Description
Skill Formation And Employment Assurance In The Unorganised Sector
Skill Formation and
Employment Assurance in
the Unorganised Sector
NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE
UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR
16
th
& 19
th
Floor, Jawahar Vyapar Bhawan,
1, Tolstoy Marg, New Delhi-110 001
www.nceus.gov.in
2009
December , 2008 December , 2008 December , 2008 December , 2008 December , 2008
Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or
19th Floor, Jawahar Vyapar Bhawan, 1 Tolstoy Marg,
New Delhi - 110001
Website: www.nceus.gov.in
Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he
Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or
1. Social Security for Unorganised Workers, May 2006
2. National Policy on Urban Street Vendors, May 2006
3. Comprehensive Legislation for Minimum Conditions of Work and Social
Security for Unorganised Workers, July 2007
4. Conditions of Work and Promotion of Livelihood in the Unorganised Sector,
August 2007
5. Financing of Enterprises in the Unorganised Sector, November 2007
6. Creation of a National Fund for the Unorganised Sector (NAFUS), November
2007
7. Report on Definitional and Statisticla Issues relating to Informal Economy,
November 2008
Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or
19th Floor, Jawahar Vyapar Bhawan, 1 Tolstoy Marg,
New Delhi - 110001
Website: www.nceus.gov.in
Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he
Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or
1. Social Security for Unorganised Workers, May 2006
2. National policy on Urban Street Vendors, May 2006
3. Comprehensive Legislation for Minimum Conditions of Work and Social
Security for Unorganised Workers, July 2007
4. Conditions of Work and Promotion of Livelihood in the Unorganised Sector,
August 2007
5. Financing of Enterprises in the Unorganised Sector, November 2007
6. Creation of a National Fund for the Unorganised Sector (NAFUS), November
2007
7. Report on Definitional and Statistical Issues relating to Informal Economy,
November 2008
8. A Special Programme for Marginal and Small Farmers, December 2008
Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for
Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or
1. Measure of Labour Force Participation and Utilization, January 2008
2. Contr ibution of the Unor ganised Sector to GDP Repor t of the Sub
Committee of a NCEUS Task Force, March 2008
3. Definitional and Statistical Issues Rel ating to Wor ker s in Infor mal
Employment, January 2009.
ii
P re face
The issue of skill building has been at the forefront of policy debates in recent years. India can take advantage of
its young workforce and hence the demographic dividend, only if the workforce possess relevant skills and is
ready to seize the opportunities arising domestically as well as in the international arena. Several committees/
commissions/task forces have examined the issues related to skill formation and recommended to expand/
upgrade the skill building efforts. However, most of these recommendations have generally remained focused
on the formal sector.
It is in this context that the NCEUS has examined the issue of skill formation in the unorganized sector. The
Commission has carried out a detailed analysis of the socio-economic characteristics of the skilled and unskilled
persons based on the latest set of data from the Sixty-first Round of the National Sample Survey in 2004-05. It
is estimated that only 11.5 per cent of those in the age-group 15-29 have received (or were receiving) any
training, whether formal or informal. Only 2.5 per cent of total unorganised sector workers had formal training
while 12.5 per cent had non-formal training. In the organised sector, 11 per cent workers had formal training
and another 10.4 per cent had informal training. The Commission recommends the proportion of formal
training to increase from 2.6 per cent of the labour force as per the NSS 2004-05 Survey to reach a level of 50
per cent of the labour force by 2021-22. Those targeted would include potential entrants into the labour force as
well as the existing pool of workers whose skills require to be upgraded.
The Commission has examined the specific features of the skill formation process in the unorganized sector.
In this context, it has underscored the need to understand the heterogeneity of the informal sector in India,
which leads to a wide range of training needs, requiring analysis and policy formulation that is different from
that of the formal sector. The informal sector is highly heterogeneous and encompasses a wide range of
economic activities as well as people (i.e. workers, producers, employers) engaged in manufacturing/service
activities under several types of employment relations and production arrangements. Some basic questions
related to training and skill-building/ upgrading as applied to the informal sector, and which have been discussed
in detail in this report, concern such aspects as: training for whom, for what, what kind of training and how best
it can be provided.
The Commission has put forward a set of comprehensive recommendations for building a skill development
and training system that explicitly focuses on the expansion of Vocational Education and Training (VET) for the
informal sector workers who generally also have low levels of education. While doing so, we have deliberately
not focused upon systems of formal training primarily intended for organised sector workers with reasonable
levels of education. These systems of training are a subject of reform and have been discussed extensively in
other reports.
A major highlight of this report is the proposed scheme of Skill Formation and Employment Assurance which
provides entitlements to all registered youth in the unorganized sector to receive training through placements.
The scheme will provide employment to poor persons for about six months and impart to them formal marketable
skills. The scheme is intended for youth with at least primary but less than higher secondary levels of education.
Further, it is largely intended to cover the poor youth. In the first phase, urban areas with inadequate employment
opportunities may be focused. Pilot projects in some 50 non-metropolitan smaller towns with population
between 50,000 and 5 lakhs may be taken up. This may be followed by the other segments of the eligible
population, such as youth in the rural areas and larger towns. The financial provision per worker would be Rs
ii ii
10,000/- which would cover on-the-job training/employment, cost of certification and cost of training/incentive
to the provider/employer. The programme requires a one time financial outlay of Rs. 10,000 per worker, which
is the same as that provided under the NREGA. A provision of Rs 10,000 crores over five years for this project
would thus ensure additional training-cum-employment to one crore persons through this mechanism,
augmenting the present training capacity by 2 million per year under the programme. A higher budgetary
allocation would result in larger job creation. However, the success of the programme would crucially depend
upon motivating the existing and newly created administrative mechanisms to effectively implement this proposal.
The Commission has studied the major institutional developments in the field of skill development in the last few
months which has seen the setting up of the Prime Minister's National Council on Skill Development, the
National Skill Development Coordination Board under the Planning Commission, and the National Skill
Development Corporation under Ministry of Finance. These are welcome steps as they provide an institutional
backbone for formulating policy guidelines, channelling funds and ensuring coordination in skill building efforts.
The Commission is confident that the country will not let go the present opportunity and take forward the
programme of skill-building in a Mission mode. This will help the country achieve its goal of rapid and inclusive
growth.
Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a
Chairman
National Commission for Enterprises in the Unorganised Sector
New Delhi
April 24, 2009
iii iii
Ack n o wle d g e m e n ts
The Commission wishes to acknowledge the contributions of a large number of persons in the preparation of
this report. The members of the Task Force on Skill Formation in the Unorganised Sector made a valuable
contribution by holding discussions and offering suggestions and written inputs. The Commission also benefited
by the discussions in the Advisory Board. District-level studies were carried out for the Commission by the
G.B.Pant Institute of Social Sciences, Allahabad, Debate, Bhopal, and North Eastern Development Finance
Corporation (NEDFI), Guwahati.
Officials of the Government of India, particularly the Ministry of Micro, Small and Medium Enterprises and the
Ministry of Labour and Employment provided relevant material and useful feedback to the Commission. Experts
in the India office of the International Labour Organisation (ILO) and World Bank helped the Commission by
providing information on a number of issues concerning skill formation, particularly the experiences of different
countries. Editorial support was received from Dr.N.K.Nair. The Commission takes this opportunity to thank
the above individuals/organizations.
We would like to place on record our deep appreciation of the contribution of the staff of the Commission
towards preparation of this Report. Shri J.D.Hajela, Director bore the main responsibility for co-ordinating all
the activities related to the preparation of this Report. Ms. Sumangala Damodaran, Consultant rendered valuable
support in the analysis and writing of this Report. Professor Jeemol Unni and Shri Biswajeet Saikia contributed
to the first draft of the Report during their stint as Consultants to the Commission. Excellent research assistance
was provided by Ms. Swati Sachdeva, Shri Ajaya kumar Naik and Ms. T. Shobha Singh. Shri S.V.Ramana Murthy,
Director provided critical assistance on statistical issues. Shri Savitur Prasad, Joint Secretary, Shri G.Sajeevan
and Ashutosh Mishra, Directors in the Commission, Shri G.Raveendran, consultant, Shri D.P.Singh and Shri
Suresh Kumar, Under Secretaries, and Shri H.S. Chhabra, Section Officer and the whole team of supporting
staff provided excellent services in the functioning of the Commission in general and the preparation of this
Report in particular.
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i ii ii
A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i i i i i i i i i i i i i i
1 . 1 . 1 . 1 . 1 . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 11 11
2 . 2 . 2 . 2 . 2 . S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y 4 44 44
3 . 3 . 3 . 3 . 3 . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 1 1 1 1 1 1
4 . 4 . 4 . 4 . 4 . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . 3 7 3 7 3 7 3 7 3 7
5 . 5 . 5 . 5 . 5 . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 4 5 4 5 4 5 4 5
6 . 6 . 6 . 6 . 6 . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2 7 2 7 2 7 2 7 2
R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 8 5 8 5 8 5 8 5
A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7 8 7 8 7 8 7 8 7
A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 0 9 0 9 0 9 0 9 0
L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s
3.1 Educational Attainment of Persons, 2004-2005 ............................................................. 12
3.2 Skills of Population in the Age Group 15 -29, (1993-94) ................................................... 15
3.3 Skill Levels of Population in the Age Group 15 -29, (2004-05) (in millions) ...................... 16
3.4 Percentage of Persons in Age-group 15 - 29 Years with Formal Training among States,
(2004-2005) .................................................................................................................... 18
3.5 Percentage of Workers in Age-group 15 - 29 Years by Vocational Training Status
(2004-2005) .................................................................................................................... 18
3.6 Percentage of Persons in 15 - 29 Years with Vocational Training by Education & Gender
(2004-2005) .................................................................................................................... 20
3.7 Percentage of Persons in Age-group 15 - 29 Years Receiving/ Received Formal Vocational
Training by Field of Vocational Training & Sex (2004-2005) ................................................ 22
3.8 Percentage of Persons in Age-group 15 - 29 Years Receiving Formal Vocational Training
by Institute of Training & Sex, (2004-2005) ..................................................................... 25
3.9 Vocationally trained youth in Labour Force: International Comparison........................... 27
4.1 Training Systems ............................................................................................................ 39
4.2 Advantages / Disadvantages of Unregulated Apprenticeship ........................................ 41
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s
3.1 Educational Attainment of Workers Aged 15 & Above by Sectors, (2004-2005) .............. 13
3.2 Percentage Distribution of Persons with Marketable Skills, (1993-94) ........................... 14
3.3 Percentage Distribution of the Unemployed by Marketable Skills, (1999-2000) ............. 15
3.4 Percentage of Population with Skills in the Age Group 15 -29, (2004-05) ........................ 17
3.5 Percentage of Population with Skills in the Age Group 15 -29 by Place of Residence,
(2004-05) ........................................................................................................................ 17
3.6 Skills of Workers (15 - 29 years) by Employment Status & Sector (2004-2005) ............... 19
3.7 Distribution of Population in the Age Group 15-29 across Education & Skill Levels
(2004-2005) .................................................................................................................... 20
3.8 Educational Levels of Usual Principal and Subsidiary Status Workers with Formal
Skills (15-29 years) by Sector (2004-2005) ...................................................................... 21
3.9 Percentage of Persons in the Age Group 15 -29 with Formal Skill in Poverty Groups
(2004-2005) .................................................................................................................... 23
3.10 Percentage of Persons with Skills in the Age Group 15 -29 for each Social Groups
(2004-2005) .................................................................................................................... 24
L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s
5.1: Vocational Education in Indian Pl anning ......................................................................... 46
L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s
A3.1 Skil l s across the Popul ation (1993-94)............................................................................... 29
A3.2 Skills of Workers (15 - 29 years) across Industries and Sectors (2004-2005) ....................... 30
A3.3 Percentage of Workers Receiving/ Received Formal Vocational Training in Age-Group
15 - 29 Years by Institutions of Training and Sector (2004-2005) .......................................... 31
A3.4 Logit Model: Dependent Variable Vocational Training (Have Training, Formal and
Informal /No Training) ..................................................................................................... 32
A3.5 Occupation of Workers by Education & Skill (2004-2005) : Sector Status ............. 33
A3.6 State-wise Total Labour Force and Increase in Labour Force and Training
Capacity .......................................................................................................................... 36
A5.1 Skill Development Programmes being Organised/Funded by Ministries/Departments of
Central Govt. (Nos.) ......................................................................................................... 69
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s
1. Terms of Reference of the Commission.......................................................................... 90
2. Past and Present Composition of the Commission ......................................................... 91
3. Composition of the Advisory Board ................................................................................. 92
4. Composition and the Terms of Reference of the Task Force on Skill Formation in the
Unorganised Sector ..................... 93
5. Summary of Comments by Central Ministries, State Governments, NGOs, Academia
and others on the Draft Report on Skill Formation & Employment Assurance in the
Unorganised sector ........................................................................................................ 96
1
Introduction
1
1.1 The Nat i onal Commi ssi on f or
Enterprises in the Unorganised Sector has been
constituted as an advisory body and a watchdog
for the informal sector. I t has the mandate to
examine the status of the unorganised sector,
analyse the constraints on the growth of the sector,
and make necessary recommendati ons. The
detailed terms of reference and composition of
the Commission as well as its Advisory Board
are given in Annexures 1 to 3 of this report.
1.2 I ndia’s growth achievements during the
economic reform period have been documented
extensively. I n recent years the country grew at
nearly 9 per cent per annum and real national
income grew by 125 per cent during 1992/93 -
2005/ 06 compared to 93 per cent during the
previous period of same duration. While these
achievements are, no doubt, remarkable from a
macroeconomic perspective, this Commission has
documented other aspects of the development
scene in I ndia, viz. the preponderance as well as
the perpetuation of the informal economy. The
Commi ssi on esti mated that the i nformal or
unorganised workers constituted an overwhelming
86 per cent of total workers in 2004-05. Between
1999-2000 and 2004-05 what increased in I ndia
was t he i nformal empl oyment , bot h i n t he
organised as well as the unorganised sectors. More
t han t hree- fi ft hs of t hi s workforce i s sel f-
employed. Of the remaining regular or casual
wage workers, only half are employed i n the
organised sector. Given these trends, the bulk of
employment is likely to be in the unorganised
sector of the economy, at least in the immediate
years to come.
1.3 This Commission has, in its earlier report
(NCEUS 2007), also highlighted the need for
developing the potential and productivity of the
huge workforce, from the point of view of both
the economy as well as the individual. Several
studies and policy documents have highlighted
the acute mismatch between the workforce needs
and the availability of skilled manpower to sustain
the economy’s growth rates. With a very low level
of labour productivity, the need for large numbers
of skilled people is felt more acutely in the context
of the country’s need to compete internationally
in manufacturing as well as services and to emerge
as a significant player in the knowledge economy.
From t he demand si de, whi l e t he economy
experi enci ng rapi d growt h, ski l l short ages
emerged across the board, drawing our urgent
attention to the problem of skill development. One
esti mate i ndi cates the need for a 20 mi lli on
i ncrease i n ski l l ed workers by 2015 (CI I -
McKinsey Report ‘Madein India: thenext big
manufacturing export story’ (October 2004) or
incremental skilling of 1.5 million people every
year.
1.4 The present report of the Commission
brings out various aspects of the need for, and
ways to enlarge the skill base of the economy,
keeping in mind the large size, nature of growth
and dynami cs of t he unorgani sed sect or. I t
highlights the fact that while it is necessary to
i ncrease the number of ski lled people i n the
2
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
economy, the preponderance of the i nformal sector
necessitates a view of the issue different from that of the
organised sector. I n other words, in order to increase the
productivity of more than 9/10ths of I ndia’s workforce
in, the nature of their participation in and linkages with
the economy have to be explicitly kept in mind.
1.5 The role and performance of the existing skill
development and training system have been extensively
reviewed by a number of organizations and a number of
proposals have been made within the governmental system
to strengthen and expand the skill development system
in the country. On August 15, 2007 the Prime Minister
al so announced a four- fol d i ncrease i n the ski l l ed
manpower training capacity of the country as an integral
part of the National Skill Development Mission.
1.6 I n keepi ng wi t h t he urgency of massi vel y
expanding the skill base of the economy, the NCEUS
constituted a Task force in June, 2005 on Skill Formation
in the Unorganised Sector to consider the following
aspects.
• I dentify the characteristics and specificities of
skill formation in the unorganised Sector.
• Revi ew the exi sti ng arrangements for ski l l
formati on i n the unorgani sed sector at the
Central and state levels.
• Examine the adequacy of the training and skill
devel opment component of t he current
programmes of wage employment and self-
empl oyment and recommend measures for
improving their effectiveness.
• Recommend measures for optimally utilizing
the existing infrastructure for training and skill
formati on for addressi ng the needs of the
Unorganised Sector.
• I dentify the unmet as well as emerging demand
for skill sets in an expanding and globalising
economy and devise an institutional framework
to rectify the mismatch between demand and
supply of skills.
• Study the characteristics of urban employment
and under employment and assess the potential
of programmes of skill development as a strategy
of employment generation in urban areas.
• I dentify the best practices in the programmes
of skill formation in the unorganised sector
operat ed by t he government and non-
government organizations.
• Design a National Skill Development I nitiative
for the unorganised sector and suggest a strategy
for its implementation.
1.7 The Task Force included several eminent people
and recei ved many val uabl e suggesti ons whi ch are
incorporated in this report. The Composition and the
terms of reference of the Task Force is given in Annexure-
4. The Draft Report and recommendations were also
discussed with the Commission’s Advisory Board. A
number of comments/suggestions on the draft report were
received which are summarized in Annexure-5
1.8 The report is structured as follows. The present
chapter provides a brief introduction to issues in skill
development in the informal sector and outlines the
methodology of preparing the report . Chapter 2 reviews
the role of knowledge based inputs (i.e. education, skills
and technical education) in promoting growth, especially
in the emerging knowledge economy, by highlighting
the cases where the skills-productivity linkages have been
experienced in developing economies such as in East Asia.
The Commission also lays out a framework for looking
at the issue of skills in the unorganised sector, from the
point of view of those who are part of it.
1.9 A significant aspect of this report is a detailed
skill profile of the I ndian workforce, presented in Chapter
3. The Commission constructed a skill profile of I ndia’s
workforce that encompasses both education as well as
the knowledge acquired, through formal or informal
means, that prepares an individual for a vocation or
occupati on. Thi s profi le bases i tself on i nformati on
regarding the level of marketable skills, both formal and
informal, that are possessed by people in I ndia according
to NSSO surveys and assessments of the number of people
trai ned through the vari ous formal vocati onal ski ll
acquisition programmes. I t attempts to evaluate the level
and kind of skill availability with estimates of the level
and nature of demand for skills in the economy. I t also
looks at the relationship between the level of skills and
educational profile of the workforce and also between
skill availability, education and poverty. I t demonstrates
3
that, on the one hand, a large part of the I ndian workforce
has low educational attainments and lacks even the basic
foundational skills in the form of literacy and numeracy
and on the other, I ndia’s skill base is mostly informal and
thus it is difficult to adapt to the changing market and
technological environments.
1.10 We have present ed t he sal i ent feat ures of
different models of international skill development and
training experiences in Chapter 4, which lays special
emphasi s on i ni ti ati ves that have been seen for the
unorganised sector.
1.11 The existing system of skill development and
trai ni ng i n I ndi a, consi sti ng of a l arge number of
institutions, programmes and initiatives of the Central
and state governments, as well as the private and NGO
sectors, is reviewed in Chapters 5. Through this review,
the aim of the Commission has been to collate a huge
corpus of information collected from diverse sources and
present it under a coherent framework. More crucially it
brings out the key features of the skill development system
in I ndia. I t also aims to locate the possible reasons for
the existing narrow skill base. Our review of the existing
system in I ndia also critically examines the issues raised
by several governmental and international organizations.
1.12 Our focus on the unorganised sector and the
perceived need to view skill development differently, given
the preponderance of this sector in the I ndian economy,
enabled us to lay out a detailed strategy and a set of
recommendat i ons f or revampi ng, expandi ng and
reorienting the existing skill development system in I ndia.
These are presented in the last Chapter of the report. I t
envisions the setting up of a system that lays out clear
guidelines and a coherent organizational framework for
the country as a whole, focused on the decentralized,
representative and need based delivery systems at the local
level. The Commi ssi on beli eves that thi s suggested
structure will be able to address the needs of a growing
economy on the one hand and the huge workforce on
the other.
I n tro d u cti o n
4
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Skill Formation, Productivity
& Growth - Issues in a
Developing Economy
2
2.1 I t is being increasingly argued that one
of the prerequisites to enhancing the quantum and
quality of employment in developing countries is
adequate ski ll formati on and trai ni ng of the
workforce. I n more contemporary experiences of
development, the case that is quoted widely is that
of the countries of East Asia where, beginning
f rom very l ow l evel s of t rai ni ng and ski l l
acquisition, several countries made spectacular
progress in providing these to very large segments
of the workforce. This has also been held up as a
textbook case of extraordinary achievements in
human capital formation. I n turn, the large scale
training and skilling of the workforce is seen to
have contributed substantially to the sustained
economic success of these countries.
2.2 The term ‘skills’ is used to refer to a wide
range of attributes in the literature and to that
extent, there is no clear definition of a skilled
worker. According to the World Employment
Report (1998), the term ‘skill’ ‘skill’ ‘skill’ ‘skill’ ‘skill’ refers to an acquired
and practiced ability or to a qualification needed
to perform a job or certain task competently. I t is
a multidimensional concept as most jobs require
a combination of skills for adequate performance,
ranging from physical abilities to cognitive and
interpersonal skills.
2.3 According to the Planning Commission’s
Committee on I ndia Vision 2020 ski ll ski ll ski ll ski ll ski ll can also be
perceived as the ability to direct human energy
efficiently to achieve desired goals. I t is one of
the attributes that generate knowledge resources,
t he ot hers bei ng t echnol ogy, organi sat i on,
information and education skill. While material
resources are consumed when they are utilised,
knowledge resources increase when shared and
can be stored at negligible cost. (GOI /Planning
Commission 2002b:26).
2.4 I n practical terms, ‘marketable ski ll’ arketable ski ll’ arketable ski ll’ arketable ski ll’ arketable ski ll’ is
commonly understood to refer to any ski ll /
expertise / ability that has market value or has
the potenti al of bei ng uti li sed for generati ng
income/employment. According to the National
Sampl e Survey Organi sat i on (NSSO), any
market abl e ski l l , whet her acqui red t hrough
formal or informal means, irrespective of whether
it is being marketed or not, whether the intention
is to market it or not, is considered skill. I n this
sense, an i nventory of such marketable ski lls
provides information on the kinds of work that
people can do, irrespective of whether it has been
acquired formally or not.
2.5 However, when reference is made to levels
of availability of skilled labour in the context of
economic development, it is processes of formal
skill acquisition and training for employment that
become important. Developing countries tend to
lag behind in making these processes available to
5
t hei r popul at i ons. These processes of formal ski l l
acquisition and training come from general educational
systems and systems of technical and vocational education
and t rai ni ng (TVET) t hat are l i nked t o speci f i c
occupations. They include learning designed to develop
the skills for practising particular occupations, as well as
learning designed to prepare for entry or re-entry into
the world of work in general. TVET includes both initial
vocational training undertaken by young people prior to
entry in to the labour market and continuing vocational
training undertaken by adults whilst in work or during
periods when they are economically inactive. I n other
words, it encompasses both initial skills initial skills initial skills initial skills initial skills development and
various forms of ‘Re- ski lli ng Re- ski lli ng Re- ski lli ng Re- ski lli ng Re- ski lli ng’ and ‘Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’.
2.6 Whi l e retai ni ng the practi cal defi ni ti on of
‘marketable skills’ for detailing the skill profile of the
I ndi an workf orce i n t he f ol l owi ng chapt er, t he
Commission recognizes the issue of skill acquisition in
its widest sense, to encompass education, pre-employment
training, on-the-job training, continuous learning and
retraining in the context of the linkages between skills,
productivity and growth.
Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The
Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link
2.7 I n contemporary analyses of systems of skill
development in developing countries, the commonly
raised issues are: 1) Developing effective skill development
and trai ni ng systems i n the i nterest of enhanci ng
productivity and sustaining high rates of growth, 2)
Changi ng ski ll requi rements of economi es that are
witnessing fast changes in the nature of economic activity
and work, 3) Matching skills to markets, 4) Financial
sustainability of different skill formation systems and
finally 5) Role of different agents (firms, private actors
and the government) in delivering skill and training
efficiently and effectively.
2.8 First, it is known that skills development is
i mportant because of i ts contri buti on to enhanci ng
productivity at the individual, industry and also national
levels. Enhanced skills enable individuals to be more
productive and potentially generate higher incomes.
Workforce skills make enterprises more productive and
profitable, and help national economies raise production
and creat e weal t h. Thi s t akes pl ace because of
complementarities that exist between physical capital and
human capital on the one hand and between technology
and human capital on the other. A higher level of skills
which results in a higher level of human capital formation
enables plants and machinery to be used more efficiently,
rai si ng the rate of return on i nvestments. Si mi larly,
wi t hout a ski l l ed workf orce, t he ret urns f rom
technological progress remain low. With the advancement
of technologi es, necessi tati ng a hi gh rate of labour
turnover across industries and occupations, adaptability
is crucial to keeping labour and capital employed and
maintaining competitiveness.
2.9 The case of several countri es i n East Asi a
demonstrates the necessity as well as possibilities in this
area for developing countries. Apart from universalizing
primary education, achieving very high levels of secondary
educati on and also vocati onal educati on wi thi n the
secondary education system, countries such as South
Korea, Singapore and Malaysia have achieved formal
training of the majority of their population as well as
high rates of employment of the trained workforce. A
vast volume of literature on the sources of sustained high
growth in these economies have located this growth in
‘endogenous’ processes that enable a hi ghly ski lled
workforce to adapt technology to country requirements,
innovate at the level of the enterprise and meet ambitious
targets in a short period of time. While many of these
systems were put into place at an early stage of their
contemporary development, with some of these countries
experiencing crisis, they also undertook overhauling of
systems in tune with the needs of a globalised economy.
I n other words, the need for the skill mix to change at
different levels of development and in response to different
degrees of openness was recognized and responded to.
2.10 In contemporary production systems, the demand
for skills has changed to some extent because of extensive
changes that economies have seen as a result of greater
i nt egrat i on wi t h t he worl d economy. I ncreased
competition and the introduction of I CT have prompted
enterprises to make fundamental changes in their internal
organi zati on and work practi ces, necessi tati ng the
existence and acquisition of specific skills in workforces
that are required to be increasingly adaptable and flexible.
I mproved access, uni versal basi c educat i on and
foundations of literacy offer essential first steps on the
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
6
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
path to becoming successful knowledge economies. But
knowledge economies demand not just more education,
but educati on and trai ni ng that are also better and
different. In the context of knowledge economy aspirations,
the challenge of educational and vocational reform is
therefore not just to increaseaccessor even raise conventional
tested achievements, but also to changethenatureand
improvethequality of learning, teaching and training so
that they address knowledge economy objectives.
2.11 Fast changing knowledge economies call for new
core competencies among all learners in the society. At
the heart of these are longstanding “soft skills” such as
communication, collaboration and teamwork. To these,
can be added others such as the ability to create, apply,
share and di st ri but e knowl edge; t o convert t aci t
knowledge into explicit and formally codified knowledge
that is easily transferable to others; to employ effortless
use of advanced information technology; to work in teams
that may be socially and psychologically heterogeneous;
t o have t he capaci t y t o re- ski l l and ret rai n as
ci rcumstances demand; to be able to parti ci pate i n
networks and develop the social capital that creates the
learning and develops the resilience to cope with change;
to cultivate a positive, opportunistic and entrepreneurial
orientation to change; and to become committed to
continuous and lifelong learning far beyond the years of
formal education. This effort to see a change in the skill
mix in fast changing economies has been recognized by
South Korea, whi ch has a Comprehensi ve Plan for
Lifelong Education and Learning, which allows local
communities in provinces to enter and exit the learning
and training process in line with the requirements of the
economy on the one hand and with their own need for
i mprovement. Si mi larl y, Si ngapore has made major
changes in its skill strategy through the introduction of a
National Continuing Education and Training Framework
and a Lifelong Learning Endowment Fund.
2.12 Second, it is well documented in the literature
that skill development is an area where typically markets
mi ght not del i ver opt i mum vol umes of ski l l t hat
economies need. This is because of ‘externalities’ in skill
and training provision, where if a private firm undertakes
skilling of its workers, it might not be able to reap the
benefits sufficiently if the worker leaves the firm. Another
firm, on the other hand, might benefit without bearing
the cost if the worker joins the firm. Even though the
specific industry will benefit if workers are trained for its
speci fi c needs, no parti cular pri vate fi rm mi ght be
interested in providing the skills and training, resulting
in its ‘under – provision’ if it is left entirely to market
forces. While this is an argument that is crucial for any
economy, this is considered to be especially relevant in
small firm contexts. I t is argued that the under-provision
of formal training found in small and microenterprises is
either due to ‘ignorance’ on the part of employers or
‘market failure’ due to a variety of supply and demand
side features such as their short-term perspective which
prevents the recognition of the longer term benefits of
trai ni ng. Therefore, even though there mi ght be an
explicit recognition of the need for skills enhancement,
the issues of who will provide it, where it will be provided,
who wi l l bear the costs and so on become cruci al
considerations.
2.13 Third, while skill development is where public
or collective institutions become necessary due to the
externalities mentioned above, where the basic stimuli
will come from to signal the extent of skill requirements,
i.e., whether it should be demand led or supply led, are
extremely important, particularly when we consider the
fi nanci ng aspect . Exi st i ng syst ems of formal ski l l
provisioning in most developing countries are found to
cover a very small proportion of enterprises and create
large supply- demand mi smatches, resulti ng i n ski ll
short ages even i n t he presence of si gni f i cant
unemployment. I n the context of ‘new’ needs bei ng
perceived in a globalised economy, these skill shortages
are considered to pose a potential hindrance to sustained
economic growth. The issue of matching skills to markets
has led to a call for dismantling existing systems of skill
provisioning in many countries or an overhaul of TVET
systems.
2.14 It is against this background that this report looks
at the overall picture of skill acquisition and development
and its link to employment and markets in the case of the
unorganised or informal sector in I ndia.
Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development –
Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector
2.15 I n I ndia, the discussion on the impact of existing
skill delivery systems and what needs to be done hinges
7
critically on two major characteristics of the workforce:
the preponderance of employment in the informal sector
of the economy and a very large proportion of youth in
the population, mostly belonging to the informal sector.
I t is also well known that the proportion of people who
have had access to some kind of formal skill acquisition
process is very low and that of those who have acquired
employment as a result of this is even lower. While these
aspects are presented in the next chapter, here we examine
the specific characteristics of informal workforce with
respect to the issues raised above.
2.16 This Commission’s work has highlighted the
salient features of the I ndian workforce and brought out
the structure of the large informal sector and workforce
in I ndia. I n order to be able to focus the discussion on
the skill needs of the informal sector and the workforce
engaged i n i t , we bri efl y present t hese st ruct ural
characteristics here.
2.17 The Commission has estimated that in 2004-
05, total employment (principal plus subsidiary) in the
I ndi an economy was 458 mi l l i on, of whi ch t he
unorganised sector accounted for 395 million, constituting
86 per cent of total workers. The Commission’s estimates
are direct ones from the NSSO, based on a consistent
definition of the unorganised sector (NCEUS 2007). Our
estimates showed that, between 1999-2000 and 2004-
05, of the total incremental employment generated, only
about 14 per cent was absorbed in the organised sector
while 86 per cent was in the unorganised sector. I n the
years to come, as the Eleventh Plan document points
out, the bulk of incremental employment is likely to be
created in the unorganised sector.
2.18 Within this unorganised sector, wage-workers
(i.e. those employed by others), constituted only 36 per
cent of the workers, and the remaining 64 per cent were
self employed.
2.19 While the agricultural sector still contributed
the largest numbers i n the unorgani sed sector, the
proportion of non-agricultural workers rose from 32 per
cent to 36 per cent between 1999-2000 and 2004-05.
Agriculture sector, in turn, is constituted by unorganised
workers who are self-employed (65 per cent) and casual
workers (35 per cent). Even in the non-agriculture sector,
nearly 72 per cent of the workers are in the unorganised
sector, an increase of 4 percentage points from 68 per
cent in 1999-2000. These workers, in turn, are mainly
the self-employed (63 per cent). The rest of the workers
in the non-agriculture unorganised sector are more or
less equally distributed between the regular (17 per cent)
and casual categories (20 per cent).
