Context: The global labor market is increasingly facing shortages due to an aging workforce and demand for new skills. This issue is particularly relevant to India, where the demographic dividend presents an opportunity, but also a challenge, to ensure that the workforce is equipped with the necessary skills for both domestic and global employment markets.
Relevance: General Studies Paper III – Economic Development
Mains Question: Analyze the role of skill development initiatives in addressing the global labor mismatch. How can India leverage its demographic dividend to meet international workforce demands?
- Global Labor Mismatch and India’s Involvement:
- The increasing mismatch between workers’ skills and job demands is a significant issue. For instance, Indian workers sent to Israel to address labor shortages faced challenges due to inadequate skill alignment.
- Labor shortages are pronounced in key sectors globally, including construction, healthcare, and social services. For instance, the Global Skill Gap Report 2020 by NSDC highlights labor demand across regions like the GCC and EU. These regions look to countries like India to fill workforce gaps, especially given their aging populations.
- India’s Skill Development Ecosystem:
- The National Skill Development Mission (NSDM), launched in 2015, aims to create a skilled workforce capable of meeting industry demands both domestically and internationally. Under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the government has trained millions of youth, providing skills certification for jobs in various sectors. The recent PMKVY 4.0 focuses on advanced skills in areas such as AI, robotics, and coding to align with global market needs.
- India’s apprenticeship model, under the National Apprenticeship Promotion Scheme (NAPS), further supports on-the-job training, a critical aspect of bridging the skills gap.
- Challenges in the Skill Development Sector:
- Despite numerous initiatives, only 2% of India’s youth receive formal vocational training, compared to 96% in South Korea. This stark difference emphasizes the need for scaling up initiatives.
- Another issue is the low employability among graduates, with only about 33% of Indian youth possessing the necessary skills to meet employer demands, according to the India Skills Report 2024.
- Recent Initiatives to Address Skill Gaps:
- The SANKALP Program (Skills Acquisition and Knowledge Awareness for Livelihood Promotion) was launched with World Bank assistance to improve skill training outcomes across states. The program particularly focuses on marginalized populations, aiming to improve both quality and access.
- Additionally, PM Vishwakarma Yojana, launched in 2023, targets traditional artisans and craftspeople by providing them with skill upgradation, financial support, and tools to connect with global value chains.
- Global Integration of Indian Labor:
- As India focuses on training its youth to international standards, various programs such as Pravasi Kaushal Vikas Yojana (PKVY) prepare workers for overseas employment by aligning skills with global job markets.
- This focus on skill development can significantly address the labor needs of countries facing shortages, helping India become a global provider of skilled labor while simultaneously addressing domestic unemployment.
Additional Data:
- India Skills Report 2024: Only 33% of Indian job seekers have employable skills.
- Vocational Training: Only 2% of India’s youth receive formal training, compared to 96% in South Korea.
- SANKALP: Over 98 trainers certified in 2023 under the program to improve skill development infrastructure.
Conclusion:
The global labor market is evolving, and India is well-positioned to fill significant workforce gaps, provided it continues to upskill its population. With initiatives like NSDM, PMKVY, and SANKALP, India can ensure its workers are equipped for the demands of the international market. However, the country must address gaps in formal training and improve employability to truly leverage its demographic dividend.
