India’s economy has grown impressively, with GDP growth rates rising from 5.6% in 2012-13 to 7.6% in 2015-16. The country is poised to grow even faster, with its demographic potential, high investment and savings rates, and allocation of resources for infrastructure. But its high pace of economic growth and notable progress in reducing poverty over the last decade contrasts with the persistent gaps in creating a more inclusive, productive and formal labour market. Investment in skills development will ensure that economic and employment growth is more inclusive. This is especially important in the context of India’s demographic transition that has also produced a youth bulge in the working age population.
More than 8 in every 10 Indian workers are informally employed or work in informal sectors, excluded from employment rights, benefits and social protection. More than half of the non-agricultural working population is absorbed into the informal economy and employment growth remains concentrated in low-productivity sectors, such as construction. Not enough decent and productive jobs have been created. In addition, there are persistent and notable disparities in the labour force participation rates of men and women.
Productive and formal employment generation depends on the availability of an adequately skilled labour force through sustained investments in skills development and fostering opportunities for decent job creation through entrepreneurship. To close India’s skills deficit and increase employability, a range of policies and strategies are needed to address work-relevant education systems, career guidance, life-skills, and technical, vocational education and training schemes, along with on-the-job training in both formal and informal sectors.
The government has set up the Ministry of Skill Development and Entrepreneurship (MSDE), with an enabling framework to facilitate job creation and entrepreneurship, as well as attract private investment. Steps are also being taken to attract foreign direct investment and catapult manufacturing growth. The Pradhan Mantri Kaushal Vikas Yojana (Skill India Mission) is MSDE’s flagship scheme to enable young Indians to take up industry-relevant skills training and improve their employability. The government’s commitment to ensuring that young Indians are ready to compete in the labour market is demonstrated by the breadth of skilling programmes it has made available: National Apprenticeship Training Scheme, Deen Dayal Upadhyaya Grameen Kaushal Yojana, National Urban Livelihoods Mission, and the National Rural Livelihoods Mission. The National Career Service, launched by the Ministry of Labour and Employment, aims to provide job matching services in a transparent and user friendly manner.
Several national flagship schemes such as Make in India, Start-up India, Stand-up India (a bank loan programme to assist Scheduled Caste, Scheduled Tribe and women borrowers to set up a greenfield enterprise), and Digital India, have been launched to spur the creation of more productive and higher skilled micro, small and medium enterprises, which would accelerate labour demand and job creation. The Atal Innovation Mission endeavours to promote a culture of innovation and entrepreneurship by providing a platform for the generation and sharing of innovative ideas, alongside an incubator to mentor and support innovators.
The UN priority group on skilling, entrepreneurship and job creation partners with the government to strengthen labour market information systems, extend support for school-to-work transition strategies, as well as help improve the targeting, quality and delivery of employment and skills training programmes at the state level. It supports the government’s job creation and entrepreneurship strategies and programmes to ensure that young people, women, migrant workers and other marginalized groups are included. Efforts are concentrated in low-income states and districts and the North-East, and sectors including micro, small and medium enterprise (MSME) development, rural labour markets, labour intensive manufacturing, infrastructure development and new sectors such as green industry and affordable housing.
The group provided support to the Government of Mizoram on a skill-gap assessment and the formulation of a skill development and entrepreneurship policy. It also collaborates with MSDE on promoting entrepreneurship and supported the India consultation of the UN Secretary-General’s high-level panel on women’s economic empowerment and its follow ups.
The priority area group is led by the International Labour Organization (ILO) and United Nations Industrial Development Organization (UNIDO), and also includes International Organization for Migration (IOM), United Nations Development Programme (UNDP), United Nations Population Fund (UNFPA), United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), United Nations Human Settlement Programme (UN Habitat), United Nations Educational, Scientific and Cultural Organization (UNESCO) and United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).