2.20 I n the same period, employment in the organised
sector of the economy increased by 8.5 million or 16 per
cent (from 54.1 million to 62.6 million), but the change
in organised or formal employment was nil or marginally
negative. Therefore, it was pointed out that theentire
increasein theemployment in theorganised sector over this
period hasbeen informal in naturei.e. without any job or
social security. TheCommission argued that thiscan betermed
asinformalisation of theformal sector, i.e., employment increase
consistsof regular workerswithout social security benefitsand
casual or contract workersagain without thebenefitsthat should
accrueto formal workers.
2.21 Three major structural features of employment
i n t he I ndi an economy were hi ghl i ght ed by t he
Commi ssi on. Fi rst , t he i nformal sect or i s hugel y
preponderant i n the I ndi an economy. Second, the
increases in employment have been of the informal kind.
Thi rd, wi thi n the i nformal sector, there i s a huge
preponderance of self-employed workers. I nformalisation
of the workforce is probably a feature that is here to stay,
making the discussion below especially relevant.
2.22 Another structural feature that the Commission’s
work has highlighted is the heterogeneity of the informal
sector i tself. I t analysed i n detai l the i nci dence and
conditions of different types of informal workers, i.e.,
wage workers in the unorganised sector, self-employed
workers in the unorganised sector and unprotected wage
workers in the organised sector. Within the category of
the self employed, there are different categories such as
persons who operate farm or non-farm enterprises or
engaged in a profession or trade, either on own account,
individually or with partners, or home-based workers
which include unpaid family workers also. The former
has been referred to as independent self employed workers
and the latter as dependent. The Commission estimated
that within the 395 million people that constituted the
unorganised sector in 2004-05, about 344 million were
self- employed, of which 69 million were in the non-
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
8
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
agricultural sector. As a special category in terms of poor
conditions of work and high levels of vulnerability, home-
workers were estimated at nearly 8.2 million workers
(or 12 per cent of the non-agricultural self employed
workers) of whom about 4.8 million were women.
2.23 What this highly heterogeneous picture of the
informal sector points towards is the fact that the nature
and conditions of work in the informal sector are very
different, and, therefore, lead to a wide range of training
needs, requiring analysis that is different from that of the
formal sector. Different kinds of workers in the informal
sector are employed in production units with widely
di fferi ng features and i n a wi de range of economi c
activities. They consist of different kinds of people (i.e.
workers, producers, employers) in service activities or
producing under varying types of employment relations
and production arrangements. The basic questions of skill-
building and training for whom, for what, what kind of
training and how it can be best provided have somewhat
different dimensions given this diversity in the informal
sector. The Commission wishes to lay stress on this aspect,
something that has been relatively neglected in the vast
literature on existing skill development systems in I ndia.
2.24 I n the international literature on training needs
and possibilities in the informal sector of developing
countries, several sets of issues have been identified. The
first relates to motivations of the people in the informal
sector for training. Those working in the informal sector
often see little need for further skills acquisition and have
little knowledge about where to go even after the skills
are acquired. This is true even for enterprises in the
informal sector, often dismissed as ‘ignorance’ on the part
of enterprise owners as well as workers. The principal
problems of poor literacy and numeracy often prevent
informal sector workers from participating successfully
in conventional training programmes, even if they perceive
the need. Training can also be prohibitive in terms of
costs. Even token fees for the training can form a real
barrier for participating in training. Working hours are
often long and any time off from the productive work
means loss of income, which affects the willingness to
participate in a training programme, even if it is relevant
and easily available. I t is also unlikely that informal sector
entrepreneurs will provide their workers time off for
training. I n fact, skilling workers may appear threatening
for the entrepreneurs because skilled and trained workers
may demand higher pay, leave to work for competitors
or establish enterprises themselves. The motivation issue,
therefore, has to be kept in mind when designing training
programmes for the informal sector.
2.25 The second set of issues relates to who require
training and for what. Broadly, we can distinguish between
own- account workers, workers i n ent erpri ses and
entrepreneurs. I n the informal sector, apart from the
training needs of workers of different kinds, which might
be essential for increased productivity, most of those who
fall under the category of entrepreneurs may themselves
need training and face the same kinds of motivational
problems as those already mentioned above. I t has often
been argued t hat non- speci al i zat i on (avoi di ng
concentrating on a single trade) is the most commendable
strategy for those who exist on the broad “underside” of
the labour hierarchy and education and training need to
be able to cater to them because, very often, survival
requires constant search for new sources of income and
the will and ability to be as flexible as possible. I n the
context of self- help organizations and networks, such
training would imply that learning is not only generated
in the process of production, but also takes place through
ot her ext ernal mechani sms such as `l earni ng by
negotiating’ and `searching for openings’. Learning would
imply a process of becoming aware of the potential of a
network or cluster of enterprises to solve problems, and
acqui ri ng t hose compet enci es t hat are needed t o
implement solutions. Additionally, the training would need
to build up capabilities to shift from one profession to
another, to obtain the freedom to make choices without
losing status.
2.26 Third, the requirements in the informal sector
in a range of activities or in micro-enterprise based
production are a combination of ‘social competencies’ and
technical skills that might be industry or trade based.
Social competency, defined as ‘the ability to co-operate,
communicate and represent collective interests’ is central
to conducting a business as much as the technical aspects
of the industry itself. All training programmes for such
enterprises have to necessarily also develop literacy and
cognitive competencies, as they facilitate the organisation
of economi c act i vi t i es and are used t o devel op
communi cat i ve ski l l s. Furt her, even wi t hi n smal l
9
enterpri se based entrepreneurshi p, two di sti ncti ve
categories are ‘survivalist’ entrepreneurs, lacking even basic
literacy and women entrepreneurs who, in addition to
most often lacking basic literacy and numeracy, face
specific problem of mismatch between home duties and
training. Training would involve, for all sets of people, a
combination of ‘social competencies’ and technical skills
and at different levels. For example, in many categories, a
range of skills that enable mere survival or the ability to
shift professions are essential as argued above. Systems
of skill development, keeping informal sector workers in
mind, would need to provide the whole range of these
skills, from basic literacy and numeracy to technical
training. This, in turn, is unlikely to be taken up by the
private sector, as the workers concerned are at the bottom
rung in the production hierarchy and encounter the worst
terms of trade. I n such cases, directed skill programmes
may be focusing on a group approach and can not only
enhance their productivity but also enable them to bargain
for better terms.
2.27 Underlying all the issues raised above, however,
especiall y in the case of the informal sector, is a basic
questi on: do the ski l l s that are percei ved or found
necessary in the informal sector have to be ‘formally’
provi ded? I n other words, should ski ll development
programmes for all these sets of workers be subject to
processes of trainer accreditation and trainee certification?
Should these be done at a centralized, nation-wide or
state-wide level or should it be decentralized?I s the mode
of working of the existing systems of informal on the job
ski l l acqui si t i on t hrough t he t radi t i onal met hods
sufficient?Apart from recognizing the heterogeneity of
the informal sector, an understanding of the role that
different segments of the sector play in the economic
process is crucial to be able to provide an answer to this.
This report puts forward concrete recommendations that
deal with the centralization-decentralization issue as well
as the formal certification versus informal provision, but
here we flag off the analytical issues that are important
in this discussion.
2.28 The previous section outlined the rationale for
skill development in general and noted that it has been
known to enhance productivity at the individual, industry
and national levels. However, in the case of I ndia, the
results of studi es that exami ne thi s relati onshi p are
ambiguous. This ambiguity notwithstanding, there are
some reasons why one might argue that formal skill
acquisition in the informal sector, whether it is through
general education, vocational education or work-place
related skill acquisition with certification, can lead to
enhanced product i vi t y. Fi rst , t he i nf ormal sect or
contributes substantially to national output in I ndia and
the organizational structures of the informal sector are
very important in determining the structure of national
output. I n a situation where production technologies are
changing very rapidly in both the manufacturing and
service sectors, entrepreneurs and workers are very often
required to adapt to changes and also acquire new skills.
With changing technologies, the ability to cope with
change is given by the skill base of the economy which
has to expand, permitting increase in productivity across
the board. Strengthening and widening of the education
system as well as provision of skills to be able to adapt
and change production systems or switch jobs become
essential even for informal sector entrepreneurs and
workers. For example, in a range of industries and services
that use I CT, it might be broad based computer skills,
communication and cognitive skills and knowledge of
English that might be needed to access the labour market
or even continue to undertake production in specific
industries. Although the level at which skills have to be
i mparted mi ght not be very advanced, certi fi cati on
becomes very essential in order to ensure minimum levels
of skill that have the potential to enhance productivity.
2.29 Second, while the informal sector contributes
substantially to national output, the heterogeneity of the
sector results in a large range of vintages of technology
used and products produced. Even across different market
and consumer segments, qual i ty standardi zati on i s
essential to ensure effective marketing of the products of
the sector and upgradation of skills is essential, along
with other inputs, to achieving standardization. The
viability of large parts of the informal economy might
itself be contingent on the existence and provision of
formal, standardised skills.
2.30 Together, the above two aspects suggest that for
many in the informal sector, the acquisition of formal
skills might be a necessary condition to gain entry into
segments of the labour market that can potentially generate
greater income or to be part of viable production systems
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
10
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
that can potentiall y result in better livelihoods. The
Commission’s analysis in the rest of this report strongly
suggests that the formal systems of skill imparting are
essential for the informal sector.
2.31 I t is reasonably well established that in I ndia,
formal skill acquisition, through VET systems, has been
hardly successful in helping those in the informal sector
to get jobs, even at the very low levels at which they have
been provided.
2.32 Literature looking into the reasons for low levels
of skill formation in developing countries, identify the
state run vocational education and training systems as
being too supply driven and far-removed from market
demand. I t is suggested that they should be responding
to market demand with a greater role for the private sector
and for enterprises. There is an assumption here that by
vi rtue of thei r cl oser contact wi th the market, an
employer-operated training could be more efficient with
pri vate fi rms and smal l enterpri ses at thei r centre,
coordinated through business associations and other such
intermediary institutions. To use existing patterns of
market demand alone to signal what the training needs
of the economy are and also determine the outcomes of
training initiatives will, however, bypass most members
in the informal sector. The extent and quality of training
is constrained by the nature of the economy and level of
enterprise development. The largest part of the informal
sector consi sts of workers/ enterpri ses where pri vate
i ni ti ati ve woul d not be forthcomi ng for ski l l s up-
gradation, as they are either out of the loop vis-à-vis the
formal sector or are involved in ways that provide the
cushion against adversity for the formal sector. I n these
cases, leaving them as they are, forming the base of the
low cost economy, will serve the needs of the organised
sector best. Further, even if private actors perceive the
need for training, they might be too small in size to garner
resources to provide/undertake training.
2.33 There is scope for upgradation in a range of
informal sector activities where existing markets will not
generate conditions conducive for training. These markets
can be tapped only once the interventions have been made,
requiring the active participation of public agencies. I n a
sense, therefore, a distinction has to be made between
existing patterns of demand and potential demand which
does not get expressed or is even perceived as existing. I n
fact, thi s t ypi cal l y exi sts i n servi ces l i ke cl eani ng,
housemaids and so on which are often considered low
quality, low productivity work.
2.34 Despite all their weaknesses, we stress strongly
that there is a need for public technical and vocational
education establishments or other forms of collective
organizations to play a definite role in finding new ways
of teaching and learning to make them more relevant to
the informal sector’s needs. Given the large numerical
presence of such self-employed workers, as has been
pointed out earlier, this point is especially relevant.
11
Skill Profile of the Indian
Workforce
3
3.1 This chapter looks at the overall picture
of ski l l acqui si ti on and devel opment of the
unorganised or informal sector in I ndia. I n this
report, , , , , we have used different measures of skill.
The first is the level of education of the individual
and the second being the extent of vocational
training. Vocational training is broadly defined
as training that prepares an individual for a specific
vocation or occupation. The main objective of
vocational education and training is to prepare
persons, especially the youth, for the world of work
and make them employable for a broad range of
occupati ons i n vari ous i ndustri es and other
economic sectors. VET aims at imparting training
to persons in specific fields through providing
si gni fi cant ‘hands on’ experience in acquiring
necessary skills, which make them employable
or creat e f or t hem opport uni t i es of sel f -
employment. Vocational training may be non-
formal or formal . Si nce acqui si ti on of ski l l s
through non-formal training is, by definition
unstructured and since it is difficult to have a clear
definition of skills, it is very likely the case that
t he surveys on whi ch our anal ysi s i s based
underesti mate the extent of non-formal ski ll
acquisition, especially in certain sectors such as
agriculture. This caveat should be borne in mind
while using the results shown below.
3.2 There has been no special effort on the
part of the government to collect data on skills
regularly as part of the administrative process. The
main source of data at the national level is the
Directorate General of Employment and Training
(DGE&T), Ministry of Labour. The other sources
of data on skills are the recent ad hoc surveys of
t he Nat i onal Sampl e Survey Organi zat i on
(NSSO). The NSSO has asked questions relating
to possession of skills in surveys of 1993-94, 1999-
2000 and 2004-05. Each survey had a different
scope, but taken together they give us some idea
of the skill profile of the population.
3.3 This chapter bases itself on information
regarding the level of marketable skills, both
formal and informal, that are possessed by people
i n I ndi a accordi ng t o NSSO surveys and
assessments of number of people trained through
the various formal vocational skill acquisition
programmes. I t attempts to evaluate the level and
type of skill availability with estimates of the level
and nature of demand for skills in the economy. I t
also looks at the relationship between the level of
skills and educational profile of the workforce and
between skill availability, education and poverty.
Foundational Requirements: Literacy,
Numeracy, Education
3.4 Educat i on may be t reat ed as t he
foundation for acquiring formal skills and also as
creating generic skills. Education prepares a person
to acquire different types of skills and higher forms
of cogni ti ve ski lls may requi re hi gh levels of
educati on. Thus, general educati on i s hi ghl y
12
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
important in itself. However, we do not see general
education as a substitute for skill acquisition since the
latter prepares people to carry out specific tasks. I t is,
however, important to recognize the complementary
relationship between different levels of education and
different types of skills. I n other words, some level of
education may be seen as foundation for acquiring a
specific type of skill. In order to emphasize on skill training
it is important to have an idea whether the people have
the basic foundation in terms of literacy and numeracy as
well as absorptive capacity in terms of a particular level
of education for a specific type of formal training. Thus,
level of educational attainment of the population tells us
about the generic and foundational skills residing in a
population.
3.5 I n 2004-2005 the share of population of 15 years
and above who were illiterate or below primary education
comprised 47 per cent (Table 3.1). This share was higher
among women (58 per cent) and in rural areas. While
13 per cent of population had primary education 16 per
Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
T a b le 3 . 1 : E d u ca tio n a l Atta in m e n t o f P e rso n s (2 0 0 4 -2 0 0 5 )
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban T TT TTotal otal otal otal otal
Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
15 and Abo 15 and Abo 15 and Abo 15 and Abo 15 and Abov vv vve e e e e Y YY YYears ears ears ears ears
I lliterate &
Below Primary 44.5 67.7 56.0 19.7 35.6 27.1 36.7 58.3 47.2
Primary 15.3 10.8 13.1 12.6 12.1 12.3 14.4 11.2 12.8
Middle 19.1 11.3 15.3 19.4 16.8 18.2 19.2 12.9 16.2
Secondary &
Above 21.1 10.2 15.7 48.3 35.6 42.3 29.7 17.6 23.8
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
15 -2 9 15 -2 9 15 -2 9 15 -2 9 15 -2 9 Y YY YYears ears ears ears ears
I lliterate &
Below Primary 27.8 47.7 37.6 13.7 20.1 16.6 23.2 39.6 31.0
Primary &
Middle 43.9 33.8 38.9 37.6 33.2 35.6 41.8 33.6 37.9
Secondary 15.4 10.3 12.9 19.1 17.7 18.5 16.6 12.5 14.6
HS & Above 12.9 8.1 10.6 29.6 29.0 29.3 18.4 14.3 16.4
Technical 1.7 1.0 1.4 6.7 4.4 5.7 3.4 2.0 2.7
T TT TTotal otal otal otal otal 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
cent had middle level of education. The share of educated
persons i.e. those with secondary and above was higher
at 24 per cent. The share of educated persons is higher
as expected among men and in urban areas.
3.6 One can expect a certain pace of cohort-wise
i mprovement , but even among t he 15 - 29 years
population, in 2004-05, educational attainment was still
quite low with 31 per cent of them having below primary
level of education and 38 per cent population with primary
or middle level education only (Table 3.1). There is
some improvement over the years. I n 1993-94, in the
age group 15-29 years, the share of persons educated up
to below primary was 45.2 per cent while 32 per cent
had passed primary or middle classes.
Workforce and Educational Attainments
3.7 The Commission has, in its 2007 Report on
Working Conditions, analysed the educational status of
workers in the organised and unorganised sectors, formally
and informally employed workers, by social and gender
13
status etc. The educati onal status of workers i n the
organised and unorganised sector of the economy is given
i n Fi g 3.1. The Commi ssi on, i n the above report ,
expressed the view that low levels of education and skills
are one of the primary reasons leading to a hierarchy of
work relationships, segmentation of the workforce and
vulnerabi li ty. Improving theaccess of all sections of the
population to quality education at least up to thesecondary
level must thereforebehighlighted asoneof themot urgent
developmental requirements.
Skill Base of Population in 1993-1994
3.8 The National Sample Survey on Employment
and Unemployment, 50th Round, 1993-94 canvassed a
separate question on skill along with the questions on
education and technical education. The question on skill
involved asking the respondents to choose from a given
list of 31 skills types including an option ‘No skill’ and a
F ig . 3 . 1 : E d u catio n al Attain m e n t o f Wo rk e rs Ag e d 1 5 & Ab o ve b y S e cto rs, (2 0 0 4 -2 0 0 5 )
Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
miscellaneous category of ‘Others’.
1
.The above question
enabled a categorisation of the population into those with
skills and those without. On the other hand, it enabled
analysis of the distribution of the population among select
skill types and identified the predominant skills. Besides
as it pertained to the entire population the skill of all
segments of the population could be ascertained. However,
the question on skill had two limitations. Firstly, it limited
the skills to be chosen from a select 30 categories, leaving
no scope for individuals to specify skills outside the given
list, leaving them with no option other than to classify
themselves with ‘others’. Secondly, the skills asked in
the 50th round were more in line with traditional skill
set, barring certain exceptions. The skill set associated
with the newer trades were not adequately represented.
The survey did canvass a separate question on technical/
vocational education leading to certificates, diplomas or
1
The various skills included in the list were Stenographer; machineman; fitter, die-maker; electrician; repair of electronic goods;
motor vehicle driver; fisherman; miner, quarryman; spinner including charkha operator; weaver; tailor, cutter; carpenter; mason;
bricklayer; shoemaker, cobbler; moulder; blacksmith; goldsmith; silversmith; boatman; potter; nurse, midwife; basket maker,
wick product maker; toy maker; brick maker; tile maker; bidi maker; book-binder; barber; mud-house builder & thatcher and
Others.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
14
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
degrees which could be used to glean information on
upper end skill acquisition.
3.9 Analysis of this data reveals that nearly 90 per
cent of the total population did not have any skills.
Approximately 10 per cent of population reported as
having skills (91.2 million). The proportion of skilled
workers in the workforce was very low (Fig 3.2). I n
rural areas, only about 10 per cent of the men (34.2
million) and 6.3 per cent of the women (20.3 million)
possessed specific marketable (formal or non-formal)
skills. The percentages are reported higher in urban areas,
but still very low — only 19.6 per cent for men (24.3
million) and 11.2 per cent for women (12.4 million).
However, as discussed earlier, these only refer to the lower
level skills and not the skills of professional and more
qualified workers.
3.10 Among t he popul at i on wi t h ski l l s, t he
predominant group was tailors (17.1 per cent), followed
by weavers (8.2 per cent). Other skills with share above
5 per cent were motor vehicle drivers, stenographers and
bidi makers (Appendix Table A 3.1). Some other skills
with a relatively high share of more than 2 per cent of
the total were: carpenters, masons, mud house builders/
thatchers, fisher men and basket/wick product makers.
3.11 For purpose of analysis the skills reported in the
50th round have been classified by us into predominantly
f ormal and predomi nant l y i nf ormal . The general
educational attainment levels of the persons with skills
F ig . 3 . 2 : P e rce n tag e D istrib u tio n o f P e rso n s with M ark e tab le S k ills, (1 9 9 3 -9 4 )
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
was examined and taken as a guideline to classify the
skills. The distribution of the population was explored to
determine the educational levels. The skil ls wherein
majority of population were illiterate & below primary
educated and primary & middle educated, while low share
of population were educated at secondary and above level
were considered as skills which were predominantly
informal. The skills wherein a substantial proportion of
population had even secondary and higher education were
classified as predominantly formal. The only exception
was nurses and mi dwi ves whi ch was cl assi fi ed as
predominantly informal for rural and predominantly
formal in urban areas.
3.12 Based on the above analysis the skills considered
predominantly informal are: fisherman; miner, quarryman;
spinner including charkha operator; weaver; tailor, cutter;
carpent er; mason; bri ckl ayer; shoemaker, cobbl er;
moulder; blacksmith; goldsmith; silversmith; boatman;
potter; midwife (rural); basket maker, wick product maker;
toy maker; brick maker; tile maker; bidi maker; book-
bi nder; barber; mud- house bui lder & thatcher and
Others. Ski lls consi dered predominantly formal are:
Stenographer; machine man; fitter, die-maker; electrician;
repair of electronic goods; motor vehicle driver and
midwife (urban). According to our categorization, in
1993-94, approximately 2 per cent of the population had
predominantly formal skills, while 8.2 per cent of the
popul ati on had predomi nantl y i nformal ski ll s. The
15
corresponding shares among the labour force were 4.2
and 15.3 per cent. (Table 3.2)
Skill Base of Unemployed 1999-2000
3.13 The NSSO Sur vey on Empl oyment and
Unemployment (1999-2000) had sought information on
the skill levels of the unemployed only. The results showed
that i n rural areas, onl y 16.4 per cent of the mal e
unempl oyed workers and 18.8 per cent of femal e
unemployed workers possessed specific marketable skills
(Fig. 3.3). The percentage of males unemployed in urban
areas was almost identical to that of rural areas. However,
a significantly higher proportion of about 32 per cent of
the female unemployed workers in the urban areas are
reported to possess some skills. Among the rural male
unemployed, 17 per cent possessed skills of stenographer,
12 per cent of drivers (vehicle or tractor), 9 per cent of
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
T ab le 3 . 2 : S k ills o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 , (1 9 9 3 -9 4 )
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban T TT TTotal otal otal otal otal
Ski ll Ski ll Ski ll Ski ll Ski ll Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
Formal 3.9 0.5 2.2 9.7 2.7 6.4 5.6 1.1 3.4
I nformal 10.6 10.7 10.7 16.3 15.0 15.7 12.3 11.9 12.1
No Skill 85.5 88.8 87.1 74.0 82.3 77.9 82.1 87.0 84.5
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
F ig . 3 . 3 : P e rce n tag e D istrib u tio n o f th e U n e m p lo ye d b y M ark e tab le S k ill, (1 9 9 9 -2 0 0 0 )
mechanic and 8 per cent of electricians. Of the female
unemployed in rural areas, 37 per cent possessed tailoring/
cut t i ng ski l l s whi l e 22 per cent coul d work as
stenographers. Among the urban unemployed males, 18
per cent could work as stenographers, 9 per cent as
mechanics, 8 per cent as electricians and 7 per cent as
drivers. Of the females unemployed in urban areas, 30
per cent could work as stenographers and 22 per cent as
tailors. More than 5 per cent of each of the four categories
of unempl oyed had computer programmi ng ski l l s.
However, on the whole more than 18 per cent of the
unemployed possessed marketable skills.
Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005
3.14 The NSS round 2004-05 collected information
about the skill profile of the youth (15-29 years), with
S SS SSour our our our ource: ce: ce: ce: ce: Computed from NSS 55th Round, 1999-2000, Employment-Unemployment Survey.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
16
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
enquiries as to whether the respondents had or were
undergoing formal or non-formal training. Non-formal
training includes both hereditary and other training.
When the expertise acquired enabled him/her to carry
out the trade or occupati on of thei r ancestors over
generations, it was considered a ‘hereditary’ source. Any
other ‘non-formal’ vocational training received from other
than the household members to pursue a vocation, whether
hereditary or not, was considered ‘other’ sources. Formal
vocational training is the training that took place in
educational and training institutions which followed a
structured training programme and led to recognized
certi fi cates, di plomas or degrees. Formal vocati onal
training had the following characteristics: (i) Structured
training programme towards a particular skill, and (ii)
Certificate / diploma / degree received had recognition
by accreditation agencies..
3.15 The 15-29 years age-group comprised 27 per
cent of the total population of 1089 million as on 1st
January, 2005 which is marginally lower than in 1993-
94. I t is estimated that on the whole, only 11.5 per cent
of those in this age-group 15-29 have received (or were
receiving) any training, whether formal or informal. Of
those with informal or formal skill training, 33 per cent
2
I n 1993-94, approximately 3.4 per cent of persons in the age group of 15-29 years had predominantly formal skills while 12
per cent of population had predominantly informal skills (Table 3.2). These cannot be strictly compared with 2004-2005 as the
criteria of skill are different.
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
T ab le 3 . 3 : S k ill L e ve ls o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 in 2 0 0 4 -0 5 (in m illio n s)
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban Rural + Urban Rural + Urban Rural + Urban Rural + Urban Rural + Urban
Skill Skill Skill Skill Skill Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
Receiving formal
training 1.1 0.5 1.5 1.7 0.8 2.4 2.7 1.2 3.9
Received formal
training 1.5 1.2 2.7 2.6 1.8 4.4 4.1 3.1 7.1
F FF FFor or or or ormal mal mal mal mal 2.6 1.7 4.3 4.2 2.6 6.8 6.8 4.3 11.1
Hereditary 5.9 3.1 9.0 1.5 0.7 2.2 7.4 3.8 11.2
Others 3.8 2.9 6.7 3.0 1.3 4.3 6.8 4.3 11.0
I nformal I nformal I nformal I nformal I nformal 9.6 6.1 15.7 4.6 2.0 6.6 14.2 8.1 22.3
No training 88.3 88.9 177.3 40.4 36.1 76.5 128.7 125.0 253.7
T TT TTotal otal otal otal otal 101.4 101.4 101.4 101.4 101.4 97.7 97.7 97.7 97.7 97.7 199.1 199.1 199.1 199.1 199.1 49.4 49.4 49.4 49.4 49.4 41.0 41.0 41.0 41.0 41.0 90.4 90.4 90.4 90.4 90.4 150.8 150.8 150.8 150.8 150.8 138.7 138.7 138.7 138.7 138.7 289.5 289.5 289.5 289.5 289.5
have received or were receiving formal training accounting
for 11 million (Table 3.3). A total of 3.9 million persons
in this age group (about 1 per cent of the total) were
receiving formal vocational training while about 2 per
cent received formal vocational training, constituting about
3.8 per cent of the population with formal training (Fig.
3.4).
3.16 Gender differences in skill training are quite
significant among the trained, both the informally and
the formally. A lower proportion of women (8.9 per cent)
than men (13.9 per cent) in both the rural and urban
areas received vocational training (formal and informal)
(Fig. 3.5). Formal skills were confined to 3.1 per cent
women in this age group, compared to 4.5 per cent men.
About 5.8 per cent women had informally acquired the
skills compared to 9.4 per cent men. (Fig. 3.4).
2
3.17 Urban/rural location provides another element
of difference. While only 2.1 per cent of the youth
population had acquired (or was acquiring) formal skill
training in rural areas, this proportion was much higher
at 7.6 per cent in urban areas. This difference, however,
does not persist with respect to informal skill acquisition
(which is in fact somewhat higher at 7.9 per cent of the
17
F ig . 3 . 4 : P e rce n tag e o f P o p u latio n with S k ills in th e Ag e G ro u p 1 5 -2 9 , (2 0 0 4 -0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
F ig . 3 . 5 : P e rce n tag e o f P o p u latio n with S k ills in th e Ag e G ro u p 1 5 -2 9 b y P lace o f R e sid e n ce , (2 0 0 4 -0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
youth in rural areas, compared to 7.3 per cent in urban
areas).
3.18 Across the states as well, the pattern of skill
acquisition varies very significantly. We have focused
(Table 3.4) on formal skill acquisition. The largest share
of youth with formal skills was in Kerala (15.5 per cent),
followed by Maharashtra (8.3 per cent), Tamil Nadu
(7.6 per cent), Himachal (5.60 per cent) and Gujarat
(4.7 per cent). The lowest incidence of formal training
was in Bihar (0.5 per cent). Among those trained or
undergoing formal training, Maharashtra accounted for
21.7 per cent. Kerala and Tamil Nadu had more than 10
per cent share in the skilled youth with formal skills.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
18
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Gujarat and Andhra Pradesh too have a relatively higher
share of skilled population in 15–29 age groups. Thus,
the southern and western states form a continuous zone
wherein the share of population with formal skills is
relatively high. Together the six states accounted for 63
per cent of the formally trained people. These are primarily
the states which have more industries, higher levels of
educat i on, and a hi gher avai l abi l i t y of t rai ni ng
infrastructure and training capacity both in the public
and private sectors.
Formal Training in Unorganised & Organised
Sectors
3.19 I n I ndia, the discussion on the impact of existing
skill delivery systems and what needs to be done hinges
critically on the characteristics of the workforce, an
overwhelming proportion of whom is employed in the
informal sector of the economy. The estimates of formal/
organised and informal/unorganised sector workers as
per 55
th
and 61
st
Rounds NSSO Surveys show that more
t han 86 per cent of t he empl oyment was i n t he
unorganised sector. The Commission has estimated that
135 million workers in the unorganized sector were in
the age group 15-29. Among the 5.4 million workers
who received formal training in this age group, 3.4 million
workers, (63 per cent of the total trained people) belonged
to the unorganised sector. This shows that the organised
sector, for one or the other reason, is unable to absorb a
majority of the formally trained youth who find a place
in the unorganised sector. Given the characteristics of
the formally trained at this point of time, these persons
undoubtedly form an upper segment of the unorganised
workforce.
3.20 Among the informally trained, 17 million were
in the unorganised sector, compared to 1.9 million in the
organised sector. As a percentage of the workforce, only
2.5 per cent of the total unorganised sector workers had
formal training while 12.5 per cent had non-formal
training. I n the organised sector, 11 per cent workers
had formal training and another 10.4 per cent had informal
training (Table 3.5). I t appears that a range of formal
skills can be absorbed both in the upper segment of the
Source: Source: Source: Source: Source: Computed from unit level data, NSS 61st Round, 2004 -
2005, Employment-Unemployment Survey, adjusted for population.
T ab le 3 . 5 : P e rce n tag e o f Wo rk e rs in Ag e -g ro u p
1 5 - 2 9 Ye ars b y Vo catio n al T rain in g S tatu s
(2 0 0 4 -2 0 0 5 )
Usual Status Usual Status Usual Status Usual Status Usual Status F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal
Male Male Male Male Male
Unorganised 2.6 12.9 15.4 (86.9)
Organised 10.1 10.7 20.8 (13.1)
Total 3.6 12.6 16.1
Female Female Female Female Female
Unorganised 2.3 11.7 14.03 (91.5)
Organised 14.2 9.4 23.61 (8.5)
Total 3.3 11.5 14.84
Persons Persons Persons Persons Persons
Unorganised 2.5 12.5 15.0 (88.4)
Organised 11.0 10.4 21.4 (11.6)
T TT TTotal otal otal otal otal 3.5 3.5 3.5 3.5 3.5 12.2 12.2 12.2 12.2 12.2 15.7 15.7 15.7 15.7 15.7
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round
2004 - 2005, Employment-Unemployment Survey.
