The current constellation of stars seems quite favourable for a complete overhaul of the education system with a new dynamic Minister, who is encouraging high expectations.

The new government is also talking of positive change. Never mind that they did not achieve much in the last 5 years, the focus now is to look ahead. However, the strategy for the future has to go beyond just education reform. On the one hand, India’s workforce is abundant, but it is largely untrained. On the other hand, the labour eco-system suffers from well-known flaws. What is needed is to put all the bricks in place for a foundation that should have been built long back—to tackle the issues of employment, employability and education in a coherent fashion.

Between 2001-2026, total population will increase by 371m and 83% of the increase will occur in the age-group of 15-59 years. Most of this increase will occur in states like Bihar, Assam, Madhya Pradesh, Uttar Pradesh, Rajasthan—states that are already facing huge development deficits. Though a large working force has often been referred to as India’s demographic ‘dividend’, it can easily turn into a disaster of large scale unemployment, with accompanying social and political consequences, unless drastic reforms are not carried out soon.

Programmes like Sarva Shiksha Abhiyan and the Mid Day Meal have been instrumental in bringing children to school, but keeping the children in school is another challenge yet to be overcome. By the Xth standard, around 60% of the children enrolled have left school, and the situation is more severe in several states in the Northeast, Bihar,

Rajasthan etc. The quality of education being meted out to students is another problem that has led to even college graduates being quite unemployable, lacking even the most basic communication skills.

As the accompanying table shows, unemployment is largely a problem of the youth. Experience counts more than education as labour stays in low skill jobs, learning as they go along. Just 2% of population in the age group 20-24 has had vocational training. This percentage is more than 50% in developed countries. Even Mexico and Peru are higher than India at 28% and 17% respectively. This shows up in a severe productivity problem, with low incomes for the earners, while industry faces a shortage of skilled labour. The problem of employment therefore is tied in part to the poor quality of workforce. Programmes like NREG in their current form are, at best, stop-gap measures. Having tasted high growth and chafing at the constraints of unskilled labour, industry bodies managed to engage with the government, resulting in the programme of upgrading more than 1,000 Industrial Training Institutes through the PPP model in 2007. India however has a capacity of training 3.1m annually, and the National Skill Development Policy 2008 has set a target of “skilling 500m by 2022”. That is 15m annually.

Piecemeal reform will therefore get the country nowhere and the India Labour Report 2008, the third in an annual series of reports by Teamlease Services and Indicus Analytics, sums up the agenda for the economy, “We need to rapidly put in place a system where the large numbers of youth can be well prepared for the requirements of employment, create institutions that can adequately match human skills and knowledge with requirements, and enable last mile corrections through training and on the job learning options.” The report points out three strands of reform that need to be woven together to make labour markets more inclusive as well as raise productivity in the economy.

The first strand, employment reform (to match labour supply to demand) should include changing labour laws to simplify definitions, compliance etc, that currently hinder expansion of organised employment, converting Employment Exchanges into Career Centers that offer assessment, counseling, apprenticeships, jobs and certifications etc.

The second strand is employability reform, which has already begun, to some extent, with the National Skill Development Policy 2008 and the PPP model for ITIs. Much more needs to be done though, e.g the NREG could be used for providing apprenticeships and funding skill development.

The third strand in the strategy would be to prepare the supply for demand—education reform—which requires a policy shift from accreditation and regulation of capacity to measuring and publicising outcomes and quality. Government financing has to be separated from delivery, which can be done through a broad based voucher programme. The list of change would include greater autonomy and governance reform in institutions, creating a performance management system for government school teachers with rewards and punishments for attendance and learning outcomes, creating a National Qualification Framework to allow two-way fungibility between vocational, college and school education with appropriate transfer of credits etc.

All this may seem a tall order, but without it, the country is destined to plod along slowly, developing internal fissures that may be beyond repair.

—Sumita Kale is chief economist at Indicus Analytics and can be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Source: The Financial Express