Coupled with a continual increase in voluntary unemployment, the International Labour Organisation expects unemployment in India to be higher in 2018. In a country where 65% of the population is below 35 years, unemployment, especially among youth, can limit the nation’s ability to reap the much-hyped demographic dividend. Recognizing this challenge, a wide range of stakeholders, including the government, companies, civil society organizations, and for-profit enterprises are working either independently or in cohesion to enhance youth employability.

A 2017 Intellecap study, of more than 80 programmes and organizations engaged in youth skilling in India, found that currently four models are used for supporting youth employability in the country. The first model, or the self-employment model, works on the rationale that if youth are trained in a particular skill, they will have the capacity to become micro entrepreneurs. The second model, or the employer-led model, trains youth in specific skills relevant to an enterprise and then absorbs the youth into their own value chain. The third, the placement-led model, provides training to youth and also established linkages with potential employers. Fourth, the market linkage model provides end-to-end support to self-employed youth, assisting them in earning better incomes. The government has also undertaken a structured approach via the establishment of the ministry of skill development and employment and the Pradhan Mantri Kaushal Vikas Yojana.

Intellecap’s study raised a critical question: Why is unemployment increasing despite these efforts? The answer perhaps lies in the enormity of the challenge in India—more needs to be done to make a noticeable dent. Additionally, several other challenges give a unique colour to the problem. First, unemployment is higher among the formally educated in comparison to the illiterate. Second, there is higher youth unemployment in rural areas, while most interventions focus on urban areas. Third, there is a mismatch between the skill sets that industries require and the skill sets that youth are equipped with. These structural challenges result in a demand-supply mismatch which can be summarized as a) mismatch between youth aspirations and the skills training being provided, b) mismatch in skills training and industry needs, and c) poor industry buy-in for vocational training courses because of lack of standardization and universally accepted certification. 

Solutions, therefore, must focus on understanding aspirations, industry requirements and standardization across the skill-development value chain. Well-designed interventions will be effective only if the candidates are willing, receptive and capable of absorbing the knowledge or skill being imparted by the intervention. Counselling in skilling programmes is hence essential to align the aspirations of programme beneficiaries with the expected outcomes of training. Further, candidates may already possess specific complementary skill sets that could provide them with a competitive advantage. A candidate-selection framework would greatly enhance the efficacy of such interventions. 

Similarly, while designing programmes, it is critical to map skills being imparted to the specific needs of potential employers so that the skilling-to-employment loop is closed seamlessly. A recent right to information request highlighted a failure of placement-led programmes undertaken by the National Skill Development Corporation (NSDC). Of the 800,145 candidates trained through non-scheme skilling programmes in 2016-17, only 48.4% received placements. As a result, NSDC plans to move to a model where training partners will receive funds as per the outcomes achieved. The movement towards outcome-based funding is a welcome step towards strengthening future programme design. Similarly, when it comes to designing programmes that focus on self-employment or entrepreneurship, it is important to assess demand for the product or service, and study policies or schemes that can be leveraged to enhance sales. This is critical as beneficiaries of such programmes are expected to source their own work after the training. 

There is also scope for increased public-private partnerships. Most skilling organizations struggle to access premises and technical infrastructure/equipment, which constrains their scale. Public-private partnerships (PPPs) can use existing under-utilized infrastructure available with educational institutions to facilitate vocational training and skill development. PPPs can also facilitate finance and market linkages. For instance, partnerships with financial institutions can provide the seed capital (through government schemes such as Stand-up India) required by beneficiaries of self-employment models to set up micro-businesses. Likewise, partnerships between companies and social enterprises can help access appropriate market linkages. Lastly, regular monitoring/evaluation and impact-assessment activities are required for course correction and sharing best practices. 

India’s demography provides a great opportunity for the country with regard to economic growth and development milestones. Concentrated and evidence-backed efforts which can cohesively develop and strengthen youth aspirations, the skill development ecosystem and markets where youth can be employed are necessary for India to realize that opportunity. 

Usha Ganesh and Shreejit Borthakur are, respectively, adviser—research and consulting, and senior associate, Intellecap. Comments are welcome at theirview@livemint.com

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