T ab le 3 . 4 : P e rce n tag e o f P e rso n s in
Ag e -g ro u p 1 5 - 2 9 Ye ars with F o rm al T rain in g
am o n g th e S tate s, (2 0 0 4 -2 0 0 5 )
State State State State State Statewise distribution Statewise distribution Statewise distribution Statewise distribution Statewise distribution Percentage of Persons Percentage of Persons Percentage of Persons Percentage of Persons Percentage of Persons
of Persons with of Persons with of Persons with of Persons with of Persons with with F with F with F with F with For or or or ormal mal mal mal mal
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining aining aining aining aining T TT TTr rr rraining to aining to aining to aining to aining to T TT TTotal S otal S otal S otal S otal State tate tate tate tate
(Per cent) (Per cent) (Per cent) (Per cent) (Per cent) Population Population Population Population Population
J&K 0.4 2.0
Himachal
Pradesh 1.0 5.6
Punjab 2.8 4.1
Uttaranchal 0.8 3.9
Haryana 2.8 4.5
Delhi 1.7 4.1
Rajasthan 2.5 1.7
Uttar Pradesh 6.9 1.7
Bihar 0.8 0.5
Assam 0.8 1.4
West Bengal 6.9 3.2
Jharkhand 0.8 1.3
Orissa 1.9 1.9
Chhatisgarh 2.0 3.5
Madhya Pradesh 3.4 2.2
Gujarat 6.6 4.7
Maharashtra 21.7 8.3
Andhra Pradesh 6.6 3.2
Karnataka 4.6 3.1
Kerala 12.2 15.5
Tamil Nadu 11.3 7.6
North-east 0.4 1.3
Union Territories 1.3 12.6
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 3.9 3.9 3.9 3.9 3.9
19
unorganised sector as well as the organised sectors, and
due to reasons of employment, a majority of such workers
are absorbed in the unorganised sector. Later in this
chapter we identify the characteristics and spread of skilled
workers across the organised and unorganised sectors.
3.21 Among the youth in the age group 15 to 29
years about 53 per cent were workers, 3 per cent were
unemployed, 20 per cent attended educational institutions
and 24 per cent were non-workers. While 11.5 per cent
of all youth received vocational training, about 17 per
cent of the unemployed and 16 per cent of the workers
did so. About 22 per cent of the regular workers and 16
per cent of the self employed received training (Fig 3.6).
Across employment status, formal training is the highest
among regular workers, followed by the self-employed,
and lowest among the casually employed. Non-formal
training is, however, the highest among the self-employed
followed by the regularly employed and then the casually
employed. I t is noteworthy that the difference in informal
training status across activity status is much smaller than
formal training status.
3.22 This pattern replicates itself across both the
unorganised and organised sectors, though the level of
formal as wel l as overal l trai ni ng i s hi gher i n the
organised sector.
3.23 The share of those with formal skills across
industrial categories also indicates that there are certain
industries, in both the unorganised and organised sectors,
F ig . 3 . 6 : S k ills o f Wo rk e rs (1 5 - 2 9 ye ars) b y E m p lo ym e n t S tatu s & S e cto r (2 0 0 4 -2 0 0 5 )
SE= Self-employed; RW = Regular Workers; CW = Casual Workers
Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
which absorb more formal training. This is evident by
the fact that the share of workers with formal skills is
higher in Health & Social Work, Real Estate, Finance,
Education and Public Administration (Appendix Table
A 3.2). I t is however interesting to note that the shares
of the formally trained in a few sectors such as education,
public administration and construction are estimated as
being higher in the unorganised sector. Although formal
skills are more prevalent in the organised manufacturing
sector, workers with any skill are more prevalent in the
unorganised sector. The analysis also shows that the share
of those with formal skills is negligible in several sectors
i ncl udi ng agri cul ture and pri vate househol ds wi th
employed persons.
3.24 I ndustries in which formal skills are low but
the percentage of workforce with any skills is quite high,
such as manufacturing, construction, trade, hotels, and
community and personal services are clearly those where
there is prima facierequirement of developing expanded
formal training systems.
Education & Skill Acquisition
3.25 I f education is examined in conjunction with
training, a pattern emerges. Non-formal training is higher
among those wi th lower levels of educati on (up to
middle) and declines thereafter. But the proportion of
formally trained persons is higher among the higher
educated youth. The incidence of formal skill training
was only about 0.2 per cent among the illiterate youth.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
20
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
This rises to 17.5 per cent in the case of those with
graduate and above formal educati on. (Tabl e 3.6).
Difference by gender in this pattern is not high, though
men at all levels of education tend to have a higher
incidence of training.
S SS SSour our our our ource: ce: ce: ce: ce: Source: Computed from unit level data, NSS 61st Round, 2004 - 2005, Employment Unemployment Survey, adjusted for
population.
T ab le 3 . 6 : P e rce n tag e o f P e rso n s in 1 5 - 2 9 Ye ars with Vo catio n al T rain in g b y E d u catio n & G e n d e r
(2 0 0 4 -2 0 0 5 )
Educational Educational Educational Educational Educational F FF FFor or or or ormal mal mal mal mal Non- Non- Non- Non- Non- T TT TTotal otal otal otal otal F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal
Attainment Attainment Attainment Attainment Attainment formal formal formal formal formal ( (( ((W WW WWith ith ith ith ith S SS SSkil kil kil kil kill) l) l) l) l) ( (( ((W WW WWith S ith S ith S ith S ith Skil kil kil kil kill) l) l) l) l) ( (( ((W WW WWith S ith S ith S ith S ith Skil kil kil kil kill) l) l) l) l)
Levels Levels Levels Levels Levels
Males Males Males Males Males Females Females Females Females Females Persons Persons Persons Persons Persons
I lliterate &
Below Primary 0.3 10.7 11.0 0.2 6.4 6.7 0.2 8.1 8.3
Primary 0.6 12.2 12.7 0.5 6.7 7.3 0.6 9.7 10.3
Middle 1.2 10.6 11.8 1.5 6.4 8.0 1.3 8.9 10.2
Secondary 4.1 8.1 12.2 3.2 5.0 8.2 3.7 6.8 10.6
Higher Secondary 9.8 5.6 15.4 7.3 3.5 10.8 8.7 4.7 13.5
Diploma/
Certificate 70.4 2.9 73.3 68.3 2.7 71.0 69.7 2.8 72.5
Graduate &
Above 17.5 4.5 22.0 17.4 2.8 20.2 17.5 3.7 21.2
T TT TTotal otal otal otal otal 4.5 4.5 4.5 4.5 4.5 9.4 9.4 9.4 9.4 9.4 13.9 13.9 13.9 13.9 13.9 3.1 3.1 3.1 3.1 3.1 5.8 5.8 5.8 5.8 5.8 8.9 8.9 8.9 8.9 8.9 3.8 3.8 3.8 3.8 3.8 7.7 7.7 7.7 7.7 7.7 11.5 11.5 11.5 11.5 11.5
F ig . 3 . 7: D istrib u tio n o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 acro ss E d u catio n & S k ill L e ve ls (2 0 0 4 -2 0 0 5 )
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey
3.26 As Fig. 3.7 shows, 74 per cent of the formally
trained persons have higher secondary or higher levels
of education while, on the other hand, 78 per cent persons
wi th i nformal ski l l s have mi ddl e or l ower l evel of
education. The issue therefore is not that persons with
21
3
However, in spite of the improvement in the educational profile, there has been a fall in the level of overall skills, during the 11
year period for all categories of education and sex except for higher secondary and above.
lower levels of education can not acquire skills, but that
the exi sti ng trai ni ng systems are ori ented towards
providing formal training only to those persons with
higher levels of education.
3
. Most vocational training
programmes, including the ITIs, require at least secondary
or higher secondary levels of education to be able to enroll
in the programme.
3.27 The education and skill relationship prevails even
within unorganised and organised sectors. But, as one
might expect, there are some differences. I n the organised
sector, 94 per cent of the formally trained workers had
secondary or higher educational levels (Fig. 3.8). But in
the unorganised sector, this percentage was lower at 77
per cent i.e. in the unorganised sector slightly less than a
quarter of the formally trained workers had middle or
lower education. This percentage was higher among
women, 30 per cent of the formally trained female workers
have middle or lower education (compared to a figure of
about 20 per cent for male workers).
F ig 3 . 8 : E d u catio n al L e ve ls o f U su al P rin cip al an d S u b sid iary S tatu s Wo rk e rs with F o rm al S k ills (1 5 -2 9
ye ars) b y S e cto r (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Trades & Formal Training
3.28 The NSSO provides information regarding the
trades for which formal skill training has been provided
to the persons in 15 – 29 years age group. The most
sought after fi eld of formal vocati onal trai ni ng was
‘computer trades’ (nearly 30 per cent). For men the next
most popular trades were electrical and electronics (18.2
per cent), followed by mechanical engineering (12.3 per
cent), ‘driving’ (9.4 per cent), ‘civil engineering’ (4.7 per
cent), health and paramedical (4.3 per cent) and office
and business work’ (4.1 per cent). Among women there
was concentration of vocational training in computers
followed by ‘textile related trade’ (22 per cent). The next
most popular trades among women are ‘health and
paramedical’ and office and business work. While the
overall preferences were not very different among men in
rural and urban areas, the demand from rural female was
a little different (Table 3.7). Among the female youth in
rural areas, the first preference for vocational training
was textile and related trades (31 per cent), followed by
S k ill P ro file o f th e I n d ia n Wo rk fo rce
22
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
computer trades (21 per cent), and health and paramedical
trades (10 per cent). Among urban women i t was
computer related trades (39 per cent) followed by textile
related (18 per cent) and heath and paramedical trades
(9 per cent).
3.29 An analysis of formal training among the workers
shows that there are quite a few trades where training is
concentrated among both organised and unorganised
sector workers (Appendix Table A3.3). However, there
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
T ab le 3 . 7: P e rce n tag e o f P e rso n s in Ag e -g ro u p 1 5 - 2 9 Ye ars R e ce ivin g / R e ce ive d F o rm al Vo catio n al
T rain in g b y F ie ld o f Vo catio n al T rain in g & S e x (2 0 0 4 -2 0 0 5 )
P PP PPopulatio opulatio opulatio opulatio opulation (15-29 n (15-29 n (15-29 n (15-29 n (15-29 Y YY YYears) ears) ears) ears) ears) W WW WWor or or or orkers (15-29 kers (15-29 kers (15-29 kers (15-29 kers (15-29 Y YY YYears) ears) ears) ears) ears)
F FF FFi eld of i eld of i eld of i eld of i eld of V VV VVoc oc oc oc ocati o ati o ati o ati o ati onal nal nal nal nal T TT TTr rr rrai ni ng ai ni ng ai ni ng ai ni ng ai ni ng P PP PPerso erso erso erso ersons ns ns ns ns Male Male Male Male Male Female Female Female Female Female Unorgani sed Unorgani sed Unorgani sed Unorgani sed Unorgani sed Organi sed Organi sed Organi sed Organi sed Organi sed T TT TTotal otal otal otal otal
Mechanical Engineering 7.9 12.3 1.0 7.5 12.1 9.2
Electrical & Electronic Engineering 12.5 18.2 3.5 12.8 13.8 13.1
Computer Trades 30.0 29.9 30.0 23.5 32.3 26.8
Civil engineering and building construction related
works 3.3 4.7 1.2 3.9 2.1 3.3
Chemical Engineering 0.3 0.5 0.0 0.1 0.2 0.1
Leather Related 0.2 0.3 0.1 0.4 0.0 0.2
Textile Related 9.8 1.9 22.2 11.7 4.4 9.0
Catering, nutrition, hotels and restaurant related work 0.9 1.1 0.6 0.6 0.9 0.8
Artisan/ craftsman/ handicraft and cottage based
production work 1.9 1.5 2.5 2.8 0.9 2.1
Creative arts/ artists 1.2 0.8 1.9 0.4 1.3 0.8
Agriculture and crop production related skills and food
preservation related work 0.6 0.7 0.4 0.6 0.3 0.5
Non-crop based agricultural and other related activities 0.5 0.5 0.5 0.7 0.5 0.6
Health and paramedical services related work 6.4 4.3 9.9 4.9 8.6 6.3
Office and business related work 4.8 4.1 5.8 2.9 4.3 3.4
Driving and motor mechanic work 5.9 9.4 0.5 13.0 5.6 10.3
Beautician, hairdressing & related work 1.7 0.0 4.3 1.7 0.2 1.1
Work related to tour operators/ travel managers 0.1 0.0 0.0 0.0 0.0 0.0
Photography and related work 0.1 0.2 0.1 0.4 0.0 0.2
Work related to childcare, nutrition, pre-schools and
crèche 1.0 0.0 2.6 1.3 1.4 1.3
Journalism, mass communication and media related
work 0.3 0.3 0.1 0.1 0.5 0.2
Printing technology related work 0.5 0.6 0.5 0.9 0.5 0.7
Other 9.1 7.9 10.9 9.9 10.2 10.0
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
are a handful of trades where the incidence of formal
training is higher in the informal sector. These are: textile
rel at ed t rades; handi craf t / art i san/ cot t age based
production; and driving and motor mechanic work.
Poverty & Formal Skills
3.30 Poverty is undoubtedly a significant barrier in
acquiring skills. A poor person has hardly any chance of
acquiring formal skills. The incidence of training is fairly
23
high only for the middle and high income groups. Our
analysis shows that 7.5 per cent of the middle and 17.6
per cent high income groups were formally trained (Fig.
3.9). Such a systematic association between income and
training status is not the case with non-formal training
which is fairly dispersed across the lower income groups.
While any formal training system has to overcome the
barrier posed by the economic status of the potential
trainee, possession of informal skills does not provide
workers a way out of poverty.
Social Group & Formal Skills
3.31 The relationship between education levels and
skills also vary across social groups. The share of persons
with formal skills increases from STs, SCs, OBCs to
Others in that order. I ndeed it is only the general caste
categories for whom the incidence of training is higher
than the average of 3.8 per cent (Fig 3.10). As far as
informal skills are concerned, there are difference across
social groups. These are the highest among OBC persons
(who form a large proportion of non-agricultural self-
employed workers) and relati vely the lowest among
persons belonging to the general caste groups.
F ig . 3 . 9 : P e rce n tag e o f P e rso n s in th e Ag e G ro u p 1 5 -2 9 with F o rm al S k ill in P o ve rty G ro u p s (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Multivar Multivar Multivar Multivar Multivariate A iate A iate A iate A iate Anal nal nal nal naly yy yysis of the F sis of the F sis of the F sis of the F sis of the Factors I nfluencing F actors I nfluencing F actors I nfluencing F actors I nfluencing F actors I nfluencing For or or or ormal mal mal mal mal
Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red
3.32 The above analysis shows quite clearly that the
likelihood of being formally trained is higher for those
with high levels of education, the economically better
off, males, those living in urban areas, and those belonging
to upper castes. One may like to know whether each of
these factors exercise an independent influence on the
probability of being formally trained after accounting for
the influence of the other factors. Appendix Table A3.4
presents the likelihood of certain variables which impact
the formal training by sex, residence and education. The
reference variables are rural areas as place of residence,
females among sex, illiteracy among education and below
poverty line among poverty status. We observe that the
likelihood that a person gets formal training is 91 per
cent more if he comes from an urban area in comparison
to his rural counterparts. Similarly, a male has a greater
chance to be trained in comparison to his opposite sex.
The likelihood of an educated person being trained is
300 per cent if he is educated up to middle and jumps to
S k ill P ro file o f th e I n d ia n Wo rk fo rce
24
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
F ig 3 . 1 0 : P e rce n tag e o f P e rso n s with S k ills in th e Ag e G ro u p 1 5 -2 9 fo r e ach S o cial G ro u p s (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
2500 per cent if he is secondary educated as compared to
illiterate persons. The social group also has an influence
on the chances of being formally trained. The SC, OBC
and Others all have a higher likelihood of being formally
trained as compared to the STs.
Supply of training: Training providers & Types
3.33 Given the requirement of availability of skilled
labour in the context of economic development, it is
processes of formal skill acquisition and training for
employment that become important. The fact is that
developing countries tend to lag behind in making these
processes available to their populations. These processes
of formal skill acquisition and training come from the
general educational systems and systems of technical and
vocational education and training (TVET) that are linked
to specific occupations. I t includes learning designed to
develop the skills for practicing particular occupations,
as well as that designed to prepare for entry or re-entry
into the world of work in general. TVET includes both
initial vocational training undertaken by young people
pri or to enteri ng the labour market and conti nui ng
vocational training undertaken by adults whilst in work
or during periods when they are economically inactive.
I n ot her words, i t encompasses bot h i ni t i al ski l l s
development and various forms of ‘Re-skilling’ and ‘Up-
skilling’.
3.34 The field of formal training obtained by the
youth is related to the supply of training through the
exi sti ng i nsti tutes of trai ni ng. The NSS survey also
enquires into the institutes from where the formal training
was being obtained. The I ndustrial Training I nstitutes
(I TI s) and the I ndustrial Training Centres (ITCs) provide
the largest formal training base for about 7.88 lakh
persons. Vocational education schools provided around
2 lakh training places, I nstitutions affiliated to the UGC
25
and the polytechnics provided about 6.15 lakh training
places. About 2.2 lakh persons were being trained in
tailoring, embroidery and stitch craft. Altogether, 39.2
lakhs or 3.92 million persons were receiving formal
training at the time of the survey (Table 3.8).
3.35 We have also analysed the type of institutions
t hrough whi ch f ormal l y t rai ned workers i n t he
unorgani sed and organi sed sectors recei ved trai ni ng
(Appendix Table A 3.3). Here again we notice that the
Bold figures relate to inadequate sample size below 30
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
T ab le 3 . 8 : P e rce n tag e o f P e rso n s in Ag e -g ro u p 1 5 - 2 9 Ye ars R e ce ivin g F o rm al Vo catio n al T rain in g b y
I n stitu te o f T rain in g & S e x, (2 0 0 4 -2 0 0 5 )
I nstitute of I nstitute of I nstitute of I nstitute of I nstitute of T TT TTr rr rraining aining aining aining aining Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
(i n thousands) (i n thousands) (i n thousands) (i n thousands) (i n thousands) (i n per cent) (i n per cent) (i n per cent) (i n per cent) (i n per cent)
ITI/ ITC 704.31 84.60 788.91 26.1 6.9 20.1
Schools with Vocational Course 142.55 58.28 200.83 5.3 4.7 5.1
UGC 287.57 65.66 353.22 10.7 5.3 9.0
Polytechniques 219.27 44.34 44.34 44.34 44.34 44.34 263.61 263.61 263.61 263.61 263.61 8.1 3.6 3.6 3.6 3.6 3.6 6.7 6.7 6.7 6.7 6.7
Janshikshan 15.69 15.69 15.69 15.69 15.69 25.09 25.09 25.09 25.09 25.09 40.78 40.78 40.78 40.78 40.78 0.6 0.6 0.6 0.6 0.6 2.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 1.0 1.0
National Open 2.39 2.39 2.39 2.39 2.39 4.80 4.80 4.80 4.80 4.80 7.18 7.18 7.18 7.18 7.18 0.1 0.1 0.1 0.1 0.1 0.4 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.2
Hotel Management 28.35 28.35 28.35 28.35 28.35 3.13 3.13 3.13 3.13 3.13 31.48 31.48 31.48 31.48 31.48 1.1 1.1 1.1 1.1 1.1 0.3 0.3 0.3 0.3 0.3 0.8 0.8 0.8 0.8 0.8
Food Craft, Catering 13.34 13.34 13.34 13.34 13.34 0.27 0.27 0.27 0.27 0.27 13.60 13.60 13.60 13.60 13.60 0.5 0.5 0.5 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.3 0.3 0.3
CSI SI / DI C 12.90 12.90 12.90 12.90 12.90 6.73 6.73 6.73 6.73 6.73 19.63 19.63 19.63 19.63 19.63 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Fashion Technology I nstitutes 0.47 0.47 0.47 0.47 0.47 9.56 9.56 9.56 9.56 9.56 10.03 10.03 10.03 10.03 10.03 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.8 0.8 0.8 0.3 0.3 0.3 0.3 0.3
Tailoring, Embroidery, Stitch Craft 21.16 21.16 21.16 21.16 21.16 201.80 222.96 0.8 0.8 0.8 0.8 0.8 16.4 5.7
Nursing I nstitutes 35.01 35.01 35.01 35.01 35.01 59.58 94.59 1.3 1.3 1.3 1.3 1.3 4.9 2.4
Physiotherapy, Ophthalmic, Dental I nstitutes 7.19 7.19 7.19 7.19 7.19 10.85 10.85 10.85 10.85 10.85 18.05 18.05 18.05 18.05 18.05 0.3 0.3 0.3 0.3 0.3 0.9 0.9 0.9 0.9 0.9 0.5 0.5 0.5 0.5 0.5
I nstitute Diploma Pharmacy 41.81 41.81 41.81 41.81 41.81 7.49 7.49 7.49 7.49 7.49 49.29 1.5 1.5 1.5 1.5 1.5 0.6 0.6 0.6 0.6 0.6 1.3
Hospital & Medical Training I nstitutes 47.75 44.76 92.51 1.8 3.6 2.4
Nursery Teachers’ Training I nstitutes 5.31 5.31 5.31 5.31 5.31 25.32 25.32 25.32 25.32 25.32 30.63 0.2 0.2 0.2 0.2 0.2 2.1 2.1 2.1 2.1 2.1 0.8
Training for Agricultural Extension 13.75 13.75 13.75 13.75 13.75 4.71 4.71 4.71 4.71 4.71 18.46 18.46 18.46 18.46 18.46 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Carpet Weaving Centres 0.00 0.00 0.00 0.00 0.00 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.4 0.4 0.4 0.1 0.1 0.1 0.1 0.1
Handloom, Handicraft, KVI C 0.07 0.07 0.07 0.07 0.07 0.63 0.63 0.63 0.63 0.63 0.70 0.70 0.70 0.70 0.70 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0
Recognised Motor Driving Schools 73.18 0.15 0.15 0.15 0.15 0.15 73.33 2.7 0.0 0.0 0.0 0.0 0.0 1.9
I nstitute for Secretariat Practices 5.85 5.85 5.85 5.85 5.85 26.27 26.27 26.27 26.27 26.27 32.11 32.11 32.11 32.11 32.11 0.2 0.2 0.2 0.2 0.2 2.1 2.1 2.1 2.1 2.1 0.8 0.8 0.8 0.8 0.8
Recognised Beautician Schools 0.00 0.00 0.00 0.00 0.00 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 0.0 0.0 0.0 0.0 0.0 2.4 2.4 2.4 2.4 2.4 0.7 0.7 0.7 0.7 0.7
I nstitutes run by Companies, Corporations 91.69 45.81 137.50 3.4 3.7 3.5
I nstitutes for Journalism, Mass Communication 32.98 32.98 32.98 32.98 32.98 2.46 2.46 2.46 2.46 2.46 35.44 35.44 35.44 35.44 35.44 1.2 1.2 1.2 1.2 1.2 0.2 0.2 0.2 0.2 0.2 0.9 0.9 0.9 0.9 0.9
Other I nstitutes 895.11 461.32 1356.43 33.2 37.6 34.6
Total (excluding Unspecified) 2697.69 1227.36 3925.05 100.0 100.0 100.0
Total 2709.37 1234.36 3943.73
formally trained have a fairly similar training background
i n both the organi sed and unorgani sed sectors. For
example, 24.8 per cent of the formally trained in the
unorganised sector and 22.4 per cent of the formally
trained in the organised sector come from the I TI s. At
another end, 4.1 per cent of the formally trained in the
unorganised sector and 3.8 per cent of the formally trained
in the organised sector come from the vocational schools.
There are a few differences, however. A higher proportion
S k ill P ro file o f th e I n d ia n Wo rk fo rce
26
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
of the trained workers in the organised sector are from
the UGC institutions and the polytechnics. On the other
hand, a higher proportion of those trained in tailoring,
embroidery and stitch craft, and in handloom, handicraft
are in the unorganised sector.
3.36 The source of formal training is quite different
for young men and women. While about 45 per cent of
formally trained men received their training from I TI /
I TC, Polytechnics, or UGC recognized institutions, this
percentage was only 15.8 for women (Table 3.8). On the
other hand, 27 per cent women received training from
institutes for tailoring, stitch-craft and embroidery, nursing
and medical training and teachers’ training.
3.37 Besides NSS, information on supply of training
i nsti tutes and i nfrastructure i s al so avai l abl e from
government sources. The details are provided later in this
report. While higher end technical education is provided
by I I Ts. engi neeri ng i nsti tuti ons, medi cal coll eges,
polytechnics and so on, the I TI s/I TCs have formed the
backbone of the system providing lower end formal
training. There are around 6834 I TI s/I TCs in I ndia with
a seating capacity of about 0.9 million throughout the
country. Of thi s, I TI s/ I TCs i n the southern states
comprised nearly 38 per cent, with Andhra Pradesh
accounting for around 12 per cent and Tamil Nadu around
9 per cent. The Apprenticeship Training Scheme of the
government is available to 2.58 lakh workers. Vocational
Schools offer places to about 1 million persons while
polytechnics offer about 3 lakh places. There are a host
of other public and private training providers for formal
training.
3.38 MoLE esti mates that there are onl y 2.5- 3
million vocational education and training places available
in the country. As shown earlier, our direct estimates are
that about 3.8 m were undergoing formal training at the
time of the survey. Given that the duration of such training
is often less than a year, we have estimated the annual
training capacity to be about 5 million. Out of these, very
few places are for those with low levels of education.
While the overall formal skill levels are very low, the
large numbers of people who drop out of school, in
particular, do not have the necessary education and skills
to be productively employed in the economy. This is
undoubtedly a very serious challenge to the current growth
and development process.
Demand for training
3.39 There is no systematic assessment of the demand
for training in the unorganised sector of the economy.
Most assessments of such demand have been made by, or
on behalf of, segments of (organised) industry. These do
not go into the overall need to educate and train the
predominantly informal sector labour force in I ndia.
However, almost all available reports (reviewed later in
this report) pinpoint skill shortages and mismatches
between demand and supply.
4
3.40 We have examined the recent characteristics of
the workforce in the organised and unorganised sectors,
including those such as average education level, technical
education, incidence of formal and non-formal skills and
growth rate of employment (Appendix Table A 3.5).
Broadl y, at the hi gh end of the workforce, we have
segments requiring high levels of general education and/
or technical education. Our primary focus is on segments
of the workforce which have comparatively low levels of
education, and who are currently with or without (formal/
non-formal) skills. Among these segments, those with a
4
The CI I – McKinsey Report ‘Made in I ndia: the next big manufacturing export story’ (October 2004) points out the big
mismatch between the needs of the industry and availability of skilled human resources in I ndia. The report states that if the
I ndian manufacturing sector has to grow at about 12 per cent per annum, it will be necessary for the education and training
system to produce at least 1.5 million technically skilled people every year. I t estimates that the country would need an
incremental requirement of about 20 million skilled people by 2015. Similarly, the apparel industry alone requires 2 million
skilled workers by 2010 and the present institutional structure is inadequate to meet the demand. The retail sector is another
activity that reportedly requires large numbers of skilled people. The Retailer’s Association of I ndia has signed an MOU with
Ministry of Labour and Employment to train the youth registered with the State Employment Exchanges. An estimate says
(reported in Economics Times dated June 19, 2007) that there is an immediate requirement of 1.5 lakhs skilled people on the
shop floor. A recent Study undertaken by Ernst & Young reports that ‘by targeting the youth population in I ndia, the Retailers
will be investing in the future as they will be able to influence and create loyalty from the start’ (Financial Express, June 8, 2007).
27
fairly high incidence of skills (predominantly non-formal)
and rapid growth of employment are clearly those on
which formal training initiatives would need to focus.
Our analysis (based on Table A3.5, in the appendix)
identifies the following trades on a prima facie basis as
those in which an intensive effort to expand training
would be required: Construction Workers, Stone Cutter;
Salesmen, Shop Assistants, Related; Transport Equipment
Operators; Tailors, Dress makers, Sewers, Upholsterers,
Related; Producti on, Related (Others); Carpenters,
Cabinet, Related Wood; Tobacco Preparers, Tobacco
Product Makers; Hai r Dresser, Barber, Beauti ci an,
Rel ated; House Keeper, Matron, Steward, Cooks,
Waiters, Bartenders; Stationary Engines, Equipment
Operators, Material Handling, Loaders; Plumber, Welder,
Sheet Metal, Structural, Metal Preparers, Erectors;
Painting; Arts and Journalists. There are other sectors/
segments whi ch are also growi ng rapi dly but where
current levels of training are low. Examples of these trades
are: Maids, Related House keeping Service (Others);
Professi onal Workers, Others; Bui l di ng Caretaker,
Sweeper, Cleaner, Related. The potential/need of training
in these sectors needs to be carefully examined.
Regional Dimensions of “Demographic
Dividend” & Training Capacity
3.41 A strong case for strengthening training capacity
for the informal sector workers arises from the increasing
requirement for skilled and semi-skilled labour from the
rest of the world. I ndia currently has a large emigrant
worker population, of whom a large percentage consists
of such workers. I t is anticipated that in the years to
come, with the projected increases in I ndia’s labour force
and the projected deficits in labour supply in developed
regions/countries, I ndian skilled/semi-skilled workers
mi ght pl ay a more si gni fi cant rol e i n meeti ng the
international deficits.
3.42 The Commission projected the increase in labour
force till the year 2017, age group wise, at the state level.
I t is estimated that between 2006-07 and 2016-17, 52.9
percent of the total increase in labour force and 81.6
percent of the increase in the young labour force (15-29
years) will be in the Eastern and Central states (M.P.,
Chhatisgarh, Jharkhand. Bihar, Uttar Pradesh, West
Bengal, Orissa, Assam and the Northeastern states), while
the Southern and Western states will contribute to 28.9
percent of the total increase in labour force and -2.6
percent to the increase in the young labour force. The
details are given in Appendix Table A3.6. I t is to be noted
that, at present, 57.1 percent of the formal training
capacity is in the latter group of states whereas the former
group of states have 28.1 percent of training capacity.
Other private and NGO training capacity too follows a
similar geographical pattern. I t follows that a major effort
will have to be made to boost training capacity in the
lagging states, if the country is to reap the so-called
demographic dividend.
Training Targets
3.43 As discussed earlier in this report, the level of
vocational skills in the labour force in I ndia compares
poorly with the position in other countries (Table 3.9).
The Commission is of the view that the percentage of
formally trained labour force should be raised to about
50 over the next three five year plans.
Note: Note: Note: Note: Note: Only those who have received formal vocational training are
shown as trained in this table. To the extent that training and skills in
I ndia are acquired through informal methods, including training in
the family, the I ndian figures are understated.
S SS SSour our our our ource: ce: ce: ce: ce: Report of the Task Force on Employment Opportunities
set up by the Planning Commission
T ab le 3 . 9 : Vo catio n ally train e d yo u th in L ab o u r
F o rce : I n te rn a tio n a l C o m p a riso n
Country Country Country Country Country Age Group Age Group Age Group Age Group Age Group V VV VVoc oc oc oc ocatio atio atio atio ational nal nal nal nall ll ll y y y y y T TT TTr rr rrained ained ained ained ained
( per cent of ( per cent of ( per cent of ( per cent of ( per cent of Those i n Those i n Those i n Those i n Those i n
labour force) labour force) labour force) labour force) labour force)
I ndia I ndia I ndia I ndia I ndia 20-24 20-24 20-24 20-24 20-24 5.06 5.06 5.06 5.06 5.06
Developing Countries Developing Countries Developing Countries Developing Countries Developing Countries
Botswana 20-24 22.42
Colombia(1998) 20-29 28.06
Mauritius(1995) 20-24 36.08
Mexico(1998) 20-24 27.58
Developed Countries Developed Countries Developed Countries Developed Countries Developed Countries
Australia(1998) 20-24 64.11
Canada(1998) 20-24 78.11
France(1997) 20-24 68.57
Germany (1998) 20-24 75.33
I srael(1998) 18-24 81.23
I taly (1997) 20-24 43.88
Japan (1997) 15-24 80.39
KoreaRepublic (1998) 20-24 95.86
New Zealand (1997) 20-24 63.03
Russian Federation (1998) 20-24 86.89
Singapore(1998) 20-24 66.24
United Kingdom(1998) 20-24 68.46
S k ill P ro file o f th e I n d ia n Wo rk fo rce
28
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
3.44 I n order to work out the annual and plan-wise
targets, the Commission has estimated the labour force
for the years up to 2021-22 using the last three rounds of
the NSS and the population projections prepared for the
Planning Commission. I n order to provide formal skill
training to half the labour force considerable expansion
of training would be required. We estimate that during
the Eleventh Plan, the annual training capacity would
need to about 12.5 million (up from about 5 million
currently). A further increase to 18 million would be
required during the 12
th
Plan which will go up to 25
million during the 13
th
Plan. I f these targets are achieved,
then by the end of the 13
th
Plan, about half the total
labour force of 623 million in 2021-22 would acquire
formal skills.
