Human Resource Development
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India can be the world’s skill hub, says HRD Minister
Oct 01, 2013

 India can be the world’s skill hub, says HRD Minister


The Hon'ble Minister for Human Resources Development (HRD) Dr M M Pallam Raju said India has the potential to become the worldwide hub for sourcing skilled labour, apart from meeting the country’s demand.

The Minister was speaking at the 6th HR Summit 2013, titled Reviving Economic Growth & Development: Leveraging Human Capital, organized by Confederation of Indian Industry (CII) in Mumbai.

The Hon’ble Minister said the greatest challenge for the nation is to make its large workforce more employable. He pointed out that of the 4 lakh engineering students who graduated every year, only 20% are employable. “Recognising that the future growth of India will depend on greater skill development, the National Policy for Skill Development aims to create a skilled workforce of 500 million by 2022. The 12th Plan has put a modest target of skilling 80 million by 2017,” he said.

The Minister said India’s average age by 2022 will be 29 years against 40 years in the US, 46 years in Japan, and 47 years in Europe.  He said if India wished to earn from the demographic dividend, then India must provide education and skills to all its youth so that they can develop themselves into a human resource, not just for India but for the world.

Dr Pallam Raju lamented that despite rapid growth over the last decade, there has not been a substantial creation of new jobs. He added that this was a cause for concern as nearly 12 million people would join the workforce every year. The Minister said the Indian workforce around 500 million. Of these, only 14% of our workforce in the formal economy, 86% of workforce are in the unorganized sector. He further pointed out that China moved 150 million people from agriculture to the manufacturing, whereas in India manufacturing has stagnated. “India needs a massive improvement in the manufacturing sector and much greater investment in education and skilled labour,” he averred.  

He said the current economic downturn was a good time to focus on skill development and increase productivity, just as Indian industry had focused on productivity during the last slowdown to its benefit.

The Minister admitted that the current GDP growth was not what the government wanted, but drew the audience’s attention to the Prime Minister’s statement that the government was committed to get India back to 8-9% growth. “Key issues that have been troubling us are showing signs of decline. Public debt to GDP ratio was 66% in 2012-13 from over 73% in 2006-07. External debt is also at 21.2% of GDP, and we are looking to reduce the Current Account Deficit to 2.5% of GDP,” he said in a soothing note.

Earlier, the ICICI Bank Ltd MD and CEO, Ms Chanda Kochhar, said every sector of India’s economy would have to perform if the country was to create 12 million jobs every year to absorb the rising numbers entering the workforce every year.

She pointed out that India must stay wary of the middle-income trap, wherein the country becomes old before it becomes rich. She said India must harness its demographic dividend over the next two decades, otherwise it risks getting trapped in the middle-income countries.

Ms Kochhar said at present more than 60% of India’s population was less than 30 years of age, and the media age was 25 years. Even by 2030, India’s median age would be about 30 years of age, which will give it a low dependency ratio. “India will continue to stay young even as the world ages. Over the next two decades, India will add 25% to the world’s workforce,” she pointed out.

The ICICI Bank MD commented on India’s supply-demand paradox: the country has abundant supply of labour, but there is a huge demand for skilled labour. “We need to provide both education and skill development. We have to ensure that this young population gets educated, gets skills that are required,” she added.

Indian Express Editor-in-chief Mr Shekhar Gupta complained that India had created a skewed skill set nation, with too few avenues for those not opting for medicine or engineering. “Even our RBI governor hails from IIT. This country doesn’t have enough economists, or political scientists or sociologists,” he said.

Mr T K Srirang, Chairman, Western Region HR Sub-Committee, and Head, HR, ICICI Bank, who outlined the summit theme and objective, asked the delegates to look at questions about skills. He said India produced 20 lakh engineering graduates, but only 2 to 3 lakh were employable, forcing 7 lakh to migrate to other jobs.

Mr Ninad Karpe, Chairman, CII Maharashtra State Council, and MD & CEO, Aptech Ltd, who inaugurated the Summit, said manufacturing needed to be revived so that it can start employing people. He also urged industry to be inclusive, and to look at blue-collar workers rather than just white-collar workers.

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