Unemployment and the Challenges of the Skill India Programme

Unemployment continues to be a pressing issue in India, compounded by the challenges of the Skill India Programme. According to a recent survey, 48% of Indian employers reported difficulties in filling job vacancies due to a talent shortage, with the IT sector being the worst affected. Additionally, the Periodic Labour Force Survey (PLFS) of 2018 revealed that 33% of formally trained individuals aged 15-29 were jobless, highlighting a critical gap between training and employability.

The Skill India Programme, launched with the ambitious objective of training at least 300 million skilled individuals by 2022, sought to address this gap. The Ministry of Skill Development was tasked with harmonizing training processes, assessments, certifications, and outcomes while focusing on the development of Industrial Training Institutes (ITIs). These institutions were envisioned as the foundational building blocks of this endeavor. Furthermore, an executive committee comprising representatives from nine ministries was established to oversee the programme. Vocational training was recognized as intersecting multiple domains, including agriculture, information technology, and human resource development.

Under the programme, the government committed to setting up 1,500 new ITIs and 50,000 skill development centers. One of the most innovative features of Skill India was the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), under which the government covered training fees for participants. Despite these initiatives, the programme has faced significant challenges in achieving its objectives.

Failures of Skill Development

A major limitation of the Skill India Programme is its inability to translate training into employment. Only 16% of youth who received formal training were funded by the government. Even more concerning, those who underwent training often failed to secure jobs. While the number of beneficiaries increased from 350,000 in 2016-17 to 1.6 million in 2017-18, the percentage of trainees who found jobs after completing their training dropped from over 50% to 30%. Out of 4.13 million people trained under the programme, only 615,000 (15%) managed to secure employment.

Limitations of the Programme

Several factors have contributed to the limited success of Skill India. First, the quality of training provided was often insufficient, resulting in low employability among participants. Second, the government expected some PMKVY participants to create their own enterprises. However, only 24% of the 615,000 employed trainees pursued entrepreneurship, and merely 10,000 applied for MUDRA loans, a negligible number given the scale of the programme.

India’s joblessness issue extends beyond skills development. It reflects a lack of appetite among industrialists and small- and medium-sized enterprises (SMEs) for recruitment. Weak demand, compounded by limited access to credit due to the accumulation of non-performing assets (NPAs), has led to significant idle capacities and inhibited investment. Additionally, government expenditure on education remains low, with allocations for school education declining from 2.81% of the budget in 2013-14 to 2.05% in 2018-19, compared to over 3% during UPA-II.

Reasons for Unemployment

The unemployment crisis in India is driven by several structural factors. The rapid expansion of the working-age population (15-59 years) has resulted in an annual increase of 14 million individuals entering the labor market since the 2000s. Simultaneously, the nature of labor supply is evolving, with more young adults enrolling in educational institutions and aspiring for higher-quality jobs.

The size of the workforce engaged in agriculture has been steadily declining due to stagnant public investment in the sector since the 1990s. Many young individuals in rural areas are increasingly eager to exit disguised unemployment in agriculture, seeking better opportunities elsewhere. However, the lack of adequate job creation in other sectors has left them without viable alternatives.

Conclusion

The Skill India Programme, despite its well-intentioned objectives, has struggled to address the root causes of unemployment in India. Poor training quality, a lack of alignment between skills and market demand, and weak industrial investment have undermined its impact. To tackle unemployment effectively, India needs to focus on improving the quality of education and training, enhancing public investment in agriculture and other sectors, and creating an ecosystem that encourages job creation and entrepreneurship. Without addressing these fundamental issues, the gap between training and employability will continue to persist, leaving millions of young Indians without meaningful opportunities for growth.