3.45 I t may be mentioned that the annual increase in
the labour force is presently estimated at about 9.6 million
which would fall to about 8 million by the end of the
13
th
Plan. The medium term strategy proposed by us
would involve provision of training for both new entrants
as well as those already in the labour force. As shown
elsewhere in this report, the training of workers in the
unorganised sector would require flexible delivery models
whi ch do not bank on fi xed i nsti tuti onal capaci ty/
infrastructure. The permanent training capacity in the
system may not need to be raised beyond 10-12 million
workers in the medium term.
Conclusion
3.46 Although the I ndian economy has experienced
rapid growth over the recent period, the low levels of
education and formal training of the workforce are a
matter of concern. Workers without education and skills
are stuck at the bottom of the labour market with low
productivity and earnings. From the point of view of the
economy, the lack of skills, the inability of the workers
to adapt to changing technological and market conditions,
and the existence of low productivity sectors can not but
constrain the growth of the economy and lead to a lop
sided growth structure in which the majority of workers
are not able to participate effectively in the development
process.
3.47 The economy has a small organised sector and
a large unorganised sector. Workers – waged as well as
self-employed in the unorganised sector- are worse off
in terms of their educational and skill endowments. Most
of the addition to the labour force is likely to be absorbed
in the unorganised non-farm sector.
3.48 The formal skill training system in I ndia was
created to meet the needs of a growing factory system. I t
catered to a few trades and persons with secondary or
higher education were eligible to undergo training. Over
the years, this system itself has not been able to meet the
changing needs of the organised sector. Moreover, since
the organised sector itself has not shown significant
growth in terms of employment, a majority of the trained
persons have found employment in the upper segments
of the unorganised economy. Formal training, which is
accessed by a very low percentage of the population
currently is directly related to the socio-economic status
of the individual. To some extent, other skill needs of the
economy are met through non-formal training, which is
relatively more accessible to persons from lower socio-
economic backgrounds but which suffers from a number
of limitations. Moreover, even after taking into account
the non-formally trained, skilled workers in the I ndian
economy are still small in number. There are many sectors
where there is severe dearth of skills and in which the
case for expanded formal training can be made out.
3.49 I n this report, we have focused on the training
needs of workers in the unorganised sector who have
low levels of education and low level of formal skills.
We are of the view that all entrants in the labour force
must be equipped with a minimum level of education
which must be gradually extended to secondary level.
Simultaneously efforts have to be made to provide these
workers with skill training through modular courses so
that a significant part of the labour force can be imbued
with formal marketable skills within a reasonable period
of time. Unless this is done, this workforce will not be
able to move on a trajectory of higher productivity and
higher incomes, with deleterious consequences for the
development of the economy as a whole.
29
Ap p e n d ix T a b le A3 . 1 : S k ills a cro ss th e P o p u la tio n (1 9 9 3 -9 4 )
Ski ll Ski ll Ski ll Ski ll Ski ll N NN NNumber of P umber of P umber of P umber of P umber of Perso erso erso erso ersons ns ns ns ns P PP PPer er er er ercent to total cent to total cent to total cent to total cent to total P PP PPer er er er ercent to total wi th ski l cent to total wi th ski l cent to total wi th ski l cent to total wi th ski l cent to total wi th ski ll s l s l s l s l s
(i n lakhs) (i n lakhs) (i n lakhs) (i n lakhs) (i n lakhs) (i n per cent) (i n per cent) (i n per cent) (i n per cent) (i n per cent)
Stenographer Stenographer Stenographer Stenographer Stenographer 43.45 43.45 43.45 43.45 43.45 0.49 0.49 0.49 0.49 0.49 4.76 4.76 4.76 4.76 4.76
Fisherman 21.01 0.23 2.30
Miner, Quarryman 8.36 0.09 0.92
Spinner 16.78 0.19 1.84
W WW WWeav eav eav eav eaver er er er er 74.89 74.89 74.89 74.89 74.89 0.84 0.84 0.84 0.84 0.84 8.21 8.21 8.21 8.21 8.21
T TT TTailor ailor ailor ailor ailor 156.04 156.04 156.04 156.04 156.04 1.75 1.75 1.75 1.75 1.75 17.10 17.10 17.10 17.10 17.10
Shoemaker 7.69 0.09 0.84
Carpenter 29.25 0.33 3.21
Mason, Bricklayer 27.89 0.31 3.06
Moulder 2.70 0.03 0.30
Machineman 16.45 0.18 1.80
Fitter, Diemaker 11.43 0.13 1.25
Welder 8.27 0.09 0.91
Blacksmith 9.63 0.11 1.05
Goldsmith 7.81 0.09 0.86
Silversmith 2.36 0.03 0.26
Electrician 16.16 0.18 1.77
Repair Electronic Goods 9.72 0.11 1.06
Motor Motor Motor Motor Motor V VV VVehic ehic ehic ehic ehicle D le D le D le D le Dr rr rriv iv iv iv iver er er er er 73.37 73.37 73.37 73.37 73.37 0.82 0.82 0.82 0.82 0.82 8.04 8.04 8.04 8.04 8.04
Boatman 2.16 0.02 0.24
Potter 8.99 0.10 0.99
Nurse, Midwife 4.57 0.05 0.50
Basket, Wick maker 24.38 0.27 2.67
Toy Maker 0.34 0.00 0.04
Brick Maker, Tile maker 11.32 0.13 1.24
Bidi Maker Bidi Maker Bidi Maker Bidi Maker Bidi Maker 41.72 41.72 41.72 41.72 41.72 0.47 0.47 0.47 0.47 0.47 4.57 4.57 4.57 4.57 4.57
Book binder 1.25 0.01 0.14
Barber 13.49 0.15 1.48
Mud House builder & thatcher 36.15 0.40 3.96
Others 224.79 2.51 24.64
T TT TTotal otal otal otal otal W WW WWith S ith S ith S ith S ith Ski l ki l ki l ki l ki lls ls ls ls ls 912.44 912.44 912.44 912.44 912.44 10.20 10.20 10.20 10.20 10.20 100.00 100.00 100.00 100.00 100.00
No Skills No Skills No Skills No Skills No Skills 8029.45 8029.45 8029.45 8029.45 8029.45 89.80 89.80 89.80 89.80 89.80
T TT TTotal otal otal otal otal 8941.89 8941.89 8941.89 8941.89 8941.89 100.00 100.00 100.00 100.00 100.00
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
S k ill P ro file o f th e I n d ia n Wo rk fo rce
30
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Ap p e n d ix T ab le A3 . 2 : S k ills o f Wo rk e rs (1 5 - 2 9 ye ars) acro ss I n d u strie s & S e cto rs (2 0 0 4 -2 0 0 5 )
Bold figures indicate sample size below 30
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Unorganised Sector Unorganised Sector Unorganised Sector Unorganised Sector Unorganised Sector Organised Sector Organised Sector Organised Sector Organised Sector Organised Sector Al Al Al Al All l l l l W WW WWor or or or orkers kers kers kers kers
F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill
Agriculture 0.8 11.0 3.5 13.1 0.8 10.9
Mining 0.3 0.3 0.3 0.3 0.3 2.1 2.1 2.1 2.1 2.1 4.4 4.4 4.4 4.4 4.4 19.0 19.0 19.0 19.0 19.0 2.3 2.3 2.3 2.3 2.3 10.4 10.4 10.4 10.4 10.4
Manufacturing 3.7 31.4 8.7 26.2 5.1 29.8
Electricity, Gas, Water Supply 0.0 0.0 0.0 0.0 0.0 3.8 3.8 3.8 3.8 3.8 20.5 20.5 20.5 20.5 20.5 20.8 20.8 20.8 20.8 20.8 15.8 15.8 15.8 15.8 15.8 16.9 16.9 16.9 16.9 16.9
Construction 2.6 14.0 1.8 8.5 2.4 12.7
Trade 4.2 13.1 14.8 26.1 4.7 13.7
Hotels & Restaurants 1.7 1.7 1.7 1.7 1.7 12.1 8.6 8.6 8.6 8.6 8.6 14.8 14.8 14.8 14.8 14.8 2.9 12.6
Transport 7.5 22.5 14.1 22.1 8.4 22.5
Finance 18.9 18.9 18.9 18.9 18.9 20.6 20.6 20.6 20.6 20.6 23.8 26.4 22.3 24.6
Real estate 19.0 30.6 32.1 34.2 24.2 32.1
Public Administration 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 12.1 14.9 12.1 14.8
Education 23.2 28.1 19.0 22.1 20.9 24.8
Health, Social Work 24.4 42.0 36.6 40.2 29.9 41.2
Community, Personal, Social Service 2.8 28.2 11.5 11.5 11.5 11.5 11.5 22.3 22.3 22.3 22.3 22.3 3.5 27.7
Private Households with Employed Persons 5.5 5.5 5.5 5.5 5.5 8.9 8.9 8.9 8.9 8.9 0.0 0.0 0.0 0.0 0.0 7.0 7.0 7.0 7.0 7.0 5.5 5.5 5.5 5.5 5.5 9.0 9.0 9.0 9.0 9.0
Total 2.5 15.1 11.1 21.6 3.5 15.8
31
Ap p e n d ix T ab le A3 . 3 : P e rce n tag e o f Wo rk e rs R e ce ivin g / R e ce ive d F o rm al Vo catio n al T rain in g in
Ag e -G ro u p 1 5 - 2 9 Ye ars b y I n stitu tio n s & S e cto r (2 0 0 4 -2 0 0 5 )
I nstitute of I nstitute of I nstitute of I nstitute of I nstitute of T TT TTr rr rraining aining aining aining aining Unorganised Unorganised Unorganised Unorganised Unorganised Organised Organised Organised Organised Organised T TT TTotal otal otal otal otal
ITI/ ITC 24.8 22.4 23.9
Schools with Vocational Course 4.1 3.8 4.0
UGC 1.9 1.9 1.9 1.9 1.9 3.5 2.5
Polytechniques 2.3 5.5 3.5
Janshikshan 0.6 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6
National Open 0.1 0.1 0.1 0.1 0.1 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Hotel Management 0.1 0.1 0.1 0.1 0.1 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Food Craft, Catering 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4
CSI SI / DI C 0.6 0.6 0.6 0.6 0.6 0.8 0.8 0.8 0.8 0.8 0.6 0.6 0.6 0.6 0.6
Fashion Technology I nstitutes 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Tailoring, Embroidery, Stitch Craft 9.3 2.6 2.6 2.6 2.6 2.6 6.8
Nursing I nstitutes 1.5 1.5 1.5 1.5 1.5 3.7 2.3
Physiotherapy, Ophthalmic, Dental I nstitutes 0.1 0.1 0.1 0.1 0.1 0.4 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.2
I nstitute Diploma Pharmacy 0.8 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.8
Hospital & Medical Training I nstitutes 2.3 3.0 2.6
Nursery Teachers' Training Institutes 1.3 1.3 1.3 1.3 1.3 1.9 1.9 1.9 1.9 1.9 1.5
Training for Agricultural Extension 1.0 1.0 1.0 1.0 1.0 0.3 0.3 0.3 0.3 0.3 0.7 0.7 0.7 0.7 0.7
Carpet Weaving Centres 0.2 0.2 0.2 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.2 0.2 0.2
Handloom, Handicraft, KVI C 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Recognised Motor Driving Schools 10.2 3.4 7.6
I nstitute for Secretariat Practices 0.5 0.5 0.5 0.5 0.5 1.7 1.7 1.7 1.7 1.7 0.9
Recognised Beautician Schools 1.0 1.0 1.0 1.0 1.0 0.2 0.2 0.2 0.2 0.2 0.7 0.7 0.7 0.7 0.7
I nstitutes run by Companies, Corporations 2.8 5.0 3.6
I nstitutes for Journalism, Mass Communication 0.2 0.2 0.2 0.2 0.2 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Other I nstitutes 33.7 38.4 35.5
T TT TTotal otal otal otal otal 100.0 100.0 100.0
Bold figures indicate sample size below 30
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
S k ill P ro file o f th e I n d ia n Wo rk fo rce
32
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Ap p e n d ix T ab le A3 . 4 : L o g it M o d e l: D e p e n d e n t Variab le Vo catio n al T rain in g
(H ave T rain in g , F o rm al an d I n fo rm al/N o T rain in g )
*- Significant at .01
V VV VVar ar ar ar ariable iable iable iable iable Coefficient Coefficient Coefficient Coefficient Coefficient Odds Ratio Odds Ratio Odds Ratio Odds Ratio Odds Ratio
Constant -7.298
Sector
Rural(R) - -
Urban 0.648* 1.913
Sex
Female(R) - -
Male 0.133* 1.142
Education
I lliterate & Below Primary(R) - -
Primary & Middle 1.177* 3.244
Secondary & Above 3.229* 25.243
Poverty Status
Below Poverty Line(R) - -
BPL to 2*Poverty Line 0.457* 1.579
More then 2* Poverty Line 1.250* 3.492
Socio-religious
ST(R) - -
SC 0.851* 2.342
OBC 0.684* 1.983
Others 0.529* 1.698
33
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34
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35
S k ill P ro file o f th e I n d ia n Wo rk fo rce
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
T ab le A3 . 6 : S tate -wise T o tal L ab o u r F o rce & I n cre ase in L ab o u r F o rce & T rain in g C ap acity (p e r ce n t)
S. No. S. No. S. No. S. No. S. No. State State State State State % to % to % to % to % to T TT TTotal L otal L otal L otal L otal Labour abour abour abour abour % to % to % to % to % to T TT TTotal otal otal otal otal % to % to % to % to % to T TT TTotal otal otal otal otal % to % to % to % to % to T TT TTotal otal otal otal otal Seating Capacity Seating Capacity Seating Capacity Seating Capacity Seating Capacity
F FF FFor or or or orce ce ce ce ce, ,, ,, 2006- 07 2006- 07 2006- 07 2006- 07 2006- 07 I ncrease in I ncrease in I ncrease in I ncrease in I ncrease in L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce I ncrease in I ncrease in I ncrease in I ncrease in I ncrease in in I TI / I TC * in I TI / I TC * in I TI / I TC * in I TI / I TC * in I TI / I TC *
L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce (15- 29 years), (15- 29 years), (15- 29 years), (15- 29 years), (15- 29 years), L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce
2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 2006- 07 2006- 07 2006- 07 2006- 07 (15- 29 years) (15- 29 years) (15- 29 years) (15- 29 years) (15- 29 years)
2016-17 2016-17 2016-17 2016-17 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17
1 Andhra Pradesh 8.6 5.8 8.8 2.3 12.1
2 Assam 2.3 3.3 2.3 4.8 0.6
3 Bihar 6.4 7.1 6.3 15.4 3.1
4 Gujarat 5.3 5.7 5.5 3.1 8.2
5 Haryana 2.1 3.1 2.3 2.8 2.9
6 Karnataka 5.7 4.6 5.6 -0.3 9.8
7 Kerala 3.1 1.2 2.7 -2.4 6.7
8 MP 6.0 7.0 6.2 9.6 3.5
9 Maharashtra 10.3 9.7 10.0 3.6 11.3
10 Orissa 3.8 3.3 3.8 3.4 8.3
11 Punjab 2.4 2.1 2.5 -0.4 3.3
12 Rajasthan 5.8 7.6 6.3 12.7 5.7
13 Tamil Nadu 6.6 1.9 5.9 -8.9 9.0
14 UP 14.4 19.0 14.7 31.7 7.0
15 WB 7.0 5.6 7.0 5.0 1.5
16 Jharkhand 2.5 3.3 2.4 6.4 2.2
17 Chhatisgarh 2.3 2.2 2.2 3.3 1.3
18 Uttarakhand 0.9 1.0 0.9 0.9 0.9
19 Other NE States 1.2 2.0 1.2 2.0 0.5
20 Others 3.3 4.4 3.4 4.9 2.0
Total - South & West
(1+4+6+7+9+13) 39.6 28.9 38.5 -2.6 57.1
Total- East & Centre
(2+3+8+10+14+15+16+
17+19) 46.0 52.9 46.2 81.6 28.1
All States All States All States All States All States 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Source: Source: Source: Source: Based on Commission's projections
37
International Experiences of
Skill Development & Training
4
4.1 Thi s chapt er at t empt s t o revi ew
international experiences of skill development and
training delivery, keeping in view the issues that
are important from a developing country context
and more specifically from that of enterprises and
workers in the unorganised sector. I n Chapter 3,
we have seen that, with 5.06 per cent who had
vocat i onal t rai ni ng as a proport i on of t he
population in the age group 20-24 (Table 3.9),
I ndia fares poorly even in comparison to some of
the devel opi ng countri es such as Botswana,
Colombi a, Mauri ti us and Mexi co, where the
ratios were significantly above 20 per cent. I n
advanced countries, of course, the figures are
mostl y above 60 per cent, wi th the Russi an
Federation and the Republic of Korea having a
staggering 87 per cent and 96 per cent respectively.
The important question is whether it is possible
for I ndia to drastically change this situation with
regard to skill development and training and
whether international experiences can provide
gui deli nes on the di recti ons to be taken and
pathways to be planned. This chapter tries to
revi ew the i nternati onal experi ences i n ski l l
development in general and in the informal sector
in particular.
4.2 As pointed out in Chapter 1, the key
consi derati ons are the pri nci ples that di ctate
systems of training and skill development i.e.,
whether through the educational system or TVET
systems, whether supply-driven or market demand
led, whether for employment confined to pre-
employment training alone or also includes a
process of continuous learning and re-skilling;
who delivers the training and where; and modes
of fi nanci ng the programmes as wel l as the
incentives. While the review below will examine
di fferent systems on the basi s of the cri teri a
ment i oned, here we fi rst bri efl y revi ew t he
trajectory of skill development in the case of
countries that have made the transition to high
levels of development, both developed as well as
developing.
4.3 I n a typology developed by the ADB
(Asian Development Bank, 2004) to discuss the
rel ati onshi p between ski l l devel opment and
training and levels of economic development, it
has been suggested that l evel s of economi c
development roughly corresponded to certain
levels of development of education and training.
I n the earliest stages, when the primary sector is
predominant, manufacturing is characterized by
labour-intensive activities and low value added
production and competitiveness derived from low
costs, basic education and adult education are the
priorities. Higher education is limited to the
gradual development of a basic skills formation
for blue-collar workers. At the next stage, when
the secondary sector becomes predomi nant,
manufactured good and service exports are high
and production concentrates on high value goods
and services, and when competitiveness is based
38
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
on high-technology, high value added goods , universal
secondary education, worker upgrading, and technician
training become the priorities. More specifically, apart
from the universalisation of secondary education, there
is a deepening of vocational and technical education at
the post secondary levels and a widening of the skills to
include teamwork and communication. There is also an
increase in the incidence of enterprise level or on-the-
job training. In the final stage characterized by innovation-
driven growth, leading towards the knowledge economy,
there is a need to increase the rate of innovation, adaptation
and the commercial development of new technologies.
At thi s stage, hi gher educati on wi th sci ence based
learning becomes the priority, along with research and
development.
4.4 Typologies such as the one presented above help
separate the different elements of skill up-gradation
corresponding to different structures of production. As
countries move from a low skill base to a high skill one,
the skill-mix also tends to change and different levels of
education and different types of training (with location
being important) will have elements of skill development
strategies for all levels of skills. However, the pathways
followed by countries that have managed the transition
to high levels of skills and which have in turn translated
into high levels of development have been very different.
This has been on the basis of the institutional structures
put in place to impart different levels of education and
types of skills in the economies.
4.5 The pathways followed by most of the OECD
countries consist of broadening and universalizing access
to education and evolving skill development systems that
were variedly market led and state directed and also
di fferentl y emphasi zed trai ni ng i n i nsti tuti ons and
enterprises. They resulted in outcomes that were spread
across long periods of time. The distinctly different paths
followed by the East Asian countries and Japan, which
achi eved very hi gh l evel s of educat i on and ski l l
development in a very short period of time, brought out
t he i mport ance of consci ous t arget i ng, di rect ed
investments and strong regulation in skill development
programmes. The review below have attempted to bring
out the salient aspects of these different paths adopted.
4.6 I t is useful to distinguish between public and
private institutions for skill development and also on the
basis of where the skilling process is located, i.e., within
the enterprise/firm, in educational institutions and in
institutions outside the firm. The Study Group set up for
t he Second Nat i onal Commi ssi on on Labour has
exami ned vari ous systems of ski ll trai ni ng i n other
countries. These training systems are found to be broadly
of three types - “cooperative,” “enterprise based” and “state-
driven.” The State driven system can be further demand
driven and supply driven. These have been summarised
in the Table 4.1 below.
4.7 I n the cooperative system, there is no single
institution responsible for the planning and delivery of
training. I nstead, the employers’ organisation and trade
unions cooperate strongly for producing the desired result.
Germany is one of the successful examples of this system.
4.8 I n the enterprise-based system as prevalent in
Japan, the educational system provides a foundation of
basi c ski lls, whi ch i s then bui lt upon by employers
through intensive off and on-the-job training. While
vocational and technical schools provide some initial
training, the bulk of skills development is provided and
financed by employers. Employees with few industry-
specific skills on entry are moulded by the system into a
highly skilled workforce that is very adaptable to change.
This kind of system has come into existence in the context
of very low turnover of the workforce, labour having long-
term commitment to the enterprise and enterprises in
turn wanting to invest in the labour force.
4.9 State-driven systems can be divided into two
types. Education and training systems of the demand-
led type, prevalent in the East and South East Asian
economies, have to respond to rapid changes in the
demand for skills. I n this, the governments have played
a key role, especially in meeting the demand for higher
level skills. I n the State-driven systems of the supply-
led type, which were operational in many of the centrally
planned economies of Eastern Europe and the erstwhile
USSR, the trai ni ng system was sustai ned through
government financing. I t puts little or no pressure on
employers to train with the government taking on the
prime responsibility of running training institutes.
39
S SS SSour our our our ource: ce: ce: ce: ce: Second National Commission on Labour, World Development Report, 1998-99
T ab le 4 . 1 : T rain in g S yste m s
System System System System System Countries Countries Countries Countries Countries Main Feature/s Main Feature/s Main Feature/s Main Feature/s Main Feature/s
"Co-operative" Austria, Germany , Switzerland, and many Pressures to undertake training resulting from
countries in Latin America counties strong co-operation amongst employers'
organisations, the state and trade unions
"Enterprise-based" Japan Low labour mobility, lifetime employment for
- Low labour turnover many staff, 'longtermism' arising from absence
of stock market pressure,wage system based
on seniority and enterprise-based trade unions
- Voluntarist The United Kingdom, United States Few institutional pressures on firms to provide
training
"State- driven" Hong Kong , Malaysia, Republic of Korea State plays a leading role in coordinating the
a) Demand-led Singapore, Taiwan, China demand for and supply of skills,Operates in
an open and competitive economic
environment
b) Supply-led Economies in transition, many developing Government takes on a prime responsibility
countries especially in Asia and Africa for formal sector training in training
institutes,Little or no pressure on employers
to train
4.10 The Asian Development Bank in its Report
(ADB, 2004) cl assi fi es syst ems of ski l l format i on
according to training location. According to the report,
training can be in schools as part of the formal education;
in non-formal training centres outside the school system
and within enterprises as discussed below:
School-based Vocational Education &
Training
4.11 Comprehensive High Schools or Diversified
Secondary Education: Vocati onal ski l ls are developed
within secondary schools, typically called comprehensive
or diversified secondary schools, as in the United States
and Sweden. Students take practical courses according
to their interest and aptitude in one single school attended
by all students from a given geographical area, regardless
of their career interests.
4.12 Vocational and Technical Schools: I n the French
model , vocati onal educati on takes pl ace mai nl y i n
vocational or technical schools at the secondary level.
These institutions run parallel to academic schools that
prepare students for higher education. I n France, after
the age of 13 students are tracked into different types of
schools. They may attend vocational schools for 2 or 3
years and earn a Vocational Proficiency Certificate or
Vocat i onal Educat i on Cert i f i cat e; a Vocat i onal
Baccalaureate may be earned after another 2 more years.
These schools serve two purposes: (a) to prepare youth
to work in skilled jobs, and (b) to cater to students that
do not want to pursue long academic studies. A variant
is the technical school (lycee technique), which combines
academic study with technology. The main difference of
these from vocational schools is the greater attention to
academic subjects, and the less attention to specialised
subjects. Graduates are usually trained for supervisory
roles in factories or for highly skilled occupations, e.g.
electronics and drafting. There are several cases of success
wi t h t hi s approach i n Asi an count ri es where
industrialisation has been rapid, such as in the Republic
of Korea and in Taipei, China.
N NN NNo oo oon- F n- F n- F n- F n- For or or or ormal mal mal mal mal T TT TTr rr rrai ni ng Centr ai ni ng Centr ai ni ng Centr ai ni ng Centr ai ni ng Centres es es es es
4.13 Vocational Training Institutes(or Technical Training
Institutes): These are typically operated by ministries of
labour (or community development), and are outside the
school system. Training is thus provided for youth who
have completed their formal education, and certificates,
if conferred, are not recognised as from formal school
I n te rn a ti o n a l E xp e ri e n ce s o f S k i ll D e ve lo p m e n t & T ra i n i n g
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
system. The training can be variable in length - from
modular courses to short duration courses, lasting even
2-to-3 years. These training centres have the advantage
of being focused on one purpose – ‘training for work’,
and i n t heory can modi fy t he cont ent of t rai ni ng
programmes more quickly than schools in response to
changes in the labour market. The clientele may also be
more serious about training, having completed their
formal education and with reduced aspirations for moving
up the educational ladder.
4.14 TheLatin American Model: Training in most
Latin American countries (main exceptions are Argentina
and Mexico, which use vocational schools within the
education system) is based at training centres, and are
designed for both working adults and young school
l eavers. The vari ous t rai ni ng cent res are run
(independently of the education system) by autonomous
training agencies that maintain close links with industry
through strong representation of employers on their
governing bodies. Also significant is their financing,
which is based on a payroll tax (about 1 per cent) paid by
employers. These organizational features have enabled
them to provi de hi gh quali ty trai ni ng and respond
dynamically and flexibly to changing demands of the
labour market. The systems are separate from academic
schools, thereby sheltering ‘training-for-trades’ from the
prejudices against manual occupations and the attractions
of higher education. The training levy provides financial
stability and a long-range planning horizon. These
financial and institutional arrangements have allowed the
i nsti tuti ons to survi ve economi c cri ses and fend off
political interference.
Apprenticeship Training Apprenticeship Training Apprenticeship Training Apprenticeship Training Apprenticeship Training (by by by by by Formal Formal Formal Formal Formal
Sector Enterprises Sector Enterprises Sector Enterprises Sector Enterprises Sector Enterprises)
4.15 TheGerman Model: This model draws heavily
from the apprenticeship systems that developed in Europe
from the middle ages through occupational guilds. The
apprenti ce offers labour to a master craftsperson i n
exchange for a small wage and on-the-job trai ni ng.
Because of its direct links with the labour market, the
apprenticeship approach has proved to be quite efficient
at transferring skills, especially when technology is stable
or changing slowly. I t is also largely self-financing and
does not rely on public financing. At its most sophisticated
form, i t has become complex and structured (as i n
Germany). The famous “ ““ ““dual apprenticeship system” ”” ”” of of of of of
ski l ski l ski l ski l ski ll s tr l s tr l s tr l s tr l s trai ni ng i n Ger ai ni ng i n Ger ai ni ng i n Ger ai ni ng i n Ger ai ni ng i n German man man man many yy yy, combines two basic models:
centre-based training and enterprise-based training. The
syst em i s based on a l ongst andi ng t radi t i on of
apprenticeship that is firmly rooted in German corporate
culture. Theoretical training for about one day per week
is provided by public vocational training centres and
practical training is provided within enterprises about
four days per week. Apprentices sign an employment
contract with an enterprise, which gives them on average
3½ years of formal training under the supervision of a
certified master. Apprentices receive an allowance fixed
by the collective agreement for each branch of training.
The graduates receive a nationally recognized diploma.
While a large part of this training is enterprise-based, it
has evolved in response to co-operative behaviour and
close co ordination among employers’ associations, labour
unions and public administration.
4.16 While these are the overall categories that can
be seen in different countries, these systems cater mostly
to formal sector enterprises. Below, we review the systems
that have been tried out in the case of the informal sector.
Training Systems for the Informal Sector
4.17 Traditional (unregulated) Apprenticeship Training:
Unregulated apprenticeship training has evolved in the
informal sector in many countries over decades. I n fact,
in many countries it may be the predominant form of
training (e.g. in Sub-Saharan Africa and the I ndian sub-
continent). Typicall y, a written or oral agreement is
concluded between a master craftsman working in the
informal economy and parents or guardians, with the
objective of the apprentice acquiring relevant, practical
skills. Sometimes, the master receives a training fee, or
the apprentice must earn the training in exchange for
work or reduced wages. Training consists primarily of
‘ ‘‘ ‘‘observing and imitating the master’ ’’ ’’. The apprenticeship
may l ast for several years and i s product speci fi c.
Traditional apprenticeship has several advantages over
conventional training methods, but also has disadvantages,
as seen in Table 4.2.
4.18 Ni geri a, t hrough i t s Nat i onal Open
Apprenticeship Scheme (NOAS), has recognized the role
of the traditional apprenticeship system. The scheme
41
T a b le 4 . 2 : Ad va n ta g e s / D isa d va n ta g e s o f U n re g u la te d Ap p re n tice sh ip
Advantages Advantages Advantages Advantages Advantages Disadvantages Disadvantages Disadvantages Disadvantages Disadvantages
- practical in orientation,
- self-regulating and self-financing,
- caters to individuals who lack the educational requirements
for formal training,
- serves important target groups (rural populations and urban
poor), and
- generally cost-effective
- gender bias (females rarely participate),
- exclusion of applicants from very poor households,
- perpetuation of traditional technologies,
- a lack of standards and quality assurance
involves the state encouraging employers, including those
in the informal sector, to take on apprentices beyond their
essential needs. Allowances are paid both to the trainee
and to the master, and there is a system for monitoring
t he qual i t y of t rai ni ng. What makes t hi s syst em
particularly interesting is that it has the informal sector
producing state apprentices and “traditional” apprentices
within the same workshop. For one group the master is
being paid by the state, while the others pay for themselves
and make their own traditional arrangements. The duration
of trai ni ng for the new apprenti ces i s less than the
customary group, and the state apprentices are encouraged
to attend some off-the-job training on Saturdays. This
system has not been dependent upon full-time institutional
training, but on expanding access to training within
industry — whether formal or informal.
4.19 Bangl adesh’s Underprivileged Children’s
Education Programme(UCEP) (World Bank Report,
2001) , established in the early 1970s, is an innovative
programme designed for the informal sector that seeks
to raise the living standards of poor urban children and
their families. I t focuses on the target group of working
street children and aims to provide them with skills to
enhance their employability in the local labour market,
often in the informal sector. UCEP is conducted in 30
general schools for non-formal basic education working
on three shifts per day in four major cities of Bangladesh.
Total enrolments are about 20,000. Skill training is given
in three training institutions working on two shifts each,
t rai ni ng a t ot al of 1,400 t rai nees. UCEP has
extraordinarily high completion and employment rates
for its graduates, both averaging about 95 per cent.
4.20 UCEP’s programme can be divided into three
stages. (a) First stage is accelerated non-formal basic
education starting at age 10 or 11. About half of the
graduat es f rom t he non- f ormal basi c educat i on
programme are admitted into vocational training. (b)
Second stage consists of fundamental skills training which
may vary in length from six months to two years. (c)
Third stage is placement in employment and follow-up
on the job.
4.21 Factors that have contributed to making UCEP
successful include:
• Providing students with a solid base of general
education.
• Focusing on the target group, those who intend
to enter the labour force after training as semi-
skilled workers.
• Conti nuous l i nkages wi th i ndustry, whi ch
ensure that trainees are trained in the knowledge,
skills and attitudes sought by employers, and
al so t hat empl oyers are aware of t he
competencies of UCEP graduates.
• Focus on acquisition of skills and competencies
t hrough hi ghl y st ruct ured, super vi sed
individual “hands-on” instruction (rather than
being driven by credentials and certificates).
• Rigorous follow-up of the graduates in terms
of employment, earnings and performance on
the job.
4.22 An aspect of informal employment that needs to
be addressed in developing economies that underwent
restructuring is that of retrenched employees, who fall
back on the informal sector. An initiative that needs to
be mentioned here is from China, where the Ministry of
Labour and Soci al Securi t y has i nt roduced a re-
employment training programme for the unemployed and
laid-off employees, referred to as the Three Years Ten
Million Re-employment Training Programme. During
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1998-2000, this programme aimed at giving training to
10 million people, employees laid off from SOEs and
the unemployed, in order to raise their vocational skills,
generating market awareness and assist them towards re-
employment. During the execution of this re-employment
training programme, the Ministry set the 1-3-1 goal, i.e.
each laid-off employee in an enterprise re-employment
centre is entitled to one occupational guidance interview
free of charge, three briefings of employment information,
and one training opportunity free or partially free of
charge. Vocational training centres, technical training
schools under labour and social security departments,
other training institutions, including those run by NGOs,
the trade unions, the women’s federations, and youth
leagues, were the major institutions undertaking re-
employment training workshops.
