ABSTRACT
The last 20 years of economic reforms have demonstrated that growth is a necessary but not suffi cient condition for sustained poverty reduction. Sustainable poverty reduction needs access to decent paying jobs. And access comes from the 3Es — Education, Employability and Employment. Our higher education system needs to deliver quantity, quality and inclusiveness. However, the current regulatory regime is sabotaging all the three requirements. About 53 per cent of employed youth in India suff er some degree of skill deprivation, while only 8 per cent of youth are unemployed. Also about 57 per cent of India’s youth bear some degree of un-employability. Thus, the 82.5 million unemployable youth fall into the following three skill-repair buckets:
(a) Last mile repair (<0.5 years): 5.3 million (b) Interventional repair (0.5-1 year): 21.9 million (c) Structural repair (1-2 years): 55.4 million
The last mile repair suggests simple training in certain basic business etiquettes, communication skills, soft skills, and certain generic skills which many of the educated people take for granted, be it even as simple as ‘how to wear a tie’. This is exactly the kind of training which a candidate will get if he is given access to the workplace via apprenticeship programmes. The source of the problems lies in the mismatch between demand and supply; 90 per cent of employment opportunities require vocational skills but 90 per cent of our college/school output has only bookish knowledge. High dropout rates (57 per cent by Class VIII) are incentivised by the low returns of education; 75 per cent of school-fi nishers make less than `50,000 per year. The poor quality of skills/education shows up in low incomes rather than unemployment; 45 per cent of graduates make less than `75,000 per year. The situation is becoming more urgent because agriculture is unviable with 96 per cent of
farm households having less than 2 hectare. Seventy per cent of our population and 56 per cent of our workforce produce 18 per cent of Gross Domestic Product (GDP). Demographics can be a dividend or a disaster because 300 million youth will enter the labour force by 2025. In fact 25 per cent of the world’s workers in the next four years will be Indians. One can say that the country’s 50 per cent self-employment rate does not refl ect entrepreneurship but its failure to create non-farm jobs and skills. The skill-defi cit hurts more than the infrastructure-defi cit because it sabotages equality of opportunity and amplifi es inequality while poor infrastructure maintains inequality (it hits the rich and the poor equally).
