening. It was happening but was not happening in a structured way, in a standardised way. That was the challenge we were facing.
Manufacturing has to grow and it has to go from 12 to 20 per cent if that has to happen. In China, about 400 million people were moved from the farm sector to the factories. This possibility is required in India. We need to create that capacity.
Ethiraj: But if you look at the global manufacturing environment, is the manufacturing in a position to absorb so many jobs? Considering manufacturing itself is going to change.
Rudy: Talking about jobs, jobs do not come from large investments; jobs come from entrepreneurship, small entrepreneurships. So that's a different debate and it has been proved across the world.
Manufacturing has to grow and it has to go from 12 to 20 per cent if that has to happen. In China, about 400 million people were moved from the farm sector to the factories. This possibility is required in India. We need to create that capacity.
Ethiraj: It is required but there is increasing scepticism on whether it’s the right way?
Rudy: These are the challenges which we have to address. So, once we have marked these challenges, I am sure we are going to go forward. As far as skill development is concerned, we have already set up a route map. We are going to roll-out a policy this year.
It is a mission for the Prime Minister. It connects everything. We are talking about demography dividends which are about for 450 million people. This aspect has to be addressed and all thanks to the Prime Minister that we have started addressing these issues.
Ethiraj: Let me put a different question to you. You have been at this job for a while now...
Rudy: Nor for a while. For only five months. And the ministry has come into existence for the first time in India in 66 years. What you must remember is that this is a very important assignment that is given to me. The Prime Minister thought about it, we have started focusing on it but it started 66 years late.
We lack trainers. We had teachers, we did not have trainers. The major challenge is trainers. The second is resources. The third is mobilization and to make it aspirational. People want to get degrees but they don't want to become a plumber or a carpenter or a craftsman. So, that is the biggest challenge.
Ethiraj: What are the challenges you see ahead for yourself?
Rudy: The biggest challenge is to match the international standards. Even if it is a two-month course, it should have a standard. It should have a certification and it should have an assessment. It should be matched to the requirement of the industry.
Resources! We lack trainers. We had teachers, we did not have trainers. The major challenge is trainers. The second is resources. The third is mobilization and to make it aspirational. People want to get degrees but they don't want to become a plumber or a carpenter or a craftsman. So, that is the biggest challenge.
Ethiraj: So what's your sense on how your ministry is going to be addressing these challenges?
Rudy: I almost have a blue print for all these issues. We have year-marked the challenges there and we have a clear road map for the industry and rolling out the policy. Some of the states are doing a very good job like Chattisgarh, Rajasthan. Gujarat for that matter, Kerala - many of the states are doing a great job.
Ethiraj: You used the China manufacturing example. My question is, assuming things don't go that way, what are the other ideas that are thrown after this system? Will we ever see that kind of demand for manufacturing capacity in India that we hope there will be?
Rudy: No. There cannot be assumptions. This is a challenge that has to be met.
There is already an existing demand. Irrespective of whether it is for the manufacturing sector or not, but there is a demand. Manufacturing comes along with a lot of investments, foreign funds flow, and innovation. So it’s not just one single aspect, but one of the most essential ingredients and the human ingredient is skilled workforce which we have to create for the industry.
Ethiraj: So what are the kinds of ideas that we are seeing which are perhaps a little different from what you have seen so far?
Rudy: For example, trainers. About 50,000 young armed forces personnel retire every year below the age of 38-39. So there are a lot of skills in the armed forces. We put them to training and there is MOUV being signed with the Ministry of Defence.
Similarly, to capitalise on Indian Railways, which has a huge infrastructure for virtual training at railway stations, we are tapping this 43,000 kms of optical fiber network, which is at dedicated stations with electricity and infrastructure. So there is a lot of out-of-the-box solutions coming up. But at the end of the day, we require lot of resources. Today, when we talk about skilling, and we talk about 50 crore people, or let’s slash it to half, 25 crore people in next five years. That would mean, at an average cost of Rs 20,000, we require about Rs. 5 lakh crores.
That should have happened in the last 60 years but we have to pull in resources. The demand is huge. There is demand for skilled work force. Everyone in this studio is skilled, may not have a degree, but you require skilled people to run the show. That is what we want. Yours is a different skill, which is actually based on a lot of education but everyone in this room requires a skill which may not require a degree in the college or university.
Ethiraj: Last question. So you possess a skill yourself, you are a trained pilot. What would you tell people, a lot of young people who too aspire to be pilots?
Rudy: When I was a child, I wanted to become an auto mechanic and then I wanted to become a train driver, finally landed up become a pilot. I fly big planes, so it is an aspiration that has to be built up in an individual.
Of course, education was a part all throughout and then, I got into politics. That aspiration, of an individual and all those people, which we are mobilising in the villages, and I am interacting with are 7th or 8th (standard) dropouts. They are so happy to come and get skilled.