4.23 An important feature of this programme is that
thi s trai ni ng i s extended expl i ci tl y to those whose
economic position is below the socially acceptable levels.
For example, in a certain province, those eligible for this
training were whose family average income is lower than
the standard which qualifies for social assistance, or who
are under a certain age (40 for males, 35 for females),
and they can attend one vocational training course that is
longer than a month, free of charge, if they can pass a
given test. I n another province, re-employment training
and service are linked with the provision of basic living
allowance in an effort to change the provision of basic
living allowance to the provision of training opportunities
and jobs. I t is reported that about 75-80 per cent of the
trainees can find satisfactory jobs or start up their own
businesses. By the end of 2000, a total of 13.6 million
laid-off employees, 11 per cent more than the set target,
had been exposed to re-employment training.
4.24 Another major informal sector training initiative
from China consists of the China Rural Employment
Promotion Project. The participants are mainly local
households in selected counties where micro-loans are
provided as a means of supporting low-income households
to be self-employed or to form partnerships in starting
small businesses. The project provides vocational training
to applicant households, helps them to make a business
plan, and provides micro-lending and assistance in their
business operations.
4.25 A flexible skills training is an essential part of
the project which focuses on resident communities and
households So training courses are organised near where
they live. This enables training courses to be closely linked
to local requirements. I t combines theoretical teaching
with practice, classroom presentation with follow- up
and collective teaching with individual tutoring and
combines training with employment support. The project
also combines training with local industrialization. There
are examples of counties that offer up to 3,000 Yuan to
rural households that are willing to have jobs locally.
This financial support helps them to be self-employed.
I t also serves as a launching fund to help them start up
their own businesses. They are also entitled to preferential
policies as they can be exempted from some fees and get
free access to some facilities.
4.26 Kenya’s J ua Kali (i nformal sect or) proj ect
( Johanson & Van Adams, 2004), funded by I DA, is a
well-quoted informal sector training initiative that is
oriented entirely towards markets. I t was aimed at: (a)
providing skills and technology upgrading for about
25,000 i nformal sector manufacturi ng workers; (b)
increasing the access of informal sector entrepreneurs to
services; and (c) improving the policy and institutional
environment by removing restrictive laws and policies.
A key feature of the project is a voucher programme
intended to introduce consumer choice, enabling informal
sector operators to purchase the training wherever they
want. I ntermediaries / allocation agencies were selected
by competitive tender to market, allocate, and redeem
vouchers i n a decentrali zed way throughout Kenya.
Allocation agencies received a fee equal to 3 per cent of
the value of vouchers issued. Vouchers could be used for
any kind of training from any registered training provider.
Over the course of the project, about 700 training providers
became pre-qualified for providing training. By early 2001,
some 18,000 training vouchers had been issued.
4.27 The impact of the project, evaluated through
two studies, has been highly positive for the beneficiaries.
Employment among the graduates had increased by 50
per cent compared with employment before training, and
the income of surviving enterprises had also increased
by 50 per cent. According to anecdotal evidence, some
43
participants who received a voucher for basic training
have paid the full cost of more advanced training. One
unexpected outcome of the voucher training programme
was the emergence of a new kind of training provider -
the skilled master craftsperson. The strong preference of
Jua Kali workers for appropriate, accessible training by
master crafts persons was revealed in the first phase of
the project: 85 per cent of all vouchers went to pay for
the services of master crafts persons, and only 15 per
cent went to private and public training institutions.
4.28 Some important lessons include:
(a) The use of a voucher mechanism enabled the
proj ect t o st i mul at e demand for t rai ni ng,
t echnol ogy, management and market i ng
consultation among micro and small enterprises.
A supply response has been generated and a
training market established to address the needs
of micro enterprises.
(b) An unexpected impact of the voucher training
programme was t he emergence of ski l l ed
craftsmen as the leading providers of training.
Entrepreneurs preferred the training services of
master crafts persons in the informal sector to
training in formal institutions. The training
by master crafts persons was usually well adapted
to the entrepreneurs’ need for short duration,
practical training. These training providers were
previously invisible to agencies that wished to
pay for these trainings directly.
(c) The implementation experience underscores the
importance/viability of appropriate management
arrangements - a project for the private sector is
best managed by t he pri vat e sect or, wi t h
government best playing a facilitator’s role.
Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences
4.29 Thi s chapt er has out l i ned t he maj or
characteristics of international skill development and
training experiences and systems. The review has brought
out the lessons that can be drawn for a country like I ndia
with a very large informal sector and massive numbers of
poorly educated people with a low level of formal skills.
4.30 I t has been seen that comprehensive systems of
skill development that exist internationally are primarily
f or t he f ormal sect or. I n count ri es of East Asi a,
characterized as state-led, demand driven systems, it is
universalisation of basic education, enlarging the coverage
of secondary education and developing a vibrant system
of vocational education that laid the foundation towards
speci f i cal l y t arget i ng ski l l s desi gned t owards t he
workplace. Strengthening the educational system and
universalizing access is thus an essential prerequisite for
widespread skill development, particularly when the skill
mix requires changes to accommodate the needs of greater
integration with the knowledge economy.
4.31 While training systems might be supported by
t he government , especi al l y i n a si t uat i on where
externalities limit the extent to which private initiative is
forthcoming, it is essential to tailor training to employment
as much as possible. Evolving systems of apprenticeship
and enterprise-based training that allow trainees to use
their skills, with suitable incentives provided to employers
and those trained, is essential. Further, training needs
assessment needs to be a joint exercise between those
who need trained manpower (employers), those who need
to be trained (workers) and those who evolve systems
and frameworks (the state), as successful experiences
demonstrate.
4.32 Further, in rapidly changing economies which
also undergo restructuri ng and retrenchment, large
numbers of workers who hitherto belonged to the formal
sect or woul d become i nf ormal sect or workers.
Programmes of retrai ni ng such as those i n Chi na
demonstrate that support from the government becomes
essential to equip workers to make themselves available
for the market by anticipating demand, which might not
automatically take place.
4.33 I nteresti ng experi ences of the programmes
designed explicitly for the informal sector in different
countries might offer guidelines for a country like I ndia
to design a system. For example, making the local area or
district the focus of training programmes for employment
as in China will enable a matching of needs of people
and that of the markets. Targeting training towards the
poorest households and linking it up with employment
in local areas is also a useful initiative for poor informal
sector workers.
4.34 The l essons from i nternati onal experi ences
notwithstanding, it also needs to be kept in mind that the
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
need for I ndia is to achieve a major turnaround in its
skill profile. The sheer magnitude means that no single
experience might be directly relevant or replicable. This
is because the ‘initial conditions’ that I ndia is faced with
are very different from those that confronted either the
OECD countries or the East Asian economies as they
went about developing their skill and training systems.
These consist, first and foremost, of the preponderance
of the unorganised sector and informal employment in
the economy and an abysmally low level of formal skill
availability by even developing country standards. At the
same time, a fairly elaborate structure of institutions and
systems of education and training, exist in the country,
al t hough cat eri ng onl y t o a smal l segment of t he
population. So while international experiences can provide
ideas and guidelines on how to go about the formidable
t ask of expandi ng t he ski l l base of t he economy
substantially, the structure that needs to be evolved has
to be specific and keeping in mind the structure and
dynamics of the economy.
45
System of Skill Development
in India
5
5.1 Until now we examined the rationale and
requi rements of a sui table ski ll development
syst em for t he vast maj ori t y of t he I ndi an
workforce, located in the informal sector. We have
also traced the contours of the availability of skills
in the economy and the congruence between
poverty, low levels of educati on and the ski ll
deficit. These trends are seen despite a vast array
of institutions and initiatives over the entire post-
I ndependence period which have attempted to
address the issue of generating the requisite skill
base. I t is essential to review these systems that
exist as a result of direct state participation in the
skilling process as well as through various non-
state initiatives. This chapter evaluates separately
government and non- government ski l l
development systems that exist in I ndia. Various
programmes, their objectives, coverage, sectoral
focus and modes of imparting are evaluated.
5.2 I n I ndi a, ski l l format i on i s broadl y
through general education as a provider of generic
skills. Vocational education and training provide
marketable i ndustry speci fi c ski lls for better
employability. Other than basic primary education,
skill formation efforts consist of:
• Vocational education,
• Vocational training,
• Sector specific programmes to address
i ssues of ski l l f ormat i on and
enhancement
5.3 Wi t hi n vocat i onal t rai ni ng, we can
distinguish between the formal system and the
informal system, both of which take place under
the aegis of the government as well as private and
non-government agencies. Broadly, there are four
syst ems t hat cat er t o t rai ni ng needs: t he
government al f ormal t rai ni ng syst em, t he
governmental system that focuses exclusively on
the informal sector, the non-government (private
as well as NGO) network of formal trai ni ng
i nsti tuti ons and the non-government (mostly
NGO- l ed) pri nci pal l y non- formal t rai ni ng
programmes for the informal sector.
5.4 The Commission recognizes that these
are not wat ert i ght compart ment s. The
governmental systems rely on private or non-
governmental training providers and trainers and
there is a further step up in this direction as
governments i ncreasi ngly take on the role of
facilitators and coordinators. Further, as seen in
the previous chapter, systems of formal vocational
training, however limited they are in terms of
numbers i n compari son t o t he si ze of t he
workf orce, have resul t ed i n onl y a smal l
proportion of those trained being absorbed in the
formal sector of the economy. Others, who have
been formally trained, in fact, find jobs in the
i nformal sector, possi bl y i n the upper rungs,
const i t ut i ng i n f act a part of t he i nf ormal
workforce, apart from the informally trained and
untrained part of the workforce.
46
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Part A: Governmental Initiatives
5.5 I n the present section we focus on governmental
i ni ti ati ves, both formal and i nformal , whereas the
following one looks at the initiatives by the private sector
and NGOs. At present, the total training capacity of the
public sector is estimated to be around 3.8 million. The
details are given in appendix 5.1 to the Chapter.
Vocational Education
5.6 Vocational education remains within the broader
school curriculum and involves provision of specific skills
to increase employability of the students on completion
of formal education. Vocational training is especially for
a particular trade or economic activity and is conducted
outside the schooling system. Box 5.1 illustrates the
progress in vocational education in I ndia.
5.7 There are t hree cat egori es of vocat i onal
education prevalent in I ndia today - at the lower school
and 10+2 stages and at the specialised level. The system
B o x 5 . 1 : Vo catio n al E d u catio n in I n d ian P lan n in g
I n 1947, there were only 46 engineering colleges and 53 polytechnics with an annual intake of 6,240 students.
Due to the initiatives taken during successive Plan periods, and particularly because of large-scale private sector
participation, the number of All I ndia Council of Technical Education (AI CTE) approved technical and
management institutions has risen to 4,791 in 2001-02 with an annual intake of 6.7 million students.Almost every
Five Year Plan contributed to the strengthening of the vocational education system in the country. The Second
Five Year Plan, for example, provided for the establishment of 38 junior technical schools for students in the age-
group 14-17 and these numbers kept on increasing in the subsequent years. Vocationalisation of education at the
higher secondary stage was one of the important reforms included in the Sixth Plan. Measures were initiated to
establish the necessary links combining vocationalisation, skill training, in-plant apprenticeship and placement in
gainful employment as composite parts of an integrated effort to raise the level of utility of the programme, and its
wider acceptance and success. I n the following Plans, facilities for vocational education were diversified into
commerce and services. During the 9th Five Year Plan, the scheme for Vocationalisation of Education at 10+2
stage was introduced to regulate admissions at college level. The purpose was to divert at least 25 per cent students
of 10+2 stage to self-employment or wage-employment, while providing them with vocational competence in a
field of their choice.
The Tenth Plan has emphasized that vocational system should be a separate stream within the secondary education
system, rather than being imparted through separate educational institutions. I t should also establish greater
linkage with vocational training and academic education to provide for vertical mobility for students aspiring for
higher professional programmes in polytechnics, universities and engineering colleges.
The Eleventh Five Year Plan has recognised the importance of expansion and strengthening of the system of
Vocational Education and Training (VET) in the country. I t, inter-alia, provides for expansion of vocational
training, modernizing I TI s, adding relevant skills, and public-private partnership model for training.
of vocational education is administered by the Ministry
of Human Resource Development. At the lower school
stage, a scheme of pre-vocational education at lower
secondary level was started in 1993-94 to impart simple
marketable skills and to develop vocational interests.
The centrally sponsored scheme of Vocationalisation of
Secondary Education at +2 level is being implemented
since 1988. The main objective of the scheme is to
enhance individual employability, reduce the mismatch
between demand and supply of skilled manpower and
provide an alternative for those pursuing higher education
without particular interest or purpose. The scheme is
implemented in both formal and non-formal sectors. I n
the formal sector, the scheme is implemented by the State
Governments at +2 stage of 10+2 scheme, through 9500
schools spread all over the country. The total training
capacity is estimated at about 10 lakhs per annum. More
than 150 courses are offered in 6 major disciplines covering
the broad areas of agriculture, business and commerce,
engineering, technology, health and paramedical services,
47
home sciences and services. These courses are selected
on the basis of the assessment of manpower requirements
through district vocational surveys. After the completion
of a two-year course, the students can undergo a year’s
apprenticeship under the Apprenticeship Act.
5.8 The vocational education system suffers from
def i ci enci es such as a l ow component of general
education, poor linkages between the vocational education
and general education streams and between the vocational
education and vocational training streams. Further, the
system of basic education itself needs to be strengthened
in the interests of skill acquisition. Education being a
foundational skill, the focus on skills needs to start at the
level of basic education through enlarging access and
improving quality.
5.9 I t also needs to be noted that although the links
between vocational education, vocational training and
actual employment are considered to be weak, there is a
paucity of information from the labour market. This has
to be addressed adequately through evolving effective
systems of feedback.
Vocational Training
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining P aining P aining P aining P aining Pr rr rrog og og og ogr rr rrammes ammes ammes ammes ammes
5.10 The Ministry of Human Resource Development
and the Ministry of Labour and Employment are the
two major Ministries responsible for formal skill training.
While the Ministry of Human Resource Development
coordi nates the development of techni cal educati on
through degree courses, diplomas and certificates offered
by universities, technical institutions and polytechnics,
the Ministry of Labour coordinates the development of
techni cal educati on through the I ndustri al Trai ni ng
I nstitutes and the I ndustrial Training Centres, as also the
industrial apprenticeship system discussed below. Formal
vocational training system demands a minimum level of
education, generally higher secondary in the case of the
systems coordinated by the MHRD and middle school
in the case of the training systems coordinated by the
MOLE, which , automatically implies the exclusion of
those with lower levels of education.
5.11 Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development:
Polytechnics offer diploma-level courses to meet training
needs of manpower for industry at the supervisory level.
The All I ndia Council of Technical Education (AI CTE)
approves di pl oma programmes i n engi neeri ng and
architecture, hotel management and catering technology
and pharmacy. There are 1244 polytechnics run by HRD
Ministry with a capacity of over 2.95 lakhs offering three-
year diploma courses in various branches of engineering
with an entry qualification of High School. Besides,
there are 415 institutions for Diploma in Pharmacy, 63
for Hotel Management and 25 for Architecture.
5.12 Minist Minist Minist Minist Ministr rr rry of y of y of y of y of Labour and Emplo Labour and Emplo Labour and Emplo Labour and Emplo Labour and Employment: yment: yment: yment: yment: The two
flagship schemes of Directorate General for Employment
& Training under Ministry of Labour and Employment
are: Craf t smen Trai ni ng Scheme (CTS) and
Apprenticeship Training Scheme (ATS). The CTS
provi des i nst i t ut i onal t rai ni ng whereas ATS i s a
combination of institutional as well as on the job training
i n whi ch trai nees are exposed to real li fe i ndustri al
environment.
5.13 Cr Cr Cr Cr Craftsmen aftsmen aftsmen aftsmen aftsmen T TT TTr rr rraining Sc aining Sc aining Sc aining Sc aining Scheme(C heme(C heme(C heme(C heme(CTS): TS): TS): TS): TS): The CTS
is implemented through 1987 I TI s run by the state
governments. I n addition, 4847 I TCs in the private
domain implement the CTS on the same pattern as I TI s.
Training courses are available in 110 trades. The courses
aim to impart the basic skills and knowledge so as to
prepare the trainees both for wage employment as semi-
ski l l ed worker or Juni or Execut i ves or f or sel f -
employment. The entry level quali fi cati ons for the
trainees are: Age 14 to 40 years no upper age limit for
women in women exclusive I TI s/women wings in general
I TI s and education of 8
-
-12
th
class. The duration of the
training varies from six months to 3 years depending on
the trade chosen. A total of 9.33 lakhs training seats are
available at the I TI s throughout the country (Government
I TI s – 4.06 lakhs and private I TCs – 5.27 lakhs). Over
47,000 seat s are excl usi vel y f or women t rai nees.
Reservat i ons f or SC / STs, di sabl ed, OBCs, ex-
servicemen etc. are made as per government directives.
About 70 per cent of the training period is allotted to
practical training and the rest to subjects relating to trade
theory, workshop calculation & science, engineering
drawing & social studies. There is also the provision for
grant of stipend and workshop uniform to all the trainees
of Govt. I TI s.
S yste m o f S k ill D e ve lo p m e n t in I n d ia
48
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.14 All I ndia Trade Tests of Craftsmen is conducted
under the aegis of the National Council for Vocational
Training (NCVT) and successful candidates are awarded
National Trade Certificate (NTC) which is recognized
for the purpose of recruitment to subordinate posts and
services under the Central Government.
5.15 Apart from I TI s/I TCs, Craftsmen Training in
22 trades is also imparted through 6 Model Training
I nsti tutes (MTI s) attached to 5 Advanced Trai ni ng
Institutes (ATIs) and one Central Training Institute (CTI)
under the DGE&T. Besi des, Nati onal Vocati onal
Training I nstitute (NVTI ) and 10 Regional Vocational
Training I nstitutes (RVTI s), with about 3000 training
seats, have been imparting training exclusively to women.
I n order to reorient the training modules as per the
changing skill requirements of the industries, Craftsmen
Trai ni ng on modular pattern i s offered i n 4 Model
I ndustrial Training I nstitutes (MI TI s) under DGE&T.
5.16 A AA AAppr ppr ppr ppr pprenti ceshi p enti ceshi p enti ceshi p enti ceshi p enti ceshi p T TT TTr rr rrai ni ng Sc ai ni ng Sc ai ni ng Sc ai ni ng Sc ai ni ng Scheme heme heme heme heme: :: :: Formal
apprenticeship, introduced through the Apprenticeships
Act of 1961, requires employers in notified industries to
engage apprenti ces i n speci fi ed proporti ons of the
workforce Apprentices obtain training for periods ranging
from six months to four years at the end of which they
are tested by the NCVT. The successful candidates are
awarded Nat i onal Apprent i ceshi p Cert i f i cat es.
Apprenticeship Training for the school leavers and I TI
passed out persons is offered through a network of 23,800
establishments in 187 designated trades. As on 30
th
June,
2007 1,85,224 training seats for the trade apprentices
have been utilised against 2,58,163 seats identified. The
training is designed to utilize fully the facilities available
in industry for imparting practical / on-the-job training
in the industrial environment to the apprentices to enable
t hem meet t he requi rement s of t he i ndust ry f or
employment. All I ndia Trade Tests (AI TT) for trade
apprentices are conducted twice a year, and National
Apprenticeship Certificates (NACs) are awarded. Stipend
is paid as per the Government notification. Six Regional
Directorates of Apprenticeship Training (RDAT) at
Mumbai, Kanpur, Faridabad, Kolkata, Hyderabad and
Chennai , have been set up for i mpl ement i ng t he
Apprenticeship Training in the Central Government
PSUs/Establishments.
5.17 Assessments of formal training systems in I ndia
often argue that the qual i ty of vocati onal trai ni ng
institutions is not very good. Evaluations of the I TI s have
shown that there is a great variability in the quality of
different I TI s reflecting differences across states and also
the characteristics of individual I TI s. Many states have
encouraged the creation of new I TI s to cover new areas
but without adequate preparatory work or resource input
or effective follow up action. The following deficiencies
have been noted, with different points being emphasized
in different reports, by the Special Group on Targeting
Ten Million Employment Opportunities per year over
the Tenth Plan period set up by Planning Commission,
under the Chairmanship of Dr S P Gupta, Task force on
Empl oyment Opport uni t i es set up by Pl anni ng
Commission, under the chairmanship of Shri Montek
Singh Ahluwalia, the National Knowledge Commission,
the Eleventh Five Year Plan and the Task Force on Skill
Development.
• Much of the training provided in the I TI s is
for skills for which there is little demand. The
curriculum has not been revised for many years
and was therefore not attuned to current market
requirements. Some revision has taken place
recently but a lot remains to be done. One reason
for the lack of attention to market requirements
is the lack of involvement by the industry in
the management of the I TI s.
• The transfer of skills too needs improvement
and the testing process at the end needs to be
made more reliable. All Government I TI s and
private I TI s affiliated with the NCVT as well
as t he pri vat e t rai ni ng i nst i t ut es runni ng
DOEACC accredited courses rel y on formal
cert i fi cat i on by an i ndependent aut hori t y.
However, t here i s wi despread percept i on
amongst empl oyers t hat st udent s obt ai n
cert i f i cat es even t hough t he act ual ski l l s
acquired are very poor.
• The facilities and infrastructure in most I TI s
are i nadequate, wi th obsolete equi pment i n
laboratories and workshops. Maintenance is also
poor. These deficiencies reflect the scarcity of
resources with the state governments in I ndia.
49
They have been exacerbated by the tendency
to create new institutions in places where they
do not exist, even though existing institutions
are under-funded and under- utilised.
• There is shortage of suitably trained faculty in
most I TI s.
• There is hardly any follow- up of the trainees,
and the courses remai n rather obsolete and
pi ecemeal. Placement of graduates i s not a
certainty.
• Most of the I TI s in the state sector and the
institutes for advanced training and training of
instructors under the Ministry of Labour, are
organi sed as subordi nat e of f i ces of t he
Government . These t rai ni ng and t rai ni ng
related establishments should be restructured
as “autonomous bodies”.
• The apprenticeship scheme too has its own share
of problems. The major problem relates to the
quality of training, which varies according to
the nature of the firm. Bulk of the apprenticeship
places are in public sector firms. Private sector
f i rms general l y do not compl y wi t h t he
requirements. One of the problems that have
arisen is that apprentices view apprenticeship
pri mari l y as an avenue f or subsequent
employment rather than a mode of training.
Although the law clearly does not entitle them
to employment, the courts have interpreted the
law to mean that apprentices must get preference
i n empl oyment opport uni t i es wi t hi n t he
company where they were trained. This tends
to discourage employers from fulfilling their
obl i gat i ons under t he Act . The Worl d
Employment Report (I LO, 1998- 99, p.70)
notes that training systems in I ndia are a typical
example of Central Government driven, supply-
led ones, with the Government taking on the
pri me responsi bi l i t y for t he formal sect or
training in training institutions. There is little
or no pressure on empl oyers to trai n. The
Government of I ndia too accepts this position
(GOI , 2001, p.6.23). I t has been noted by the
Second National Commission on Labour that
t he apprent i ceshi p syst em has i nadequat e
coverage of ski l l requi rement s, mi smat ch
bet ween demand and suppl y and l ack of
f l exi bi l i t y i n t he engagement of t rade
apprentices within the same trade group. I t has
also been argued that a predominant proportion
of the educational and training resources of the
formal i nst i t ut i onal st ruct ure i s somehow
directed to the formal sector and the ‘upper end’
of medium and small-scale enterprises, many
of them in the informal sector. There is a strong
orientation towards the use of machines, a very
marked gender division of training and curricula
(an assumption that girls will go for beautician
courses whereas boys will be fitters and motor
mechanics). Further, the numbers trained are
very low, as chapter 3 showed.
5.18 Several initiatives have been taken to strengthen
the I TI system. These include: (i) Establishment and
upgradation of I TI s in North-Eastern States, Sikkim and
State of Jammu and Kashmir, (ii) Upgradation of 500
I TI s (100 from domestic funding and 400 from World
Bank assistance) into Centres of Excellence and (iii) Up-
gradati on of the remai ni ng 1396 Government I TI s
through Public Private partnership by providing interest
free loans up to Rs. 2.5 crores per I TI .
5.19 The government training/skill-building efforts,
such as the ones outlined above, have not been directed
explicitly towards the informal sector, or at least not
towards the most vulnerable informal workers. The above
review of the governmental system of formal training
demonstrates this. This has also been emphasized by the
Second National Commission on Labour, which notes
that the structural characteristics of the informal sector
require specific interventions that take on board these
charact eri st i cs. However, t he di st ri ct l evel st udi es
conducted by the Commission show that very large
numbers of people who pass out of I TI s, i.e., those who
receive formal training either start their own enterprises
or go for wage employment in informal sector. However,
what is required are training schemes that take on board
structural characteristics of the informal sector and target
those at the lower ends.
5.20 I nitiatives that target the informal sector are
discussed in the following paragraphs.
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50
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Informal Government Training Programmes
5.21 A large number of ministries / departments,
commi ssi ons, counci l s, aut onomous bodi es and
institutions as well as such bodies where there is a public-
private partnership undertake informal skill development
programmes which are targeted at either the smaller
formal sector enterprises or the informal sector workers.
Most of these schemes and programmes are administered
at the fi eld level by the respecti ve departments and
agencies of the Central/state governments or other non-
government organisations identified for the purpose. The
funds flow downwards and the state governments are
usual l y assi gned the task of i mpl ementi ng as wel l
monitoring the skill formation programmes on a routine
basis. Alternatively, there are a number of programmes
for which the voluntary organisations are also entrusted
the task directly by the Central Government departments.
5.22 The multiplicity of ministries, institutions and
agencies that cater to skill development presently results
in a plethora of initiatives that run independently with
little coordination or standardisation. The initiatives by
different ministries vary depending on their mandate, but
the effect often remai ns pi ecemeal, although i n the
aggregate, the system is very large. Thereneedsto bea
coordinating systemthat attemptsto dovetail and consolidate
theseseemingly disparateprogrammeswith common objectives.
Recent policy responseshavemoved in thisdirection.
5.23 Some of the major programmes/schemes under
the aegis of different ministries under the governmental
system that focus on skill development based principally
on the needs of the informal sector are summarized below.
Ministry of Human Resource Development
5.24 Community Polytechnicsas a scheme started in
1978-79 under direct Central assistance by Government
of I ndia to harness the scientific / technical knowledge
available with the polytechnics to secure community /
rural development. Community Polytechnic activities are
a part of an existing AI CTE approved polytechnic. The
polytechnic is entrusted to undertake rural / community
development acti vi ti es i n i ts proxi mi ty through the
application of science and technology, making use of
infrastructure available in polytechnics. Presently, 669
diploma level institutions are implementing the scheme
of Communit y Polytechnics training about 3,31,000
trai nees a year. The mai n acti vi ti es of Communi t y
Polytechnics are:
a) To provide training in need based, non-formal
skills/trades to unemployed youth, women, SCs/
STs, mi nori ti es, school dropouts and other
disadvantaged sections of the community to
enabl e t hem t o obt ai n gai nf ul sel f / wage
employment .
b) To devel op and i mpl ement i nnovati ve and
economical ideas for rapid adoption of the latest
technology by the community in and around
t he communi t y pol yt echni c (Technol ogy
Transfer).
c) To provide technical/ support services to the
rural community.
d) To di ssemi nat e i nf ormat i on and creat e
awareness regarding latest technology and its
applications among the community.
e) To undertake survey for ascertaining the felt
needs of t he communi t y wi t h regard t o
manpower training and adoption of affordable
technology by the community.
5.25 There is no age and qualification bar for the
trainees under the scheme. The skill development is
imparted through short term training courses of 3- 6
months duration. However, no course fee is charged from
the trainees.
5.26 Jan Shikshan Sansthan (JSS) is an institutional
framework for offering vocational training programme
to disadvantaged groups of adults such as neo-literates,
less-educated slum dwellers, SC and ST and women etc.
to raise their efficiency and increase their productive
ability. I t also provides academic and technical resource
support to District Literacy Societies (Zilla Saksharta
Samitis). NGOs having a three year old track record are
identified for the implementation of such programmes
as may be needed. Based on their location and past
performance, JSSs are grouped in three categories and
provided financial assistance accordingly.
5.27 National I nstituteof Open Schooling (NI OS)
[Continuing Education and DistanceLearning]: was set up
in 1989 as an autonomous organization with a view to
51
provide a flexible educational opportunity for persons who
wish to study and qualify for a better tomorrow. NI OS
desi gns i ts own curri cul um, prepares i nstructi onal
materi al s i n pri nt and el ectroni c modes, conducts
examination and certifies students up to pre-degree level.
5.28 Keeping in view the needs of target groups, the
thrust is on providing more vocational and community-
oriented courses in addition to general and academic
courses. NI OS offers several vocational courses up to
pre-degree in the broad areas of Agriculture, Engineering
and Technology, Health and Paramedical, Home Science,
Computer Science and I nformation Technology, Library
and I nformati on Sci ence, Busi ness and Commerce,
Secretarial Practice and other general, vocational and life
enrichment areas. The NI OS operates its Vocational
Education Programme through Accredited Vocational
I nstitutes (AVI s) and Special Accredited I nstitution for
Education of the Disadvantaged (SAI ED) catering to
the disadvantaged sections of the learners.
5.29 There are two types of Vocational Education
courses offered by NI OS: (a) Package courses consisting
of two or more modules / papers/subjects, a certificate
which can only be given after passing all the modules /
papers of a package course. The course is of a certificate
or diploma level having duration of 6 moths and more;
(b) Stand-alone vocational subjects / courses are primarily
offered through Accredited Vocational I nstitutes (AVI s)
and can be combined with academic subjects along with
a facility of credit transfer in lieu of one academic subject.
However, a stand-alone subject can also be offered
independently as a vocational course. As on February, 2007,
the country had 999 vocational NI OS.
Ministry of Labour and Employment
5.30 Skill Development Initiative(SDI) is a recent
scheme , initiated in 2007, as a five year project. During
this period one million persons would be trained or their
exi sti ng ski l l s tested and certi fi ed under Modul ar
Employable Skills (MES) framework. The objectives
of the scheme are (i) to provide vocational training to
school leavers, existing workers, I TI graduates, etc. to
improve their employability by optimally utilizing the
infrastructure available in govt., private institutions and
the industry. Existing skills of the persons can also be
tested and certified under this scheme, and (ii) to build
capaci ty i n the area of development of competency
st andards, course curri cul a, l earni ng mat eri al and
assessment standards in the country.
5.31 MES would benefit different target groups like:
(i) workers seeking certification of their skills acquired
informally, (ii) workers and I TI graduates seeking skill
upgradat i on, (i i i ) earl y school drop- out s and t he
unemployed, and (iv) previously child labour and their
families. The minimum age limit for persons to take
part in the scheme is 14 years but there is no upper age
limit.
5.32 The key features of the scheme are:
• Demand-driven short term training courses
based on Modular Employable Skills (MES)
decided in consultation with industry. MES is
the ‘minimum skills set ’ which is sufficient for
gainful employment.
• Central Government will facilitate and promote
training while industry, private sector and state
governments will train the persons.
• Optimum utilisation of existing infrastructure
to make training cost effective.
• Fl exi bl e del i ver y mechani sm (part t i me,
weekends, full time, onsite/ offsite) to suit needs
of various target groups.
• Different levels of programmes (foundation level
as well as skill up-gradation) to meet demands
of various target groups.
• The services of existing or retired faculty or
guest faculty to be utilized.
• Courses would also be available for persons
having completed 5th standard.
• Test i ng & cert i fi cat i on of ski l l s acqui red
informally.
• Testing of skills of trainees by independent
assessing bodies, which would not be involved
in training delivery, to ensure that it is done
impartially.
• The essence of the scheme is in the certification
that wi l l be nati onal l y and i nternati onal l y
recognized.
