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The biggest challenges that India's government and industry face today are generating employment and ensuring employability. How do we convert our deluge of drop outs, matriculates and graduates into employable individuals? Failure to absorb them into the workforce surely would have long-term negative implications on social stability.


A large labor force on one hand and the industry crying for productive resource on the other hand - India's demographic profile is like many of its paradoxes. Analysts predict that about 12 million young Indians will come to job market every year for next 5 years with little or no employable skills. This has to do with the lack of soft skills (communication, English language, etc.) in the services industry and lack of technical skills in the manufacturing space.

Therefore, there is an increasing awareness that vocational training is the need of the hour. Focus tends to be shifting from education to employability – as the larger socio-economic focus area for the masses. New Indian laborer being significantly more educated than his previous generation, education & skills training can make the new laborer desire urban/semi-urban jobs with employment contracts in manufacturing or services. The big challenge as well as opportunity is designing a model for this industry and delivery mechanism that benefits both of its main stakeholders: students as well as companies setting up these businesses.

The government has taken important initiatives in recent past to ensure that India emerges as the 'World's Skill Capital' and has formulated a strategy to extend its skill development reach, by:

  • Setting up National Skill Development Corporation (NSDC) to encourage private players with soft loan and equity support to create a sustainable model in Skill Development.
  • Taking the ITIs the PPP (public-private partnership) way – for better and efficient utilization of immense physical infrastructure already available.

Estimated to be a US$20 bn per year market for next 10-15 years, vocational training and employability enhancement is poised to be the game changer for India for emerging as the economic superpower – if planned and executed correctly.

Sources: Kotak Institutional Equities July 2011 report, NSDC report, Census data of India.

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