The NDA report-card

That Narendra Damodardas Modi is an able and effective leader is a fact that even the stringiest critics cannot deny. The 14th Prime Minister of the nation has captured the imagination of a vast majority of the population, and has an effective communications strategy in place which is an undeniable fact. The man has a gift for getting what he wants, as electoral victories in states and local elections have not halted despite implementing the single most economically disruptive step (of demonetization) in recent times. His achievements and short-comings are likely to be discussed feverishly in the next two years, and possibly for the next several years or decades perhaps. While several volumes of books can be (and have been) written about his performance on the economic, political, diplomatic, social and environment front, the scope of this article is restricted to evaluating two high-stakes fields: skilling and job creation. And despite all the accolades he has won, even his ardent followers cannot claim that these two areas have been significantly been calibrated.

While launching the ‘Skill India’ mission in July 2015, the Prime Minister announced that the goal was to skill 400 million people by 2022. The National Skill Development Mission, and the Pradhan Mantri Kaushal Vika Yojana (PMKVY) were launched with impressive visions and targets. However, two years later, no major break-through has occurred. As a matter of fact, a committee, constituted by the government itself, has noted severe functional discrepancies in the entire exercise. The Committee headed by Sharada Prasad presented a report “Report of the Committee for Rationalization & Optimization of the Functioning of the Sector Skill Councils” which was made public in April this year. The report revealed that lofty “skilling targets and subsidization has created a system that is not demand-driven in terms of skills needed by their respective industry nor is it high-quality education that is likely to land them a job.” Regarding Skill Sector Councils (SSCs), autonomous industry-led entities responsible for skill-gap studies, curriculum development, training of trainers, trainee assessment, the report says, “Most of the SSCs in their quest to achieve the targets, compromised in quality of training, assessment and certification leading to the current situation of mess”.

Furthermore, the biggest drawback of the previous governments’ interventions hasn’t been rectified: different stakeholders, ministries, departments and organizations are working towards the same goal of skilling people, but have minimal coordination. Among the quality and duration of courses on offer, mismanagement of funds, inefficient methodologies to measure the skill level of trainees, questions are also being raised on how many people are actually placed with jobs as a result of the training imparted by the government. The Prasad Committee report reveals that, “out of 18.03 lakh persons trained under PMKVY in 2015-16, only 12.4 percent persons were placed.” The fact that the panel has called various councils a “hotbed of crony capitalism”, with many SSCs trying to “extract maximum benefit” from public funds, is indicative of how grave the challenges are. Jayant Krishna, Chief Operation Officer of the National Skills Development Corporation, stated in an interview to The Wire that schemes had glitches and inadequacies, yet course correction is already underway. However, he also admitted that skilling 400 million people by 2022 was a ‘daunting task’ in the same interview, considering that only 5 percent of the 480 million workforce is formally skilled. Last month, NSDC is said to have initiated a dialogue with the government to review the 2022 target to make it more ‘realistic’.

It is estimated that some 12-13 million people join the workforce every year in India. While campaigning for the 2014 election, Modi had promised to create one crore jobs, and taken shots at the ‘jobless growth’ during the previous UPA regime. However, if numbers are anything to go by, the NDA government is faring much worse. After peaking to an all-time high of 9.5 lakh new jobs per year between 2009 and 2011, job creation has seen a steady fall. After increasing in 2014, creation of new jobs has progressively nose-dived. Between 2015 and 2016, the average has dipped to less than 2 lakh jobs per year. During the second quarter of 2016, this number dipped to a new low of 77,000, as per the information by Labour Bureau. 

As per a report in The Hindu, when job creation dipped to 1.5 lakh in textiles, metal, leather, gems and jewelry, IT and BPO, transport, automobiles and handlooms; the alarm bells rang, and the government sought a review in the methodology of data collection. As a result, education, health and restaurants were added to the list. An HDFC Bank jobs report in 2016 said that India’s employment elasticity was 0.39 fifteen years ago, and it stands at 0.15 now, which means the rate of job creation has more than halved. In other words, jobless growth is very much a reality. Add to that the blow that demonetization must have had to employment the informal sector. 

The recent turbulence that has hit the IT sector, the $150-billion worth crown jewel of the services industry means that things aren’t likely to improve anytime soon. With slipping growth, new skill requirement, and tough global policies, talks of lay-offs and salary cuts have become all too common. If the industry that employs over four million people is in deep trouble, the impact is bound to be profound.

No matter how well the government has done on other accounts, skilling the huge workable population of the country and providing them with jobs remains a fundamental challenge. There needs to be a systematic, strategic and comprehensive overhaul of skilling interventions to ensure that they achieve the objectives. The government knows what doesn’t work; hence, needs to control the damage. Furthermore, ensuring the overall health of the economy is essential for the sectors to keep growing and assimilating more people. However, that is not all. The government needs to ramp up its efforts to attract foreign investment, allow private players to expand their facilities and form a channel that effectively builds a pipeline of skilled talent. 

A population wherein a majority is unskilled and unemployed can tip the scales anytime; and that is a challenge that the government needs to consider credibly. The government is known for being opportunistic, creative and taking risks; it should extend the same qualities to its skilling and employment interventions. 

References

Prasad Committee Report