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52
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.33 The t rai ni ng under SDI scheme wi l l be
provided by various VTPs under Central Government,
state governments, publ i c and pri vates sector and
i ndust ri al est abl i shment s. VTPs wi l l provi de
counselling and vocational guidance, training facilities
as per norms, impart good quality training, post training
support to trai nees i n getti ng employment, mai ntai n
data base on trai nees trai ned and the outcome of the
trai ni ng. They wi ll track the trai nees for three years
or ti ll they get gai nfully employed. VTP wi ll also be
requi red to have close networki ng wi th the i ndustry
for i mmedi ate placement of the trai nees. Fol lowi ng
cat egori es of Educat i onal and Trai ni ng I nst i t ut es
havi ng requi si t e faci l i t i es for conduct i ng t rai ni ng
courses woul d be el i gi bl e f or becomi ng VTP f or
conducti ng MES courses: (i ) I nsti tutes (i ncl udi ng
autonomous institutes) set up by Central Government
/ State Governments / UT Administrations, (ii) Private
I nsti tutes of repute affi li ated/ accredi ted to a Board /
Uni versi ty / Counci l (NCVT, AI CTE etc.) set up by
Cent ral Government / St at e Government s / UT
Admi ni st rat i ons, and (i i i ) Any ot her t ype of
i nsti tuti ons/ bodi es approved by Apex commi ttee
5.34 The trai ni ng fee has been set as follows: i .
Rs. 500 per module for modules havi ng durati on up
to 90 hrs; i i . Rs. 1000 per module for modules havi ng
durati on from 91 to 180 hrs; i i i . Rs. 1500 per module
for modules havi ng durati on from 181 hrs to 270 hrs;
v. Rs. 2000 per module for modules havi ng durati on
more than 270 hrs. Candi dates belongi ng to SC/ ST
category and women wi ll be gi ven relaxati on of 25
per cent i n trai ni ng fee. I n order to moti vate trai nees
to take the trai ni ng programme seri ousl y, trai ni ng fees
of all those trai nees who successfully complete the
trai ni ng would be refunded to them. Trai ni ng cost @
Rs 15/ - per person per hour wi ll be rei mbursed to
regi stered VTPs i n respect of those successful persons
who got training from it. VTPs will reimburse training
fee to the successful candi dates. A one ti me advance
of Rs. 3.00 lakhs wi ll be pai d to each govt. I TI so
that they can start courses under the SDI scheme.
Testi ng fee wi l l be Rs 500/ 800. The testi ng fee wi ll
be rei mbursed to all the successful persons who have
recei ved trai ni ng from approved VTPs.
Ministry of Micro, Small and Medium
Enterprises
5.35 Over the last several decades, the Mi ni stry of
Mi cro, Small and Medi um Enterpri ses (MSME) and
i ts fi eld i nsti tuti ons have been i mparti ng trai ni ng to
the new entrants to the workforce aimed at developing
ski lls, entrepreneurshi p and manageri al capabi li ti es.
Some of these programmes are di scussed below.
5.36 Entrepreneurship Development Programmes
(EDP) are bei ng organi sed by MSME- DI s as a
regular training activity to educate the youth on various
aspects that need to be taken i nto consi derati on whi le
setti ng up small scale enterpri ses. The durati on of
these trai ni ng programmes vari es from 2-4 weeks are
necessary wi th trai ni ng fee at Rs 100/ -. Trai nees from
weaker secti ons are gi ven a sti pend of Rs 500/ - per
trai nee per month. No fee i s charged from SC and
ST candi dates.
5.37 Entrepreneurshi p Ski ll Development
Programmes (ESDP) are targeted at trai ni ng unski lled
and semi - ski l l ed workers empl oyed i n smal l - scal e
i ndustri al uni ts i n new ski lls and/ or up-gradi ng thei r
techni cal ski ll and knowledge. However, some fresh
educat ed unempl oyed yout h al so part i ci pat e f or
learni ng the trai ts/ ski lls of vari ous trades i n order to
fi nd employment opportuni ti es or for starti ng thei r
own ventures. Efforts are made to organise tailor made
programmes for the ski ll development of the soci ally
di sadvantaged groups, parti cularly i n less developed
areas. The target group for these programmes are
SC, ST, OBC, women, mi nori ti es and other weaker
sect i ons. These are al so cal l ed ‘Out - reach
Programmes’ as they are conducted i n the rural/ less
developed areas. Trai ni ng programmes are of 6 weeks
durati on wi th trai ni ng fee at Rs 200/ -. Trai nees from
the weaker secti ons are gi ven a sti pend of Rs 500/ -
per trai nee per month. No fee i s charged from SC
and ST candidates. 46,418 persons were trained under
EDP/ ESDP i n 2007-08. Trai ni ng programmes are
bei ng conducted i n 60 di sci pli nes under EDP/ ESDP.
An amount of Rs 20 crores has been kept for ski ll
development programmes for 2008- 09 for trai ni ng
90,000 persons.
53
5.38 The Mi ni st ry of MSME has deci ded t o
implement the scheme of Entrepreneurship Development
Centres (EDCs) through Partner I nstitutes (PI s) in the
PPP mode t hrough t he Nat i onal I nst i t ut e f or
Entrepreneurshi p and Small Busi ness Development
(NI ESBUD). The scheme aims to develop such EDCs
in each block to cover about 15 lakhs youths every year
in addition to the 5 lakhs that the Ministry intends to
train through the existing programmes. The idea is to
identify institutes that can impart training by becoming
the Partner I nstitutes to provide Skill Development
Training in at least one identified product for each block.
5.39 The Mi ni st ry of MSME has proposed t o
promote skill development by setting up District Skill
Development Centres (DSDCs) in 6000 blocks of the
country. The DSDCs may be run by the Government
while 6000 block level SDCs may be run by PI s.
5.40 The various training programmes run by the
Ministry and the MSME-DI s are significant. However,
the linkage of these programmes with markets and the
private sector is yet to be fully achieved. Further, in many
of the targeted i ndustri es, i ndustri al organi sati on i s
characterised by clustering, which are administered by
the cluster development programmes whose linkages with
these schemes are often not cl ear. Exi sti ng cl uster
devel opment programmes focus more on hel pi ng
enterprises realise the importance of establishing linkages
with each other, on evolving common marketing facilities
and have relatively weak focus on skilling of the most
unskilled workforce.
5.41 Apart from the institutional training programmes
outlined above, there are several schemes that incorporate
elements of skill development. These are discussed below.
5.42 PrimeMinister’s Rojgar Yojana (PMRY) was
l aunched on 2nd October 1993 to assi st educated
unemployed youth to set up self-employment ventures.
I nitially, the scheme was implemented only in the urban
areas of the country. Since 1994-95, it is in operation in
both urban as well as rural areas. The Scheme also seeks
to associate reputed non-governmental organisations in
the implementation of PMRY Scheme especially in the
selection, training of entrepreneurs and preparation of
project profiles.
5.43 KVIC’s Rural Employment Generation Programme
(REGP) was launched with effect from 1st April, 1995
for generation of two million jobs in the rural areas of
the country. The scheme is applicable to all village
industries projects set up in rural areas. The eligible
agenci es under the scheme are (i ) i ndi vi duals (rural
arti sans/ entrepreneurs) i i ) i nsti tuti ons cooperati ve
societies, trusts & SHGS for projects up to Rs. 25.00
lakhs.
5.44 PMRY and REGP have been merged forming
Prime Minister’s Employment Generation Programme
(PMEGP) which is expected to increase the participation
by and coverage of rural beneficiaries by KVI C and state
government s i n a more f ocused manner t hrough
rationalized implementation, training, monitoring and
verification procedures to be piloted and coordinated by
KVIC.
Ministry of Housing and Urban Poverty
Alleviation
5.45 Swarna Jayanti Shahari Rozgar Yojana (SJSRY)
provides gainful employment to the urban unemployed/
underemployed by encouraging self-employment ventures
or provision of wage employment. The programme was
launched in 1997 with a fund support on 75:25 basis
between the Centre and the states. The programme is
applicable to all urban towns in I ndia and is implemented
on a whole town basis with special emphasis on urban
poor cl usters. The scheme consi sts of two major
components, vi z. (i ) The Urban Sel f Empl oyment
Programme (USEP), (ii) The Urban Wage Employment
Programme (UWEP). Salient features of the Urban Self
Employment Programme are:
• Assistance to individual urban poor beneficiaries
for setting up gainful self-employment ventures
• Assistance to groups of urban poor women for
setting up gainful self-employment ventures.
Thi s sub- scheme has been t i t l ed as “ The
Scheme for Devel opment of Women and
Children in the Urban Areas (DWCUA)”
• Training of beneficiaries, potential beneficiaries
and other persons associated with the urban
employment programme for upgradation and
acquisition of vocational and entrepreneurial
S yste m o f S k ill D e ve lo p m e n t in I n d ia
54
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
ski l l s. Trai ni ng i s i mpart ed i n t he I TI s,
pol yt echni cs, Jan Shi kshan Sanst hans,
engineering colleges or other training institutes.
• There is no minimum educational qualification
for beneficiaries under this program. However,
this scheme is not applicable to the persons
educated beyond the 9th standard. The training
and infrastructure support is as stated below:
- Training cost per person Rs. 2,000/-
- Training period 2-6 months
subject to a
mi ni mum
300 hours
- Tool kit worth Rs. 600/-
The annual targets under self employment under USEP/
DWCUA and skill development training under training
component have been fixed as 1,20,000 persons and
1,50,000 persons respectively in recent years.
Ministry of Rural Development
5.46 The Swarnajayanti Gram Swarozgar Yojana
(SGSRY) ai ms t o bri ng t he assi st ed poor fami l i es
(Swarozgaris) above the poverty line by providing them
income-generating assets through a mix of bank credit
and government subsi dy. The programme ai ms at
establishing a large number of micro enterprises in rural
areas based on the ability of the poor and potential of
each area. The SGSY is financed on 75:25 cost sharing
basis between the Centre and the states.
5.47 Training and capacity building of Swarozgaris
is an important component of SGSY, under which 10
per cent of the financial allocation is earmarked for training
and skill development. During 2007-2008 on an average
8.59 per cent of SGSY funds have been utilized for
training of Swarozgaris. At the national level, 15 per cent
of the funds under the programme are set apart for special
projects having far reaching significance and which can
act as indicators of possible alternative strategies.
5.48 As special projects, an innovative intervention
for demand-based skill development training projects for
increasing employability of rural BPL youth leading to
their placement or self employment has been taken up at
the national level. The emphasis of these projects is on
identifying demand driven skill sets in consultation with
the industry/potential employers in and around the project
areas and imparting training to rural BPL youth leading
to their placement on completion of training courses. The
processes involved in the model are partner / client
identification followed by market scan and curriculum
development, mobilisation, selection and training of rural
poor and their placement and tracking.
5.49 Realizing the great potential in this strategy, 12
Placement Linked Skill Development Projects have been
sanctioned with total project cost of Rs. 147.70 crores
and beneficiary coverage of 2.79 lakhs rural youth. The
average skill development training cost to be borne by
the Government in these projects is about Rs. 5,000/-
per head. Out of about 36,610 youth trained so far in
these projects, more than 27,465 have found employment
through successful placement at salaries ranging from
Rs. 3000 to 4000 per month bringing them above poverty
line. By March 2012, a total of about 2.5 million rural
poor are planned to be covered by the Ministry of Rural
devel opment t hrough si mi l ar ski l l upgradat i on
programme/projects with guaranteed placement.
5.50 The Ministry has successfully initiated a Skill
Development Programme for uneducated/low educated
unempl oyed BPL rural youth through partnershi p
programme with industry associations. A pilot project
has been initiated for garment industry in association with
I L&FS. To implement this programme, an SPV has
been formed cal led APTEX, whi ch i s managed by
i ndust ry represent at i ves and prof essi onal s. The
government. plays only a supportive role. After the pilot
phase, the programme would be expanded to cover at
least 5 lakhs BPL youths with 100 per cent placement
guarantee. Similar initiatives are being worked out for
other sectors like textiles, leather, footwear, retail, etc.
The Mi ni st ry al so part ners wi t h banks f or t he
RUDESETI model as discussed in the next para.
5.51 The Department of Rural Development had
proposed setti ng up Rural Devel opment and Sel f-
Employed Training (RUDSETI ) type institutes in all
the districts in the country to provide skill training to
rural poor. The first RUDSETI was established at Ujire,
Karnat aka, i n 1982 j oi nt l y by Sri Dharmast hal a
Manjunatheshwara Educational Trust, Syndicate Bank
55
and Canara Bank. I t chalked out an innovative approach
to help the rural youth stand on thei r own feet by
identifying opportunity avenues, train participants in
developing the desired skills and assist them in their
entrepreneurial activit y. RUDSETI has developed a
highly successful training module benefiting over 150,000
trai nees. Over 66 per cent of the trai nees have all
successfully established entrepreneurial ventures. I n the
pre-training phase of the programme, candidates are
selected on a scientific assessment of their abilities. The
selected candidates are then given inputs on motivation,
conviction, entrepreneurial competence and technical skill
and know-how in the selected fields. Later, the training
familiarizes them with the steps needed to set up their
own business. The final phase covers several aspects of
management. Apart from their educative and qualitative
programme, the organisation is in constant touch with
its students and is willing to support them for 2-3 years
even after their training. RUDSETI also provides a
helping hand to the candidates to come through their
initial struggles in their ventures. The trainees maintain
a good rapport with the RUDSETI even after their
training and constantly seek guidance. Keeping in view
the fact that most of the unemployed youth are from
poor/middle class rural families, entire training is provided
free of cost including free boarding and lodging.
5.52 Some of the typical EDPs for first generation
entrepreneurs are:
• Agricultural EDPs - Agricultural and allied
act i vi t y, dai ry management , bee- keepi ng,
horticulture, mushroom cultivation etc.
• Product EDPs - Dress designing for men and
women, rexin based utility articles, agarbatti
manufacturing, woollen knitting, bag making,
fabricating cane furniture, bakery products etc.
• Process EDPs - Repairs of two-wheelers, pump
sets, radio, TV etc., motor rewinding, multi-
purpose mechani c, beaut i ci an course,
phot ography and vi deography t echni ques,
screen printing and photo lamination, watch and
mobi l e repai r, repai r of domesti c el ectrical
appliances, computer and desk top publishing
(DTP) etc.
5.53 The above are only a synoptic view of the existing
schemes for skill development and training that have been
initiated by Government of I ndia. As mentioned earlier,
a number of other mi ni stri es/ departments are al so
associated with skill development programmes which are
catering to the requirements of specific sectors and target
groups. For instance, the Development Commissioner
(Handlooms) under Ministry of Textiles provides training
to the handloom weavers. I t has a number of Weavers
Service Centres in various parts of the country which
provide services to the handloom weavers. Similarly,
Development Commissioner (Handicrafts) is conducting/
supporting various promotional programmes for the
handicrafts sector which include skill development /
upgradation of artisans. Nehru Yuvak Kendra Sangathan
(NYKS) under Ministry of Youth Affairs and Sports has
500 district level offices which, among others, conduct
programme to improve the vocational skills of rural youth.
5.54 The Mi ni st ry of Women and Chi l d
Development is implementing a number of programmes
aimed at training women in marketable trades and enable
them to access remunerative employment opportunities
or help them in setting up their own businesses. The
Department of Science and Technology had initiated
Vocat i onal Trai ni ng for Empl oyment Generat i on
(VoTEG) in January 2000 with support from UNDP to
target the informal sector for training. The project evolved
into SKI LLS Project which takes a lead in adapting and
implementing the ‘franchise model’ to skills required by
the target segment of resource poor communities and
less educated persons. The Ministry of Agriculture is
training in the fields of agriculture/extension services,
horticulture, animal husbandry, dairying and fisheries.
The Nat i onal Rural Heal t h Mi ssi on and ot her
programmes of Ministry of Health and Family Welfare
have skill formation components built in to the overall
schemes. The Ministry of Tourism is associated with
training activities in areas of hotel management and
catering. The Ministry of Food Processing I ndustries
organi zes t rai ni ng programmes rel at i ng t o f ood
preservation and food packaging to impart vocational
abilities to the youth. I nstitutions like APEDA, NI D,
Coffee Board under Ministry of Commerce and I ndustry
have skill development components embedded in to their
programmes. Mi ni st ry of Soci al Just i ce and
Empowerment and Ministry of Minority Affairs have
training programmes to train people from their target
S yste m o f S k ill D e ve lo p m e n t in I n d ia
56
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
groups. I n addition to these, a large number of training
programmes are support ed by NABARD f or t he
agricultural sector and institutions such as NDDB which
work with informal sector workers.
State Government Initiatives
5.55 As ment i oned earl i er on i n t he chapt er, a
significant part of the implementation of national level
schemes takes place at the state level. I n addition, several
state governments have also initiated specific programmes
for skill development in the informal sector. I n Andhra
Pradesh, for exampl e, an Empl oyment Generati on
Mission has been set up in the last few years by the State
Government that works in a public-private partnership
mode with the Collectors and Project Directors of DRDAs
i n the di stri cts. Compani es such as G- 4 Securi tas
collaborate with the Mission in various ways ranging
from mentoring, providing human and financial resources.
A specific initiative that trained the rural youth in market
linked opportunities for entry level jobs in the service
sector resulted in placement with companies such as Mc
Donald’s, Café Coffee Day, Food World and so on.
Training programmes for self-employment that focus on
the informal sector are undertaken by schemes run by
the governments of several states such as Rajasthan,
Tripura and Maharashtra. States such as Orissa and
Jammu and Kashmir have specific training programmes
in the handicraft and artisanal sectors.
Conclusion
5.56 Our review demonstrates that thegovernmental
systemfor skill development and training, whilevast, is
dispersed and characterised by overlapsand multiplicity of
schemes. Further, thesystemthat isin existencefor theinformal
sector, whilerecognising someobviousneedsof thesector such
ascertification of trainees, accreditation of trainers, broad
basing and making flexibletheactual training imparted and
linking training to jobs, is again not conceptualised in a
comprehensivemanner. The Second National Commission
on Labour focuses its critique of existing systems on these
characteristics, which this Commission also seeks to
emphasise. Specifically, it is stressed that theformal and
informal systemsof skill development need to beintegrated
with training being competency based, flexible, allowing easy
entry and exit to traineesat different pointsin their livesand
being subject toformal systemsof accreditation and certification.
5.57 At the level of implementation, the district level
st udi es conduct ed by t he Commi ssi on i n Sehore,
Allahabad, Shillong and I mphal show that, in spite of
all the above menti oned schemes, both formal and
i nformal, bei ng i n operati on to di fferent degrees i n
different places, the present facilities to impart skill
development to workers are grossl y i nadequate. For
example, in Allahabad, it was seen that at present only
12 - 15 thousand workers are trained every year with the
contribution of the government system being about 55
per cent and private sector about 30 per cent while NGOs
provide training to about 15 per cent workers. I n Sehore,
of an estimated 2.18 lakhs workers, who require training,
the existing capacity can cater only to a few thousands.
Part B: Part B: Part B: Part B: Part B: Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves
5.58 Review of governmental initiatives towards skill
building, both in the formal and informal sector in the
previous section, revealed the contours of the largest
system of skill development in I ndia. As was pointed out
in chapter 2 a significant proportion of the workforce
also gets trained in the private sector. The present section
reviews some of the initiatives of the private and NGO
sectors. The focus is on drawing out the salient features
of such initiatives.
Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng
5.59 Broadl y, the private sector initiatives can be
categori sed i nto four types. Fi rst i s where pri vate
entrepreneurs or corporates establish training centres/
institutes on a for-profit basis. Second, private corporations
impart training to people who are absorbed as skilled
workforce in their own production units. Third is where
they enter into partnerships with public agencies and
become the vehicles for training delivery and sometimes
finance. Fourth, corporate houses set up public trusts or
foundations with a development agenda to build the
capacities of local communities to be self reliant systems
that utilize human and physical capital in a sustainable
manner as an integral part of their ‘corporate social
responsi bi l i t y’ (CSR) mandat e. Here, we bri ef l y
summarise some of the major initiatives taken by the
private sector.
5.60 Examples of the second kind of initiative, where
ski l l ed manpower trai ned by a pri vate company i s
57
absorbed within the company itself, are by companies
such as Group 4 Securitas, Reliance and Kingfisher.
Kingfisher runs a training academy (Kingfisher Training
Academy) that caters to the hospitality industry, including
aviation, tourism and hotels. I t runs training modules of
roughly a year’s duration that train young people as
airhostesses, flight stewards, and workers in the hospitality
sector. Reliance I ndustries has started an initiative called
Reli ance Global S Reli ance Global S Reli ance Global S Reli ance Global S Reli ance Global Ser er er er ervi ces vi ces vi ces vi ces vi ces to provide job oriented call
center training. Group 4 Securitas conducts a two-week
training programme for security guards before they are
inducted into the workforce.
5.61 Examples of the third kind of initiative, involving
publi c-pri vate partnershi ps, are of the Constructi on
I ndustry Development Council (CI DC), which has been
set up jointly by the Planning Commission, Government
of I ndia and the I ndian construction industry. CI DC, a
group of industry and government representatives, has
undertaken a programme to assess, build and certify skills
in the construction trades so that the overall industry can
have access to skilled labour of certified quality. TATA
Motors has developed a training model in partnership
with the CI DC. This partnership has effectively become
a source of training for an entire automotive supply chain
linked to their branded vehicles. Though it was originally
developed as a closed programme that simply trained
students to build quality vehicles, TATA soon realized
the need to also train those who supplied the parts, sold
and repaired their cars. The unique feature of these
programmes is that they are private sector led, but not
designed exclusively for the benefit of the designers or
the funding organizations of the programme.
5.62 I n the previ ous chapter, we referred to an
initiative by the Andhra Pradesh Government involving
a public-private partnership for training the rural youth
for service sector jobs. This initiative, coordinated by the
State Government, has the private sector undertaking
training of youth for employment in the private service
sector in companies such as McDonalds, Café Coffee
Day, Food World, Futures Group, Pizza Hut, Microsoft,
Dell, Wipro and so on.
5.63 There are also several initiatives where private
foundations undertake training programmes as part of
corporate soci al responsi bi li t y of corporati ons. The
Ambuja Cement Foundation (ACF) is the development
initiative of the Gujarat Ambuja Cement Company and
works at 11 locations covering nearly 700 villages of eight
states. While some youth groups have been imparted
training on bamboo crafts and furniture making, others
were trained for repairs of TVs & mobile phones, driving,
masonry, electri ci an, motor mechani c, weldi ng and
fabrication, carpentry and plumbing. Some others were
provided training on small-scale enterprises, so as to
enable them to establish their own small business. The
efforts of ACF are to go beyond just imparting training
in skills that the work market requires; training them in
entrepreneurship is also provided. The youth are also
supported to learn the procedures of approaching banks
for loans and setting up their own enterprises.
5.64 The training initiative by the Confederation of
I ndian I ndustry (CI I ) is another example of the above.
With the focus on shifting training from employment to
employability perspective, the CI I is presently piloting
the ‘Skills Development I nitiative’ as a solution to deliver
a structured and scalable framework to impart skills to
the unemployed / underemployed / uncertified workers,
so that they develop as a quality human resource to meet
the dynamic needs of the growing economy. This has
been pi l oted i ni ti al l y i n 6- 7 urban as wel l as rural
locations. The trades in which skills are imparted are
chosen in response to the local demand requirements and
the growth potential. There is no condition in regard to
the social, economic or educational background of the
trainees, who are selected on the basis of their aptitude
and potential. Under this initiative, the skill-demand
assessment is carried out, then the programme module
formulated, along with identification of training centres
and trainers, and finally, delivery of the capsule modules
targeted to help the candidates gain employable skills.
The skill trades are classified into blue skills (agriculture,
heal t h care, securi t y servi ces) / rust col l ar ski l l s
(construction, minor engineering, transportation) / and
grey col l ar ski l l s (I CT) etc. The exi sti ng trai ni ng
infrastructure, such as that available at I TI s, engineering
colleges and vocational training institutes after regular
hours, is sought to be utilized optimally. Services of
faculty members of these institutions are utilized on an
honorarium basis. The duration of the training course is
3- 6 months. The contents of the trai ni ng can be
S yste m o f S k ill D e ve lo p m e n t in I n d ia
58
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
customized to meet the requirements of an employer, who
gives a firm commitment of employment.
5.65 A universal certification process is an important
component of this initiative. There is an independent
verification and a joint certification of the proficiency
acquired by the trainees for which the CI I has partnered
with City & Guilds. The certificate given by City &
Guilds is expected to have wide acceptability nationally
and i nternati onal l y and the CI I i s negoti ati ng an
arrangement with banks for underwriting a smart card
to be given to the successful candidates to help them get
financial linkages.
5.66 Another exampl e of a CSR i ni ti ati ve by a
corporate foundation is that of the Byrraju Foundation,
set up by the Satyam group of companies, which seeks to
providing training services in the areas of healthcare,
envi ronment , sani t at i on, and adul t l i t eracy. The
Foundation currently works to transform 156 villages in
5 districts of Andhra Pradesh and impacts 800,000 people.
5.67 Dr. Reddy’s Foundation, which is the Corporate
Social Responsibility wing of Dr. Reddy’s Laboratories,
a leading pharmaceutical company of I ndia, has started a
programme called Livelihood Advancement Business
School (LABS) which is a vocational and life skills
training model that provides job-based skill development
training to the poor youth in the age of 17-25 yrs over a
period of 3-4 months. I t is custom-designed for school
dropouts, unemployed secondary school graduates, street
yout h, ret renched workers, mi grant yout h and
resettlement communi ty members from the poorest
sect i ons of t he communi t y. Thi s demand- dri ven
programme has trained over 36,000 youth (between the
ages of 17 and 25) from the economically weak and placed
them in the salaried formal employment sector. Over
100 major national and international corporations and
busi ness organi zat i ons and over 4,000 l ocal smal l
businesses and medium enterprises have provided entry
level positions to the LABS alumni till date.
5.68 Private sector initiatives in skill building, as
demonstrated above, tend to be more linked to industry
demand and hence avoid the wastages associated with
supply-led initiatives. However, as has been mentioned
in chapter 2, these are likely to be forthcoming only in
response to existing demand and where skilling is likely
to have a direct link with profitability. For a large segment
of workers in the informal sector, these considerations
are not enough and their skilling needs go far beyond
those that are likely to be addressed directly by the private
sector. Some of these concerns are taken up through NGO
interventions which are described below.
NGO Initiatives in Skill Building
5.69 NGO interventions range from offering NCVT
approved formal I TI courses to a wide range of non-
formal courses. Typi cal l y, NGOs devi se thei r own
curricula, provide their own training and have their own
certification procedures. Very often, they have contacts
wi th empl oyers i n the nei ghbourhood areas whi ch
provi de placements for the trai nees. I t i s often also
reported that placement in jobs for those trained are high
and that trained workers earn higher wages. A review of
the working of the activities of the major NGOs initiatives
reveals that there are two types of approaches being
followed: (a) training only on basic or upgraded skills
and then leave the trainees to seek wage employment or
start their own enterprise, and (b) a ‘holistic’ package of
skill development, basic entrepreneurship training and
assistance in availing credit facilities etc. Some NGOs
even `handhold’ the trainees for a certain period. Some
of the major initiatives are summarised below.
5.70 Goodwill I nternational Association: Goodwi ll
I nternati onal Associ ati on, based i n Bangalore, was
establ i shed i n 1971 and i mparts ‘earni ng ski l l s’ to
unempl oyed youth and school dropouts i n vari ous
disciplines (at least 10
th
pass). Formal courses offered
for training are of the I TI s affiliated to the NCVT, which
comprise the fitter trade for boys and cutting and tailoring
for girls. The non-formal vocational courses include
fitting, welding, turning (boys), electrical and plumbing.
The non-engineering courses include literacy, health
educati on, craft (gi rls), medi cal attendant, machi ne
mechanism, electrical etc. Around 60 per cent of the
trainees under non-formal courses have been successful
in obtaining jobs in various industries either on their own
or through Goodwill’s association. With regard to formal
training for boys, the success rate in placement is 100 per
cent. Goodwill has contacts with a number of engineering
and garment industries and hospitals which help trainees
to secure a job after completion of training. Attempts are
59
made by the Association to find placements for trainees
in the industry as apprentices. Multi-skilling of the
trainees provides them with ample opportunities to learn
and move upward in employment hierarchy.
5.71 The trai ni ng manual for formal courses i s
provided by the Directorate General of Employment
&Training where as for non-formal courses the manual
is prepared by Goodwill which has its own trainers and
does not depend upon outsiders. For formal courses,
certificate is provided by the government and for non-
formal courses it is provided by the Association.
5.72 GramVikas: Gram Vikas is a secular, non-profit
voluntary organization working in Orissa with the needy
and weaker sections of the society to facilitate their
development. I t engages in activities aimed at improving
the living conditions and the economic standards of the
poorest of the poor. Gram Vikas provides training to
landless unskilled labourers in masonry, stone dressing,
wire binding, painting and plumbing. The target group
is the landless village youth working as unskilled labour.
Trained barefoot engineers and skilled masons contribute
towards projects implemented by Gram Vikas itself on
shelter related constructions works and also manage to
get gainful employment in and around the villages once
the project gets over. Skill training helps the people to
bargain and secure better wages for themselves. I t has
been observed that most of the skilled masons managed
to double their daily wage earning capacity over a period
of two years.
5.73 Gram Vikas has its own trainers to provide
training to the target group. Gram Vikas provides the
technical back up support and the necessary credibility
to trai nees to establi sh thei r own mi cro enterpri se.
Follow-up surveys are conducted by Gram Vikas after at
l east t wo years of t he compl et i on of t he t rai ni ng
programme. Gram Vikas awards Certificate to each
trainee on the completion of training.
5.74 An interesting NGO intervention that targets
the informal sector is that of Movement for Alternatives
and Youth Awareness(MAYA Organic. .. .. Maya Organic is a
not-for-profit company based in Bangalore working with
informal workers in about 52 slums. I t provides access
to the working poor to skills up-gradation and learning.
I t recognizes that the unorganised sector, the organised
industry and the markets - each has specific needs as
well as opportunities to offer and share with each other
for growth and development. The model takes advantage
of the large number of i ndi vi duals operati ng i n the
informal economy by bringing them together as collective
enterprises of 30-50 members / owners each to access
t he work opport uni t i es avai l abl e and by maki ng
continuous learning, social security and decent work
conditions as inherent part of the organizational structure.
I t distinguishes itself from the existing member-based
organizations in that all these collectives are profit centres
of a particular sub-sector enterprise, which in turn ensures
a certain visibility and organizational structure, thus far
missing in the unorganised sector.
5.75 Maya Organic has been working in 4 sub-sectors
and has regi st ered four ent erpri ses: l acquer ware,
const ruct i on (pai nt i ng, masonry, and carpent ry),
hospitality and services (domestic work, food industry
and public place maintenance as well as gardening and
waste management) and garments (home based garment
workers and embroi dery workers). Maya Organi c
encourages different kinds of vital networking between
the collectives and markets. One central activity is the
interaction with clients in the areas of information about
changing market demands and quality feedback related
to the products and services offered by the collectives.
Equally important is the continuous interaction with
resource pool (persons/ institutions/ material) which
support the collectives in the areas of training, marketing,
product and brand building and social protection; this
ensures continuous product and service upgradation for
better marketabi li t y. Thi s form of networki ng and
making the resource pool accessible to the collectives
not only facilitates the process of continuous reflection
on market t rends and changes but al so enhances
empowerment.
5.76 As an active marketing agency, Maya Organic
represents the various collectives under a brand in the
market, ORGANI C, that represent not just products/
services but rather a development brand. I t implies that
every product/ service bearing the ORGANI C label has
a developmental objecti ve and connotes good work
practices, high quality and professionally run collectives.
I t is responsible for developing and promoting the brand
identity across different markets and clientele through
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
building networks with clients. Maya Organic also has
a process of moni t ori ng t he col l ect i ves t o ensure
compliance with what the brand stands for.
5.77 I n addition, LabourNet, an institutional network
of markets and informal sector workers is a facilitating
structure that routes jobs to workers, encourages skill
development, influences policy and facilitates access to
social security schemes for the construction workforce
etc. I t has evolved from the experiences of Maya Organic.
5.78 Self Employed Women’sAssociation (SEWA) is an
organisation of poor and self-employed women workers
from the unorganised sector of the economy. SEWA’s
mai n goal i s t o organi ze women workers for ful l
employment and self reliance and believes in capacity
building as a strategy for making the poor women self-
dependent. SEWA has the experience of skill formation
in a variety of livelihood creation and supportive activities
by i mparti ng trai ni ng on techni cal, manageri al and
behavioural skills. For more than 32 years now, SEWA
has been working for poor, self-employed women in the
unorganised sector of rural and urban areas. Today more
than 9.6 lakhs poor women from five states of I ndia are
organised in the forms of Self-Help Groups (SHGs),
co-operatives, associations, federations and even corporate
entities. I t has formed producer federations in each of
the districts it works in.
5.79 The vari ous sectors where SEWA works i s
constructi on (masonry, bri ck work, pl umbi ng etc),
production of traditional craft work, management of water
supply by women, repairing & maintenance of hand pumps
and pipelines, provision of health related services, basic
skills in electrification, food processing and assembling
of solar energy equipments.
5.80 SEWA’s approach to organizing women for a
particular trade has been demand driven and need-based.
Even before designing the training modules, surveys are
conduct ed t o st udy t he member’s needs and ski l l
assessment exercises are carried out to identify the areas
where training is required. As a policy, SEWA uses
training modules and curriculum for training through
the SEWA Academy - the focal poi nt for workers’
education and capacity-building. Similar inputs are also
available from relevant sister institutions of SEWA.
Moreover, SEWA has district level teams of trainers and
coordinators who interact regularly and keep upgrading
the training modules.
5.81 So far as technical skill training is concerned
SEWA makes arrangements wi th external resource
organi zati ons and i ndi vi dual s, e.g. NI FT, Gujarat
Agriculture University, CIDC etc. SEWA has established
institutional linkages for various aspects of managing
women’s micro enterprises. Some of the institutions
include Mahila SEWA Sahakari Bank, I CI CI Prudential,
Gujarat Alkalies and Chemicals Ltd., Central Marine
and Salt Research Laboratory.
5.82 The above revi ew shows t hat t he non-
governmental initiatives, whether by the private sector
or by NGOs, address some of the deficiencies that exist
in existing government-led systems. They provide training
that is demand-led with signals being provided by the
market. However, as was noted earlier, going purely
through market signals will not address a lot of problems
of the informal sector. NGOs adopt a more integrated
approach, wi th emphasi s across di fferent ki nds of
organisations, but their interventions are too small and
dispersed to make a significant impact in terms of numbers
t rai ned. Further, they suffer from the probl ems of
i nconsi st ent curri cul um, l ack of cert i fi cat i on and
standardisation that were noted earlier.
5.83 The focus of t he Commi ssi on’s work and
recommendations in this report is to critically evaluate
the extent to which the skilled workforce needs of the
economy can be met through exi sti ng schemes and
approaches. I t must be mentioned here that in recent
years, there have been several agencies and institutions
that have undertaken similar reviews, underlined several
i nadequaci es i n exi sti ng systems and recommended
reforming the system. Our review therefore evaluates the
exi sti ng system keepi ng i n mi nd other evaluati ons,
critiques and recommendations. The salient features of
these evaluations are described below.
Skill & Training System in India: Critical
Evaluation & Salient Proposals
5.84 Recently, the role and performance of the existing
training system has been extensively reviewed and a
number of proposals have been made to strengthen and
expand i t . These proposal s readi l y recogni ze t he
61
i mportance of ski ll development of workers i n the
unorganised sector but focus on the skill requirements
for the organised sector. I t is recognized that the present
training system is supply-oriented and is not linked to
emerging demand (by the organised sector) for skilled
manpower. The proposal s, therefore, make vari ous
suggestions for strengthening and expanding the present
vocational educational and training system in the country.
5.85 The main proposals which we have examined
i n t hi s report have been made by t he Pl anni ng
Commission’s Task Force on Employment Opportunities
and Task Force on Skill Development (subsequently also
i n the El eventh Pl an) and the MOLE Draft Ski l l
Development Policy. In addition, the National Knowledge
Commission, the World Bank and 2008-09 union budget
also spells out some proposals. The targets proposed in
the various documents perused by the Commission are
quite general and range from about 15 million to 50
million annually. But in some cases only public sector
training capacity or only organised sector worker coverage
have been specified. There is general lack of clarity on
the extent of coverage of unorganised sector workers.
These report s have ment i oned vari ous f i nanci ng
mechanisms and have different emphases on the respective
roles of the public and private sectors. Besides, these
reports have suggested different apex level organizational
structures to address the VET requirements. From the
Commission’s point of view, a major lacuna of these
reports, as pointed out above, is that they focus mainly
on the training needs of the organised sector (whether
formal or informal). They also do not assess the existing
training systems for the unorganised sector workers. As
far as the Commission is concerned, we find that our
broad approach as wel l as some of our key
recommendati ons are si mi lar to that of the Second
National Labour Commission. We have gone beyond the
recommendati ons of the Second Nati onal Labour
Commission in several important respects.
5.86 Report s of most of t he above ment i oned
commissions and committees characterize I ndia’s system
of skill development and training as being government
led on the one hand and supply driven and not linked to
emerging demand (by the organised sector) for skilled
manpower on the other. Most of them argue for reducing
the government ’s role and gradually allowing the private
sector to take over the training delivery or reorienting
systems of training in the PPP mode. The government ’s
role is envisaged as a facilitator and for creating a larger
framework for certification and accreditation. Within this
broad approach, proposals vary among greater stress on
general education in comparison to vocational education
(World Bank), government ’s complete withdrawal from
t rai ni ng del i very (Task Force on Empl oyment
Opportunities) and training to be necessarily paid for in
the form of user fees by trainees.
5.87 Most of t he proposal s focus on the skill
requirements of theorganised sector. I ssues of trai ners’
accredi tati on, certi fi cati on of trai ni ng, autonomous
structure for skill development etc. that affect the quality
of training for the organised sector are addressed by
vari ous report s. I nf ormal sect or charact eri st i cs,
highlighted in Chapter 2 of this report, are considered
only briefly by the Second National Commission for
Labour and the MOLE’s report. The fact that the informal
sector’s workers and entrepreneurs require formal training
in order to improve productivity in both the formal and
large informal sector is hardly recognised. That skill
development for the informal sector has to be structurally
different, on which this Commission lays great emphasis,
does not receive serious attention by most critiques and
proposals.
5.88 The Task Force on Employment Opportunities
under the chairmanship of Shri Montek Singh Ahluwalia
submitted that the Central Government should completely
withdraw from delivery of vocational training services.
I t felt that the Central Government ’s role should be to
monitor the institutions that set up standards of training,
and evaluating and assigning rating to the private training
establi shments. I t called for the I TI system to be
restructured and additional resources provided to improve
its output. Selected I TI s chosen for joint management
with industry should be converted into autonomous bodies
receiving government funds. Moreover, it felt that the
existing policy of restrictions on charging fees should be
removed. I t also called for a centrally sponsored scheme
or an aid institution like the UGC to be set up for the
I TI ’s. I t was i n favour of i mposi ng a small levy on
companies to raise a skill development fund to finance
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
the I TI s with industry associations also having a say in
al l ocati ons. I t wanted graduates of I TI s and other
vocational training institutions to be eligible for entry
into polytechnics and +2 level medical and engineering
courses. The Task Force recommended that all enterprises,
irrespective of size and status, should be brought under
the purview of Apprentices Act. I t opined that the private
sector involvement in training has been discouraged
because of highly subsidized training services provided
by the public sector which should change.
5.89 The Second National Commission on Labour
recommended a new modular approach to vocational
training, which would aid multi-skilling, impart skills
attuned to the needs of the l abour market, and i n
consonance with the latest technology. I t called for the
setting up of an independent regulatory authority to set
t he st andards f or ski l l s requi red f or a part i cul ar
compet ency, programme i mpl ement at i on and
accredi t at i on of i nst i t ut i ons i mpart i ng t rai ni ng
programmes. I t also favoured establishment of Block
level vocational educational institutions in a phased
manner in each block and emphasized that trade unions
at the national, regional, industry and plant level should
all have a say i n the runni ng of workers’ educati on
programmes. The Labour Commission recommended
that for better matching of demand and supply a labour
market intelligence system needs to be put in place for
forecasting of marketable skills in both the organised
and unorganised sectors. In order to provide for retraining
of workers rendered surpl us/ obsol et e by l ay- offs,
retrenchment and voluntary retirement schemes/early
separati on schemes, and trai ni ng of l abour i n the
unorganised sector, the Second National Commission on
Labour recommended the establ i shment of a Ski l l
Development Fund (SDF).
5.90 The World Bank in its recent report on VET in
I ndia has taken a different approach. I t has argued that,
going by the international experience, I ndia would do
well to not expand its vocational education system but
focus on strengthening its general education system. As
far as vocational training in public sector is concerned, ,, ,,
major reforms at the policymaking and institutional levels
would be required. The report emphasized that involving
pri vate sector i n management woul d be cri ti cal i f
institutions are to be responsive to labour market needs.
The World Bank was of the view that the diverse training
needs of the informal sector operators cannot be met by
simply reorienting public training institutions. I nstead of
delivering training themselves, governments could focus
on creati ng an envi ronment to support non- publi c
provi ders. Whi l e emphasi zi ng t he i mport ance of
informal apprenticeships for training in the unorganised
sector, it suggests that the quality of such apprenticeship
should be improved through a strategy revolving around
traditional form of training, by upgrading the technical
and management skills of the masters as well as their
skills in pedagogy. Further, traditional apprenticeships
should be linked with specialized training providers or
master craftsmen, wi th the governments acti ng as
facilitators. To assist the growth of private training
provision, the report emphasized that the government
shoul d remove const rai nt s on set t i ng- up t rai ni ng
institutions.
5.91 The National Knowledge Commission, in its
recommendations on the vocational education and training
system, favoured placing vocational education entirely
under the Ministry of Human Resource Development
(MHRD). I t called for increasing the flexibility of VET
within the mainstream education system and establishing
links between the vocational education stream and school
educati on as well as hi gher educati on, and maki ng
vocational training available in various literacy and adult
educat i on schemes. The Nat i onal Knowl edge
Commission recommended that the government should
aim to spend at least 10 – 15 per cent of its total public
expenditure on education, on vocational education. It called
for expanding VET capacity through innovative models
such as public private partnerships, decentralized delivery,
distance learning and computerized vocational training.
I t also called for enhancing the training options available
for the unorganised and informal sectors. It also suggested
that the skills required by the unorganised sector should
be formally introduced in the curricula and practical
training courses. The government should act as a facilitator
and provi de fi nanci al support for such courses. The
existing Industrial Training Institutes (I TIs) and Industrial
Training Centres (I TCs) should be improved through
increasing their functional autonomy. An independent
regulatory agency for VET should be established.
63
5.92 The Task Force on Skill Development set up by
the Planning Commission has asked for a paradigm shift
in the national policy on skill development with the
pri vat e sect or pl ayi ng a l ead rol e i nst ead of t he
government.. The government ’s role would have to
change from being a vocational training provider to a
partner and faci li tator. Moreover, the Task Force’s
emphasis is on a shift from the supply-led to a demand-
driven approach. For vocational education, the Task Force
has suggested that the nodal agency would be the Ministry
of Human Resource Development but an i nterface
between Vocational Education and Vocational Training
would be provided at different levels. Recognizing the
importance of skill development in agriculture and its
vast potenti al, i t has recommended that agri culture
training institutes can be set up all over the country, in
the PPP mode wherever possible, to empower persons
dependent on agriculture. I t called for a National Mission
on Skill Development to be set up. As part of the Mission,
the National Council of Vocational Training (NCVT)
should be reconstituted and become the soleregulatory
authority for Vocational Training. .. .. New institutions or
Skill Development Centres (SDCs) could be opened on
demand by the state governments in collaboration with
the industry on a PPP basis. The Task Force left the issue
of trai ni ng i n the unorgani sed sector, (where i t was
suggested that training centres be set up in clusters of
vi l l ages, l i nked wi t h rural busi ness hubs and t he
development programmes of the local bodies, PPPs and
industry) to be looked at by the Mission.
5.93 The Eleventh Five Year Plan has called for a
“Skills Development Mission”, ”, ”, ”, ”, with an outlay of Rs.
22,800 crores. The Mission will, among others, realign
and reposition existing public sector infrastructure I TI s,
polytechnics and VET in school to get into PPP mode
and to smoothen their transition into institutions managed
and run by the private enterprises or industry associations.
I t will encourage a move away from the system of funding
training institutes to supporting the candidates. As a result,
institutional funding could be limited to an upfront capital
grant while recurring funding requirements could be met
by appropriate disbursement to the institute at the end of
successful certification. Public Private Partnership Mode
wi l l be the major vehi cl e for absorpti on of publ i c
expenditure in skill development in the Eleventh Five
Year Plan. Apart from the financial contribution from
the government, the Plan calls for creating an enabling
environment for private investment in skill training.
5.94 The Draft National Policy on Skill Development,
prepared by the Ministry of Labour & Employment, has
targeted to expand significantly the capacity of the national
skills development system. The Policy envisages setting
up of State Skill Development Councils, State Skill
Development Boards and State Ski ll Development
Corporations on the lines of their national counterparts.
The Pol i cy pl aces t he Mi ni st r y of L abour and
Employment as the nodal Ministry for coordinating the
efforts of skill development. The Ministry will also guide
t he f ormul at i on of a programme of act i on f or
implementing the Policy.
5.95 As part of the institutional restructuring, the
Poli cy cal ls for the Nati onal Counci l of Vocati onal
Training (NCVT) to be strengthened and reengineered
with a broader mandate and expanded activities to play a
pivotal role in skill development. A State Council for
Vocational Training is to be remodelled in each State,
which has similar functions as NCVT at the national
level. The Policy envisages establishment of Sector Skills
Councils (SSCs), in coordination with NCVT, as an
institutional mechanism to facilitate greater and active
participation of the social partners. Sector specific Labour
Market I nformation Systems are to be established at
national and state levels, and area specific LMI Ss at local
levels.
5.96 The Policy aims to introduce ‘competency focus’
in the national skills development system. The Policy will
focus on equalization of skills development opportunities
for the socially disadvantaged communities with those
of the rest of the population. Special efforts will be
mounted to promote establishment of training facilities
i n def i ci ent regi ons. The scheme of Modul ar
Employment Skills would be expanded greatly to cater
to the large size of the target group of drop-outs and
out-of-school youth, including child labour. All efforts
wi l l be made to i mprove and strengthen i nformal
apprenticeship arrangements in the unorganised sector
and to upgrade and diversify their activities into modern
skill areas. A special funding support scheme will be set
up, which, among others, will help meet direct and
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
opportunity cost of skills training and lifelong learning
in the unorganised sector.
5.97 I t is clear from the above that almost all recent
assessments (with the exception of the World Bank
report) have favoured large expansion in I ndia’s skill
development capacity. They have also all favoured a
substantial increase in skill development capacity for
informal sector workers. Some of the reports envisaged
t hat t hi s coul d be done by set t i ng up 5000 Ski l l
Development Centres. There are considerable differences
between the recommendations in the management and
financing models envisaged, with some of the reports
visualising that the government will only play the role of
facilitator, financier and coordinator.But their major focus
is on the organized sector, which has a clear articulation
of skill requirements and well established market links.
District Level Studies of Skill Development
System
5.98 The NCEUS’s assessment of the needs of skill
expansion in the informal sector makes it clear that these
efforts will have to be sufficiently decentralized and
grounded on smaller institutions at the local level. We
have earlier shown that training institutional capacity is
extremel y l i mi ted i n preci sel y those regi ons where
demographic dividend is the highest. However, we have
very little precise information on issues such as non-
governmental formal and informal training capacity, its
quality, the felt-need for training among potential trainees,
employers, service demanders, and ground level views
on how to expand a training system which can cater to
this segment. I n order to fill this gap, the Commission
made an attempt to independently evaluate the existing
system of ski ll development at the di stri ct level by
commissioning four district level studies in Sehore district
of Madhya Pradesh, Allahabad district of Uttar Pradesh,
East Khasi Hills district of Meghalaya and I mphal West
Di stri ct of Mani pur. The ai m of these di stri ct level
assessments was to estimate the existing training capacity
for unorganised sector workers in the districts, including
those run by the government, private sector and NGOs.
These studi es also tri ed to evaluate the quali ty and
suitability of the training already available for informal
sector workers, estimate the training needs of the district,
suggest suitable ways for expanding training capacity in
the district in order to cover about half the workforce by
2025 and develop a blueprint for new institutions that
may need to be supported, including the role of the public
and private sectors, management and governance structures
etc. The studies also tried to indicate the nature of public
fi nances that may be requi red for di fferent purpose
including subsidies to private trainers or training facilities,
direct provisioning of training services, and subsidies to
trainees. The main conclusions emanating from these are
summarized in the following paras.
5.99 These st udi es have emphasi sed t he t ot al
inadequacy of training facilities for unorganised workers
at the district level. Moreover, the quality of training
also leaves much to be desired. The unorganised workers
are acqui ri ng t rai ni ng mai nl y t hrough i nf ormal
apprenticeships, with some contribution by government
sponsored programmes and, to a lesser extent, by private
courses which are designed principally for educated youth.
5.100 The studies have emphasized that the need for
up-grading skills is felt acutely in both the rural as well
as urban areas. Training strategies may, therefore, have
to be formulated separately for the rural and urban areas.
A training strategy for rural entrepreneurs / workers may
involve a careful selection of the subjects for which
training is to be imparted through non-conventional
institutions. The potential for various skills in the rural
areas may be identified and the entrepreneurs selected
accordingly for imparting training. Certification of skills
may be an integral part of the strategy so that the trained
youth may use the certificate for getting employment
elsewhere. A well though-out strategy for marketing
the produce of the unorganised sector entrepreneurs/
workers, especially rural entrepreneurs, must be a part of
the overall skill development strategy. I n urban areas
also, MES should be identified for imparting both short
and long term training in such identified skills along with
certification. Non-formal training programmes may also
be initiated where the boys/girls pursuing their education
may join after their study hours [usually in the evening]
to learn certain specific skill which may help them in
getting employment after completion of their studies.
5.101 The studies have called for setting up training
facilities at a decentralized level, at least at the block
level, to enable such workers to access them. Moreover,
65
they feel that the NGOs, PRI s and private sector should
be actively associated if the desired expansion in training
facilities is to be achieved. I n respect of quality of training,
it is felt that skills being imparted through the existing
informal system should be certified and linkages between
formal and informal institutions should be established to
the extent possible.
5.102 The various studies have stressed identification
of master trainers at village, block and district level,
incentivising their training and linking them with formal
training institutions. There is a felt need for a well
desi gned trai ni ng of trai ners programme at formal
institutions where these master craftsmen could be trained.
Provision could be made for a one time grant to master
trainers to upgrade their workshops.
5.103 The studies have also called for a nodal agency
at district level to be set up to coordinate, implement,
evaluate and follow up the skill development programmes.
I t has been suggested in the Allahabad Report that all
those functions that has been stated in the SDI scheme
of Ministry of Labour & Employment for the State
Committee to be executed at state level may be assigned
to the suggested District Skill Development Agency.. This
arrangement could substitute the role of the nodal I TI s
as proposed in the SDI scheme. The nodal agency at the
district level may manage, monitor and evaluate the
ongoing training programmes in the district. I t may also
act as a Labour Market I nformation Centre, prepare a
training map for the district and maintain a directory of
potential trainers and trainees. I t may also undertake
periodic need / demand assessment of skills to help future
expansion of training activities. The nodal agency may
also co-ordinate between different line departments of
the Central and state governments engaged in training
and employment activities.
5.104 The Sehore Report suggested that at state level
the nodal agencies for rural and urban sectors may be the
Rural Development and Commerce and I ndustri es
depart ment s respect i vel y wi t h t he aut hori t y of
coordi nat i on rest i ng wi t h St at e Pl anni ng Boards/
Commissions/Departments assisted by the Directorate
of Economics and Statistics [DES]. At divisional level a
Committee headed by the Revenue Commissioner may
be constituted with collectors and other divisional level
offi cers as members to determi ne the strategy for
implementing training programmes. A few NGOs of
repute may also be incorporated as members. At district
level, the District Planning Committee may be entrusted
wi t h t he f unct i on of i mpl ement i ng t he t rai ni ng
programmes. A few sarpanches from strategic Gram
Panchayats may be co-opted for suggesting skills keeping
in view the grass–root realities. Similarly a few urban
ward members may be involved for identifying specific
skills for urban areas.
5.105 The two studies on the North Eastern region
have also suggested setting up of training institutions in
specific areas of interest to the two states. The study on
East Khasi Hills district recommended setting a new
training institution for the construction trades in the district
as there is a large demand for construction workers in
the North Eastern Region in general and in Meghalaya
in particular. The study on I mphal district suggested
setting up of an institution like the National I nstitute of
Fashion Technology for the development of the handloom
and handicraft sector in Manipur. I t has also called for
establishment of an institution for providing training in
the food processing sector. The study also feels that the
State I nstitute of Rural Development (SI RD) in Manipur
could be promoted as a full fledged training centre in the
form of an autonomous body.
5.106 Based on stake holder consultations, the studies
have i denti fi ed areas i n whi ch ski ll trai ni ng of the
informal sector workforce could take place. The Madhya
Pradesh study identified the following skills in which
training could be organized in the rural areas: animal
and poultry rearing, repair and fabrication of agricultural
implements, T.V. repair, preparation of bricks, plastic
molded items and plastic cord, preparation of soyabean
milk, preparation of tomato sauce, papad, bari, pickles,
etc and masala grindings, manufacturing of wooden toys,
training in computer operation, preparation of biscuit,
sweets etc. decoration items, fancy jute bags, making of
bangles etc. For urban areas, skills like auto repair, cell
phone [ mobile ] repair, furniture making and repair
tailoring, tyre remoulding, zari work, repair of tractor
t rol l i es beaut i ci ans, preparat i on of gunny bags,
manufacturing of cement products like tiles, pipes, security
service etc have been identified.
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.107 The various studies have noted that there is
strong gender bias in the existing training systems for
informal sector workers. For example, apprenticeship
systems were male oriented. They have, therefore, stressed
the promotion of gender sensitive training strategies. The
Madhya Pradesh study has specifically recommended that
special training facilities may be arranged for girls so
that the training venue may either be the same village or
at most some nearby village. Similarly, post training work
may be made available to women trainees near their place
of residence.
5.108 An important recommendation emerging from
the studies is that financial support may be provided to
subsidise wage losses of unorganised sector workers during
their training. Moreover, as part of the training strategy
soft skills like marketing, communication, attitudinal and
behavioural changes should also be imparted.
5.109 I t thus emerges from these studies that the need
for upgrading skills is felt widely among both the rural
and urban workforce. For women, even more than men,
it is important to establish training facilities which can
upgrade skills close to their door-step in a flexible manner.
As far as possible, skill development should be linked to
certification (formal skills) and improved livelihoods/jobs.
The decentral i sed trai ni ng faci l i ti es can emerge i n
alternative ways but their development may need to be
encouraged by a district nodal agency, which will also
serve as a Labour Market I nformation Centre keeping
records of potential trainees and trainers. The district
agency would also be the appropriate body to do a need/
demand assessment in order to guide skill expansion in
the area. The nature of this nodal agency could be state
specific and could link with the state level coordinating
institution.
Recent Government Initiatives for Expansion
of Skill Training
5.110 We note that, on the recommendations of the
different reports discussed earlier, Government of I ndia
has recently initiated a major restructuring of the skill
development system in the country. The Prime Minister’s
National Council on Skill Development (NCSD) has
been set up for giving policy directions and periodic review
of skill development efforts to address the issue of skill
development by expansion of training capacity in a mission
mode. The Council includes seven Union Ministers,
Deputy Chairman, Planning Commission, Chairman of
the NMCC, Chairman of the NSDC and six non-official
experts in the area of skill development. The Council
will be responsible for vision setting and laying down
broad strategies for skill development.
5.111 The Council will be supported by a National Skill
Development Coordination Board (NSDCB) which will
be charged with the coordination and harmonisation of the
Government’s initiatives for skill development spread across
the seventeen Central ministries and state governments with
the initiatives of the National Skill Development Corporation
(NSDC). The Board has been set up in the Planning
Commission under its Deputy Chairperson. The NSDCB
has thus emerged as the main body in the three tier structure
put into place by Government of India which will oversee
its skill development policies and bring about an accelerated
growth of formal skill acquisition in the economy through
the public and private sectors. At present the NSDCB has
been allocated a sum of Rs. 300 crores to support innovative
ideas by the ministries to expand skill training in the PPP
mode.
5.112 The National Skill Development Corporation
has been created by Ministry of Finance as a non-profit
corporation to support the expansion of private sector
initiatives in skill development. The Corporation will have
an initial corpus of Rs. 15,000 crores, to which the
Central Government has already contributed Rs. 1000
crores. The corporate sector, international development
agenci es and others are expected to contri bute the
remaining amount. At a meeting on the NSDC held in
August 2008 and chaired by the Finance Minister, the
private corporate sector has already announced its decision
to provide 51 per cent of the equity base.
5.113 The principal function of the Corporation will
be to provide financial support to private sector initiatives
i n ski l l devel opment . The operat i onal det ai l s and
objectives of the Corporation have not yet been detailed.
But it is proposed that the NSDC also be given some of
the functi ons related to formulati on of courses and
certification; accreditation of training institutions, and
creation of sector skill councils. The first meeting on the
NSDC presided over by the Finance Minister has taken
the decision to create fifty sector skill councils in high
67
growth sectors. I t appears that the NSDC i s bei ng
envisaged as a large body with several functions apart
from financing private sector initiatives.
5.114 Given the urgency of skills development at a
wide scale, the Commission welcomes the setting up of
the NSDC. The Prime Minister’s National Council on
Skill Development has adopted a document outlining the
Vi si on, St rat egy and a set of Core Pri nci pl es for
developing skills in I ndia.
5.115 The vision envisages designing an inclusive skill
system for creating 500 million skilled people by 2022
and bridging the divides of gender, rural/urban, organized/
unorganized employment, and traditional home-based and
contemporary work place-based occupations. The system
would focus on the outcomes, consumer choice and
competition and will ensure dynamic adjustment of supply
(trained candidates) to changes in demand (employment).
5.116 Overall, the strategy would focus on ‘folding the
future in’ which would lead to innovative solutions being
found for the issues faced. As part of the strategy, skills
would be made fungible and bankable. The system would
be made more open/flexible that allows individuals to
accumulate knowledge and ski lls and convert them
through testing and certification into higher diplomas
and degrees. Making the process of skills acquisition
bankable, especially for the poor will result in a demand-
driven approach. Given the asymmetry in development
across I ndi a, the strategy wi l l focus on co- created
solutions by working with the states, civil society and
community leaders and not concentrate only on public-
private partnership. The strategy would also emphasize
game-changing delivery by, for example, making public
institutions above high school levels available for skill
development by private sector after school hours. This
combination of public investment with private sector
capaci ty woul d l ower the cost of ski l l generati on.
Accelerated English learning classes would be included
in vocational training curriculums and attempts made to
incentivise English instruction.
5.117 The core operating principles for skill building
programmes emphasi ze t arget i ng market f ai l ure,
decentrali zati on, maxi mum use of exi sti ng physi cal
infrastructure, focus on modularity, open architecture and
short-term courses, linking financing to outcomes, on-
j ob- t rai ni ng and expandi ng f ormal empl oyment .
Government programmes must target the massive market
failure in vocational training for labour market outsiders
(less skilled, less educated, people from small towns,
women, etc.) mostly via funding innovations. Financing
of skill building must be separated from delivery and
government money should be available for both private
and publ i c del i very thereby promoti ng choi ce and
competition. All government financing should be linked
to placement ratios and outcomes instead of input metrics
as at present. Moreover, the bulk of financing must be
made available directly to candidates as scholarships, skill
vouchers, out come- based rei mbursement s et c.
Apprenticeships will be encouraged as these are powerful
vehicles for skill development because of ‘learning while
earning’ and ‘learning by doing’. A large number of
government buildings are available which could be put
into an asset bank (with no transfer of title or ownership)
and used for private and public skill delivery. Vocational
training at present should focus on short, relevant and
effective courses that get candidates into the workplace
like the MES of Ministry of Labour & Employment.
Skill building efforts must be accompanied by education
reforms. The core principles must also include creation
of a framework and i nfrastructure for i nformati on
dissemination around key metrics for public and private
training institutions including a voluntary rating and
participatory ranking system. This should be accompanied
by an effective assessment and credible certification system.
Employment exchanges need to be restructured as career
cent ers who wi l l channel i se candi dat es i nt o j obs,
apprenticeships and training.
Conclusion
5.118 As shown in this chapter, the emphasis of the
Governmental training system has mainly been on formal
VET and training facilities show regional concentrations,
with the southern and western region being better served.
The training capacity is also very limited in comparison
to the requirements. A large number of ministries and
programmes are, however, also involved in providing
informal training but due to lack of standardisation and
quality, their impact is also limited. There are a variety
of NGO and private sector initiatives in the area of skill
S yste m o f S k ill D e ve lo p m e n t in I n d ia
68
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
development. However, private sector initiatives are
mainly focused on educated youth and both NGO and
private sector initiatives currently have a very limited
outreach and their spread is weaker in precisely those
regions which are likely to witness faster labour force
growth in future.
5.119 Recent changes introduced by government have
been made with the purpose of providing greater cogency
and coordi nati on to ski ll development poli ci es and
programmes and to provide greater finance to worthy
private sector initiatives. The greater challenge is to assess
“demand” and to make the right kind of training available
at the grass-roots where informal sector workers live and
work. The findings of the district-level studies sponsored
by the Commi ssi on emphasi ze the i mportance of a
decentralized training system going down to the district
and the block levels. This approach is in consonance
wi th the recommendati on of the Second Nati onal
Commission for Labour calling for block level vocational
educational institutions.
69
Appendix A5.1 Appendix A5.1 Appendix A5.1 Appendix A5.1 Appendix A5.1
Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries /
Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.)
T TT TTotal otal otal otal otal 3868300 3868300 3868300 3868300 3868300
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining aining aining aining aining 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent)
1. 1. 1. 1. 1. Ministr Ministr Ministr Ministr Ministry of Human Resour y of Human Resour y of Human Resour y of Human Resour y of Human Resource De ce De ce De ce De ce Dev vv vvelop elop elop elop elopment ment ment ment ment 1295000 1295000 1295000 1295000 1295000
-Vocationalisation of Secondary Education 1000000
-Polytechnics 295000
2. 2. 2. 2. 2. Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) 895000
-Craftsmen Training Scheme(CTS) 406000*
-Apprenticeship Training Scheme(ATS) 258000
-Short TermCoursesbased on Modular EmployableSkills(MES) (Target) 200000
-CraftsInstructor Training Scheme(CITS) 1000
-Advanced Vocational Training Scheme 30000
-Hi-tech Training Scheme
- Women Training Programme
3. 3. 3. 3. 3. Ministr Ministr Ministr Ministr Ministry of R y of R y of R y of R y of Rur ur ur ur ural De al De al De al De al Dev vv vvelop elop elop elop elopment ment ment ment ment 3000 3000 3000 3000 3000
-National Instituteof Rural Development (NIRD) 3000
4. 4. 4. 4. 4. HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector 2500 2500 2500 2500 2500
-Training by Construction Industry Development Council (CIDC) 2500
5. 5. 5. 5. 5. Ministr Ministr Ministr Ministr Ministry of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustries & P ies & P ies & P ies & P ies & Public Enter ublic Enter ublic Enter ublic Enter ublic Enterpr pr pr pr prises ises ises ises ises 10000 10000 10000 10000 10000
-Counseling, Retraining and Redeployment of Rationalized Workersof
CPSEs(Formerly NRF) 10000
6. 6. 6. 6. 6. Depar Depar Depar Depar Department of I nfor tment of I nfor tment of I nfor tment of I nfor tment of I nformatio matio matio matio mation n n n n T TT TTec ec ec ec echnolog hnolog hnolog hnolog hnology yy yy 41500 41500 41500 41500 41500
-DOEACC - ‘O’ level 41500
7. 7. 7. 7. 7. Depar Depar Depar Depar Department of tment of tment of tment of tment of T TT TTour our our our ourism ism ism ism ism 1100 1100 1100 1100 1100
-Food Craft Institutesunder StateGovernments 1100
I nfor I nfor I nfor I nfor I nformal mal mal mal mal T TT TTr rr rraining aining aining aining aining 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent)
1. 1. 1. 1. 1. Ministr Ministr Ministr Ministr Ministry of Human Resour y of Human Resour y of Human Resour y of Human Resour y of Human Resource De ce De ce De ce De ce Dev vv vvelop elop elop elop elopment ment ment ment ment 517700 517700 517700 517700 517700
-Community PolytechnicScheme 331000
S yste m o f S k ill D e ve lo p m e n t in I n d ia
70
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
-Jan Shikshan Sansthan 180000
-National I nstitute of Open Schooling – 6700
DistanceVocational Education Programmes
2. 2. 2. 2. 2. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of T TT TTexti les exti les exti les exti les exti les 40000 40000 40000 40000 40000
-Decentralized Training Programme
-Weavers’ ServiceCentres
-CooperativeTraining
-PowerloomCentres
-Indian JuteIndustriesResearch Association
-Central Wool Development Board
-Central Silk Board
-Training Centresfor Handicrafts
-North –eastern Handicraftsand HandloomsDevelopment Corporation
Apparel Export Promotion Council (AEPC)
3. 3. 3. 3. 3. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of W WW WWo oo oomen & Chi ld De men & Chi ld De men & Chi ld De men & Chi ld De men & Chi ld Dev vv vvel op el op el op el op el opment ment ment ment ment 247000 247000 247000 247000 247000
-Support to Training and Employment Programme for Women (STEP) 87000
-Swalamban (previously NORAD) 53000
-Training in Homescalepreservation of fruitsand vegetables
(by Community Food and Nutrition Extension Units) 23000
-Central Social WelfareBoard 24000
-Kishori Shakti Yojana, etc.
-Other Programmes 60000
4. 4. 4. 4. 4. Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture 200000 200000 200000 200000 200000
-Training in Agricultural Extension
-Training in useof Agricultural Implements& machinery
-Soil Conservation Training Centre
-CFQC&TI
-NPPTI
-CooperativeEducation and Training
5. 5. 5. 5. 5. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of F y of F y of F y of F y of Food P ood P ood P ood P ood Pr rr rrocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustri es i es i es i es i es 2500 2500 2500 2500 2500
Food Processing & Training Centres(FPTCs)
InstitutionslikeCentral Food Technology Research Institute
Paddy Processing Research Centre
Council of Entrepreneurial Development Programme(EDP)
6. 6. 6. 6. 6. Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment 15000 15000 15000 15000 15000
-National Instituteof Mentally Handicapped
-National Institutefor theOrthopedically Handicapped
71
-Institutefor Physically Handicapped
-National Institutefor theHearing Handicapped
-National Handicapped Financeand Development Corporation
-National Schemeof Liberation and Rehabilitation of Scavengersand
their Dependents
-National Scheduled Castesand Scheduled Tribes
Financeand Development Corporation
-Rehabilitation Council of India
7. Ministr Ministr Ministr Ministr Ministry of R y of R y of R y of R y of Rur ur ur ur ural De al De al De al De al Dev vv vvelop elop elop elop elopment ment ment ment ment 200000 200000 200000 200000 200000
-Swarnjayanti GramSwarozgar Yojana (SGSY) 200000
8. Ministr Ministr Ministr Ministr Ministry of Housing & U y of Housing & U y of Housing & U y of Housing & U y of Housing & Ur rr rrban P ban P ban P ban P ban Po oo oov vv vver er er er ert tt tty Al y Al y Al y Al y All e l e l e l e l eviatio viatio viatio viatio viation nn nn 150000 150000 150000 150000 150000
-Urban Self Employment Programmeunder Swarna 150000
Jayanti Shahari Rozgar Yojana (SJSRY)
9. Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses 180000 180000 180000 180000 180000
10. HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector 13000 13000 13000 13000 13000
Building Centresof HUDCO 13000
11. 11. 11. 11. 11. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of Health & F y of Health & F y of Health & F y of Health & F y of Health & Fami l ami l ami l ami l ami l y y y y y W WW WWel far el far el far el far el fare ee ee 36000 36000 36000 36000 36000
BasicTraining of multipurposehealth workers 20000
Promotional training of FemaleHealth Assistants 16000
12. 12. 12. 12. 12. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of T TT TTr rr rri bal Affai rs i bal Affai rs i bal Affai rs i bal Affai rs i bal Affai rs 19000 19000 19000 19000 19000
Vocational Training Centres(VTC) in Tribal Areas 19000
*Excludes5.27 lakh seatsin ITCs
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Summary &
Recommendations
6
Introduction
6.1 This Commission has reviewed the role
of knowl edge based i nput s acqui red (i .e.
education, skills and technical education). These
i nputs cl earl y pl ay a very si gni fi cant rol e i n
promoting growth, especially in the emerging
knowl edge economy. As shown by t he
Commission’s earlier report (NCEUS 2007) these
inputs are also important from the individual’s
point of view as they provide a basis for income
and productivity growth.
6.2 The deficiencies with regard to education
and ski l l devel opment i n I ndi a have been
considered by the Commission in chapters 2 and
3 of thi s report. A l arge part of the I ndi an
workforce has low educational attainment and
even lacks basic foundation skills in the form of
l i t eracy and numeracy, al t hough t hi s may
gradual l y change wi t h i mproved access t o
elementary education. The skill base in I ndia is
mostly informal and thus difficult to adapt to
changing market and technological environments.
As far as formal skill training is concerned, the
present syst em suf f ers f rom a number of
deficiencies. Besides, the proportion of trained
people is far below those achieved by a host of
developing and developed countries. This, no
doubt, has profound developmental implications
both for the workers as well as the economy as a
whole. From the demand side, with the economy
experiencing rapid growth, skill shortages are
being experienced across the board and draw
at t ent i on t o ski l l devel opment by i ndust ry
federati ons, i nternati onal organi zati ons and
national bodies.
6.3 The i ssue of ski l l s has t o be
contextualized in I ndia in terms of the specific
charact eri st i cs of t he workf orce whi ch i s
predomi nantl y i nformal and engaged i n the
unorganised sector. More than three-fifths of this
workf orce i s sel f - empl oyed whi l e of t he
remaining who are regular or casual wage workers,
only half are employed in the organised sector. I n
the years to come as well, the bulk of employment
is likely to be in the unorganised sector of the
economy. Therefore, the skill requirements of the
unorganised sector will have to be visualized quite
differently from that of the organized sector. This
report is an attempt in that direction.
Approach of the Report
6.4 The present report has focused upon and
di scussed t he ski l l - rel at ed i ssues of t he
unorgani sed workers i n some detai l . Formal
training (i.e. training in a structured manner) has
mainly been accessed by students / workers with
secondary and post-secondary education. The
chances of acquiring formal training are currently
much lower for women, those with less than
secondary education, the poor, and those from
socially deprived backgrounds. Training capacity
is currently located in a few Southern and Western
states whereas the increase in labour force will
73
be in the eastern and northern.states. The empirical,
anal yti cal and practi cal i ssues that pertai n to ski l l
development and training for the informal sector are
indeed quite different from what is documented by the
reviews by earlier commissions/ committees. Some of
these issues are briefly summarised as below, followed
by a set of concrete recommendations for addressing them.
6.5 This Commission has underscored the need to
understand the heterogeneity of the informal sector in
I ndia, which leads to a wide range of training needs,
requiring analysis and policy that is different from that
of the formal sector. At the same time, we recognize that
addressing and attending to the training needs of those
who operate in the informal sector will eventually lead
to the generation of a pool of manpower that can cater to
the priorities and structures of the formal sector as well.
I t is from this standpoint that we address the issues that
come up when we discuss training in the informal sector
and t he suggest ed rubri c of a st ruct ure f or ski l l
development in the economy.
6.6 The informal sector is highly heterogeneous,
encompassing production units of different features and
in a wide range of economic activities, as well as people
(i.e. workers, producers, employers) working in service
activities or producing under many different types of
employment relations and production arrangements.
6.7 Some basic questions regarding training and
skill-building or upgrading as applied to the informal
sector are: for whom, for what, of what kind and how
best it can be provided. As far as the motivation for
training is concerned, those working in the informal sector
may not immediately see the need for further skills
acquisition. They may have little knowledge about where
to go even if the skills are seen to be required. The
principal problems of poor literacy and numeracy often
prevent i nformal sector workers from parti ci pati ng
successfully in the conventional training programmes,
even if they perceive the need for training. Training can
also be prohibitive in terms of costs – both direct and
indirect. Even token fees for the training can form a real
barrier for participating in training. Working hours are
often long and any time off from the productive work
means loss of income, which would affect the willingness
of workers to join a training programme, even if it is
relevant and easi ly avai lable. The trai ni ng needs of
different segments of the informal workers also have to
be factored in. For example, the expansion of training
needs to be gender equitable and gender sensitive, which
can not be in the nature of stereotyped expansion alone
or left entirely to the market. These issues, therefore,
has t o be kept i n mi nd when desi gni ng t rai ni ng
programmes for the informal sector.
6.8 Comi ng t o t he cont ent of t rai ni ng, t he
competencies that are required in the informal sector in
a range of activities or also in micro-enterprise based
production are a combination of ‘social competencies’,
including basic literacy and numeracy and the ability to
seek out markets and negotiate as well as technical skills
that might be industry or trade based.
6.9 A further set of issues relates to identification of
relevant demand for training for unorganised sector
workers. I t is often suggested that the training should be
responding to market demand with a greater role for the
private sector and for enterprises. This is a very pertinent
issue as state run vocational education and training systems
tend to be too supply driven and far-removed from market
demand. There is an assumption that by virtue of their
closer contact with the market, an employer-operated
training could be more efficient with private firms and
small enterprises at their centre, coordinated through
busi ness associ ati ons and other such i ntermedi ary
institutions. However, it is seen clearly that the impulses
generated from the market to the products and services
of the informal sector are often indirect. To use existing
patterns of market demand alone to signal what the
training needs of the economy are and also determine
the outcomes of training initiatives will by-pass most
members in the informal sector. Nor can it be expected
that private enterprises would be forthcoming for skill
upgradation for a large part of this sector. I n fact, market
development in a number of sectors is likely to follow
the skill development initiatives for workers in this sector.
Thus, expansion of skill upgradation of unorganised sector
workers needs to follow an assessment of the social
demand rather than existing market demand. This being
the case, skill expansion in this sector will require the
active participation of public agencies, while giving ample
scope and opport uni t y t o t he pri vat e and non-
S u m m a ry & R e co m m e n d a ti o n s
74
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
governmental actors, who wish to provide expanded
opportunities for training to such workers.
6.10 Thi s requi res coordi nati on between publ i c
agencies and private actors at all levels, including the
decentralized ones, particularly at the district-level, in
order to be able to arrive at realistic assessments of the
training needs of those in the unorganised sector on the
one hand and that of different areas and sectors, on the
other.
6.11 Finally, even as we recognize the diversity of
training needs and the differential perceptions and abilities
to undertake training in the informal sector, it is necessary
to assert that the ski lls that are percei ved or found
necessary in the informal sector have to be ‘formally’
provi ded as thi s i nvolves processes of accredi tati on,
certification and standardization that are essential for
enhanced productivity, both in the informal and formal
sectors.
6.12 Keepi ng t he above i ssues i n mi nd, t he
Commission has put forward recommendations below
for building a skill development and training system that
expli ci tly focuses on the expansi on of VET for the
informal sector workers who generally also have low
levels of education. I t may be noted that in doing so, we
have deliberately not focused upon systems of formal
training which are primarily intended for organised sector
workers with a reasonable level of education. These
systems of training are a subject of reform and have been
discussed extensively in other reports.
Recommendations
I. Proposed Target
6.13 The share of persons having formal training is
just 2.6 per cent of the labour force as per the NSS 2004-
05 Survey. Based on the studi es sponsored by the
Commission which have assessed the demand for skill
upgradati on and the exi sti ng trai ni ng systems, the
Commission’s review of VET experience and the link
between VET and development, the Commission would
like this rate of formal training to reach a level of 50 per
cent of the labour force by 2021-22. The persons who
would be targeted would include potential entrants into
the labour force as well as the existing pool of workers
whose skills require to be upgraded.
6.14 The 11
th
Plan has assumed vocational education
to increase from 1 million to 2.5 million per year and
vocational training capacity to increase from about 2.5
million to 10 million, to a modal mix of 12.5 million per
year. This will raise the annual VET capacity to 15 million
per year. The Commission estimates that if by scaling up
the skill development programmes, the training capacity
can be increased to 18 million by the beginning of the
XI I plan, the target of 50 per cent of formally trained
labour force can be achieved by 2021-22 or within three
plan periods. Although this is a long time frame, given
the vast size of the untrained labour force as well as its
other characteristics, this time frame is realistic.
6.15 The total labour force at that point is projected
to be 623 million by 2021-22. Our assumptions imply an
increase of formal trained labour force from 11 million
in 2004-05 to around 310 million in 2021-22.
6.16 I t may be noted that in the long run (by 2021-
22), the annual increase in labour force would be about 8
mi lli on. Si nce the trai ni ng programmes would have
succeeded in covering the backlog, the long run VET
capacity in the country may not exceed 12 million.
II. Organisational Structure
6.17 Given the urgency of development of adequate
skills in the economy at a wide scale, the Commission
welcomes the setting up of the Prime Minister’s National
Council on Skill Development (NCSD) to address the
issue of skill development by expansion of training capacity
in a mission mode.
6.18 As mentioned in para 5.111, a National Skill
Development Coordination Board (NSDCB) has also
been set up in the Planning Commission under the Deputy
Chairperson, Planning Commission to coordinate skill
development programmes i n the publi c and pri vate
sectors. The NSDCB has thus emerged as the main body
i n t he t hree t i er st ruct ure put i nt o pl ace by t he
Government of I ndi a whi ch wi l l oversee i t s ski l l
development policies and bring about accelerated growth
of formal skill acquisition in the I ndian economy through
the public and private sectors. At present the NSDCB
has been allocated a sum of Rs. 300 crores to support
innovative ideas by the ministries to expand skill training
in the PPP mode.
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6.19 Gi ven t he enormi t y of t he t ask and t he
deficiencies in the present institutional infrastructure for
ski l l devel opment i n t he unorgani sed sect or, t hi s
Commission is of the view that the NSCDB should
launch a National Mission for Development of Skillsin the
Unorganised Sector, to support skill development in the
unorganised sector. Apart from coordinating the expansion
of skill development in the unorganised sector in a mission
mode, a certain quantum of funds should be at the disposal
of the mission to support skill development in a responsive
mode, focusi ng upon strengtheni ng of i nsti tuti onal
infrastructure, creation of labour market information
systems etc. in a manner that is detailed below.
6.20 The principal function of the National Skill
Development Corporation that has been created by the
Ministry of Finance as a non-profit corporation is to
support the expansion of private sector initiatives in skill
development. While the private sector initiatives have
greater capacity to undertake skill training in a self-
financing mode and cater principally to educated youth,
the Commission has shown that a number of NGO
i ni ti ati ves are underway whi ch seek to provi de ski ll
development to unorganised sector workers in innovative
ways. I n the Commission’s view, the main purpose of the
Corporation should be to provide financial support to
NGOs and non-profit organizations engaged in the
training of informal sector workers, while the financial
needs of for-profit training organizations should be
catered to by banks and other existing financial institutions.
The Corporation has also been given some other functions
which we discuss later in this chapter.
Vocational Training
6.21 The key requi rement s i n a nat i onal ski l l
development system are the identification, development
and accreditation of the training providers and training
institutions; development of suitable courses based on a
careful assessment of needs and demands; ensuring that
such a system meets the needs of potential trainees, and
the certification of trainees. The expansion of formal
training as envisaged in the targets mentioned above will
require a manifold expansion in each of these tasks along
with the development of fresh approaches which will
increase the relevance of training both for the trainees
and the potential employers or users of services and
products of the trained workers.
6.22 At present, the National Council for Vocational
Trai ni ng (NCVT) has been set up t o advi se t he
government on matters relating to vocational training,
for accreditation of institutes and prescribing of standards
and curricula under the Craftsmen Training Scheme (for
the I TI s/I TCs). Courses under the CTS cater mainly to
organised sector requirements. There is presently a void
as far as training in short term courses for the unorganised
sector is concerned. The MOLE has sought to fill this
voi d through i ts modular employable ski lls (MES)
programme and skill development initiative (SDI ). The
Commission views the SDI as a commendable initiative
under which there is a positive effort to expand relevant
skill training for school drop-outs and by backing this
through the development of modular courses, registration
of vocational training providers and certification by third
party agencies. However, these developments are still
li mi ted and are wi thi n the framework of a nati onal
scheme. There is therefore the need for a national level
st ruct ure t hat can provi de t he backbone t o ski l l
development in lagging areas and address the needs of
course development, recognition and accreditation of
training providers, and certification. These functions may
be performed by the NCVT with enlarged scope and
functions which will continue to play a pivotal role in
providing a framework for formal skill development in
the country. I n other words, the NCVT may be identified
as the primary agency charged with setting of standards,
certification of skills and accreditation of providers for
all certificate based training for which the minimum
el i gi bi l i ty i s l ess than hi gher secondary educati on.
Alternatively, a new body with well defined statutory
responsibilities may be charged with these functions.
6.23 I n performing these functions, the NCVT will
have to work closely in coordination with the private
sector, with employer bodies as well as those who have
experience in assessing training requirements of the
unorgani sed sect or. The DGET i s devel opi ng a
framework i n whi ch these stakehol ders are cl osel y
i nvolved wi th the expansi on of trai ni ng. Gi ven the
complexities of the task, the DGET has proposed the
setting up of Sector Skills Councils. These Councils
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should have adequate representation of stakeholders who
understand sector-specific training needs for the informal
sector as well.
6.24 The overlap of functions such as the formulation
of courses and certification; accreditation of training
institutions, and creation of Sector Skill Councils between
the NCVT and the NSDC should be avoided, and the latter
body should focus on financial initiatives as discussed earlier.
6.25 The Commission also recommends that a state
level structure should be established in the states which
will perform the same coordinating functions at the state
level which the NSDCB will perform at the national
level, within the overall framework provided by the Prime
Minister’s Council and guidelines set by the latter. This
body shoul d be ful l y responsi bl e for maki ng and
i mplementi ng a trai ni ng plan at the state level and
coordinating and monitoring skill and training initiatives
in the states. The Commission is of the view that given
the vast nature of the task and the heterogeneous nature
of the unorganised sector, training initiatives need to be
decentralized to the State and sub-state levels. The SCVTs
should have full responsibility for evolving a framework
for curricula development which meets the local needs,
devel opi ng a certi fi cati on framework. Thus, i n the
Commission’s view, while the NSDCB/NCVT will be
responsible for overall co-ordination and the development
of guidelines and curricula at the national level, the state
level bodies and the SCVTs will undertake the relevant
activities at the state level.
6.26 I n the Commission’s view, the expansion of skill
development involving millions of people will require
coordinated action between public and private agencies
at the local level. The Commission is of the view that
the skill development programmes for the unorganised
sector should be operati onali sed by a Di stri ct Ski ll
Development Council (DSDC) which would be the most
crucial link in the entire skill development framework.
The DSDC will function under the District Planning
Committee or Zilla Parishad and will be managed by an
executive committee consisting of the major stakeholders
in the skills arena at the district level. These would,
typically, be employer’s associations, prominent NGOs
working in the district, representatives of artisans and
members of the di stri ct admi ni strati on. The mai n
executive of the district skill development agency should
be a professional who is devoted full-time to the activities
of the agency. The Commission envisages that the DSDC
will be staffed with competent professionals and technical
persons. I n order to give greater operational flexibility to
the DSDC, they could be registered as societies or non-
profit companies. However, the exact organizational
model for the DSDC including its management and
pattern of stakeholder involvement may be kept flexible
and may be decided by the state governments.
6.27 The DSDC will create a database of existing
skills by undertaking skill mapping, assess training needs
on the basis of existing as well as potential industrial and
employment trends, formulate a district training plan
involving all stake holders, ensure convergence of various
training programmes, coordinate training activities of
government departments as wel l as other trai ni ng
providers, monitor and evaluate training programmes,
provide handholding to the trainees, and keep track of
the trainees after completion of their training. The agency
will assess the infrastructural needs for training and help
in its proper maintenance. The agency will help develop
a labour market information system which will consist
of a data bank of training and training providers, along
wi t h requi si t e det ai l s of t rai nees, compi l at i on of
information of skill requirements in sectors and sub-sectors
and also put into place a computerised MI S.
Vocational Education
6.28 At the apex l evel , the Mi ni stry of Human
Resource Development will continue to coordinate the
development of vocational education in the country.
However at the district level, the DSDC may be given
the task of dovetailing VE with training requirements.
The capaci ty for vocati onal educati on needs to be
increased significantly. This will have to be accompanied
by making the course content more responsive to market
demand. The industrial associations may be associated
with formulation and revision of course curricula. Links
should be established between the vocational education
stream and school education as well as higher education.
Students should be able to move between vocational and
general educati on streams by provi di ng them wi th
multiple entry and exit options. Public expenditure on
vocational education needs to be increased significantly.
77
The NSDCB can perform the task of coordination between
vocational education and vocational training components.
The State may design their own variants taking regional
specifics into account.
III. Expansion of Skill Development
6.29 In the existing training systems for the unorganised
workers the government system finances and provides (on
its own or with the assistance of private providers), either
formal or informal training; or different types of private
providers offer formal or informal training. The expansion
of skill development for unorganised workers have to be
formulated to reflect the needs of the economy and the
strengths and weaknesses of the different types of training
systems on the one hand and the realities of the unorganised
sector on the other. This needs to be done through a
combination of public and private sector initiatives, the latter
term being defined broadly to include all types of non-
governmental providers, (trainers, and others) involved in
certification, accreditation etc. In the public sector, expansion
of training can be done through consolidation, strengthening
and expansion of the existing schemes that are already in
existence and have been functional at the district level for
some time now, by undertaking new initiatives, and also by
integrating initiatives such as the cluster development
programme of the MSME under it.
Consolidation & Strengthening of Training
Programmes
6.30 The t rai ni ng syst em shoul d l i nk ski l l
devel opment wi t h l i vel i hood promot i on. Ski l l
development for the unorganised sector workers has to
be seen as an integral part of livelihood support which
includes a number of elements including identification
of activities, credit and technological support, capacity
building and backward/forward linkages.
6.31 The governmental system is a very large source
of skill training for unorganised sector workers. Almost
al l l arge government l i vel i hood promot i on and
developmental programmes have a training component;
e.g. the rural development programmes involve training
for SGSY beneficiaries. Some training is also built into
the NREGP. The MSME trains under the PMRY and
REGP and also through the MSME-DI . The Ministry
of Health has trai ni ng programmes for Anganwadi
workers and Accredited Social Health Activists (ASHAs)
and so on. The stress is on providing short duration
functional training. The advantage of this training is that
it is linked to a specific livelihood based activity being
undertaken or likely to be undertaken by the individual
and often with different types of assistance/handholding.
Government programmes rely on formal as well as
informal trainers. Moreover, these programmes also reflect
PPP mode as training in a number of instances is imparted
by NGOs / private providers.
6.32 Furt her, t here are many ot her l i vel i hood
promotion activities which are being carried out with
the support of banks and NGOs. Prominent among these
are the micro-finance based activities supported through
the NABARD-SHG linkage programmes which also
support training initiatives.
6.33 The main problems associated with these training
programmes are that they are not linked to any standards,
the qual i ty i s hi ghl y vari abl e, there i s no standard
curriculum and usually there is no certification. In addition,
the Government also extends informal sector training
through the SSKs and Nehru Yuvak Kendras. However,
the training under these programmes is also neither
standardised nor certified. It isrecommended that thequality
of training imparted under themshould beimproved and
standardized and theseschemesbeintegrated under thetraining
plan of theDSDC. Theseschemesshould alsoinvolveformal
certification procedurestoensurestandardization and minimum
standards of quality. Over time, training under these
programmesshould belinked totheMES framework.
The Skill Development Initiative (SDI) & the
Entrepreneurship Skill Development
Programmes (ESDP)
6.34 The Skill Development I nitiative (SDI ) scheme
of the Ministry of Labour & Employment is a five year
project duri ng whi ch one mi lli on persons would be
trained or their existing skills tested and certified under
Modular Employable Skills (MES) framework. The
MES offers many elements which are appropriate to the
development of training initiatives for the informal sector.
Under the SDI , workers can be trai ned i n formal
institutions, or informally trained workers could take up
a certification examination. Such workers could be offered
facilities to go through a “finishing school” before taking
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
such an exami nati on. Si nce the SDI and the MES
framework can be adapted for training of all informal
sector workers, the Commission is of the view that the
SDI should be gradually strengthened and target under
the scheme significantly increased along with budgetary
allocations. Larger number of training providers and
assessing bodies should be brought under its ambit.
6.35 Similarl y, the Ministry of Micro, Small and
Medium Enterprises is focusing on Entrepreneurship
Ski l l Devel opment programme (ESDP) i n t he
unorganised sector conducted through MSME-DI s.
Emphasis is on conducting outreach training programmes
in backward areas, particularly for weaker sections of the
society. Trainees from weaker sections are given a stipend.
No fee is charged from SC and ST candidates. Training
programmes are being conducted in 60 disciplines under
ESDP. The Commi ssi on i s of t he vi ew t hat t hi s
programme should be steadily expanded as it has the
potential to provide relevant skills to a large number of
target group beneficiaries in the unorganised sector.
Focused Approach towards Improvement
in Training in Clusters
6.36 The UNI DO and the MSME have identified
about 6400 clusters in the country, of which more than
6000 are classified as low-tech and are certainly likely to
be requiring skill upgradation. The following specific
recommendat i ons are bei ng made wi t h regard t o
dovet ai l i ng of t he exi st i ng cl ust er devel opment
programmes in I ndia and the proposed district level skill
agency. First, it has to be recognized that an important
component of development in the unorganised sector is
that of clusters and a process of skill development focused
at the district level has to explicitly take into account the
needs of clusters in the district. Effective partnership
needs to be established between the DSDC and all clusters
i n t he di st ri ct . The DSDC shoul d consi st of
representatives from different stakeholders in the clusters
that exist in specific districts and district cluster skill
development plans should be evolved and dovetailed with
cluster programmes run by different agencies such as
UNI DO, NABARD, MSME, KVI C and so on.
Alternatively, if cluster development programmes in
districts are managed by a cluster officer, she/he has to
be part of the DSDC along with the representatives from
di f f erent agenci es t hat run cl ust er devel opment
programmes.
6.37 Second, i n order to moti vate cluster actors
regarding the desirability of expanded skill development
programmes, the methodology evolved by the UNI DO
and the MSME’s cluster i ni ti ati ves to generate the
condi t i ons f or concert ed j oi nt act i on among
enterprises,and recognize the interdependencies between
them and the advantages of joint initiatives, need to be
expanded into the skills and training arena. Such initiatives
are already in place for marketing and financing and can
be easily extended to skills. This involves convincing
entrepreneurs, artisans, industry associations and other
cluster stakeholders about the desirability of investing in
and undergoing training for sectoral upgradation and also
evolving a system of incentives for participating in training
programmes.
6.38 Thi rd, t here are several sect oral ski l l
development programmes that are being conducted by
different agencies that function as part of the industries
that are organised in the form of clusters. For example,
in the leather industry, institutes such as the Footwear
Desi gn and Development I nsti tute and the Central
Leather Research I nstitute conduct training programmes
aimed at providing skilled manpower for the export
segment of the leather industry. Many of these initiatives
cater to the limited number of trainees and are often
targeted at higher ends of the training spectrum, whereas
the upgradation requirements of the industry need training
at low value added levels in the chain, as in raw hide and
skin collection or the production of semi-finished leather,
where very large numbers of unorganised sector workers
are employed. Such integration of training requirements
of workers in the lowest level in the value chain with the
more overtly perceived need for skilled workers at higher
levels can take place only with more active intervention
by state agencies working together with the cluster level
organizations. District level subsidized institutions to train
such lower level workers, set up under the DSDC in
collaboration with cluster actors, can perform this role.
6.39 Fourth, the incentive structures and costs to be
i ncurred by pot ent i al t rai nees have t o t ake i nt o
consideration differences between clusters, i.e., artisanal,
micro-enterprise based or mixed firm ones. For example,
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purely artisan clusters will require co-ordination among
artisans and recognition or education about the benefits
of training, but costs will have to be borne by the state
agencies under one of the programmes. Expenses and
infrastructure for training of trainers can come under
cluster based artisan improvement programmes that are
l ocated i n cl usters, agai n joi ntl y under the cl uster
development programme and the DSDC. I n the case of
clusters where some larger firms dominate through value
chain or subcontracting relationships, a method to divide
costs of training by size of firm might need to be evolved
along with positive incentives for firms that undertake
training.
Provision of Formal Training to Informally
Trained Workers
6.40 The largest system of ski ll development for
unorganised workers that is in vogue today is the informal
training system in which workers learn some skills on
the job from skilled workers/ master craftsmen. Our
analysis in this report shows that such training is spread
across all major activity categories, includes workers with
low levels of education and across the poorer segments.
I n other words, should the productivity and earning
potential of such workers be raised through appropriate
formal training, it would also have a major pro-poor
impact.
6.41 The main advantage of the system is that workers
combine learning with earning. The passage of skills from
skilled worker to unskilled worker varied depending upon
worker background (family or hired worker, male or
female), type of industry or trade etc. A major potential
constraint in this system is the static skill level of the
worker with limited adaptations in a world of changing
technologies/demand. No ‘schooling’ of the skilled worker
is possible and he/she only learns while doing.
6.42 I n order to address the existing problems with
informal apprenticeship systems at the district level, crucial
attention has to be paid to the issue of awareness and
incentives to those who impart training (master craftsmen)
as well as those that receive training (apprentices) in
informal apprenticeship systems. First, it is essential that
the formal certification systems being developed under
the SDI are able to reach out to the informal training
system through the district level structure suggested earlier,
or through specific schemes such as the SDI , the ESDP
etc. The formal apprenticeship can be supplemented by
including a component of specific training, for instance,
on technical and theoretical skills that could be provided
at the workplace or in a supporting centre, again using a
system of incentives and possibly coordinated by boards
such as KVI C, HHDC and so on. Formal training inputs
can also be offered at the workplace through mobile units
or trucks equi pped wi th compl ete workshops that
regularly visit workplaces and provide instructions on
probl ems at hand. There can be i ncenti ves for the
apprenticeships in the form of reimbursement of fees
charged on completion of the course, low or no fees
charged for those from SC/ST backgrounds, and so on.
6.43 Second, it is necessary to continuously upgrade
skills of master craftsmen/trainers themselves in order to
be able to cope with changing technology, fashion and
shifting markets. This will involve sectoral initiatives that
combine skill upgradation at a higher level with other
sector- speci fi c i nterventi ons such as technol ogi cal
upgradation and initiatives for expansion of scale under
cluster development programmes. Some of these issues
are dealt with by the SDI . But the Commission has
recommended a full- fledged programme for taki ng
informal training to the next level, while providing some
form of employment assurance for a period during training
to the trainee. The Commission has, therefore, proposed
a programme for empl oyment assurance and ski l l
formation which are discussed below.
Proposed Programme for Employment
Assurance & Skill Formation
6.44 The Commission recommends that in order to
operationalise the suggestions given in the earlier paras
to strengthen and upgrade (formalize) the systems of
informal training, a massive Programmefor Employment
Assuranceand Skill Formation with theaimtodevelop human
capital through on-job-training be launched. The scheme
will provide employment to poor individuals for about
six months and provide them formal marketable skills.
This will help the trainees realize the importance of
training. The proposed scheme is discussed in detail in
the following paras.
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Goals and Objectives
6.45 Given the need to expand formal training in a
demand oriented fashion and to provide some incentive
for formal skill training to unorganised sector workers,
the Commission proposes a scheme for Employment
Assurance and Skill Formation to meet the twin purpose
of skill development in a practical fashion, and for meeting
employment needs of these workers.
6.46 The purpose of the scheme is to develop human
capi t al t hrough on- j ob t rai ni ng, whi l e provi di ng
employment to poor persons for about six months; to
train them and to provide them with formal marketable
skills, so that at the end of this period, having been
employed at least at the minimum wage, they qualify for
regular employment or self-employment at higher wages
utilizing the skills acquired. I n that sense, the proposed
scheme may also be considered as a programme for skill
formation through apprenticeship and the six months’
job at mi ni mum wages may be regarded as “on job
training”.
Eligibility
6.47 All young persons will be eligible under the
scheme who: a) are in the age group 18-29, (b) are with
at least primary, but not more than secondary level of
education; and (c) have an economic eligibility depending
upon locati on, as di scussed below under the heads
“Coverage” and phasing. Subject to this, and subject to
training slots being available, the scheme may be seen as
providing an entitlement to all registered youth to receive
training through placements.
Programme of Training
6.48 The scheme envisages dovetailing training / wage
employment with existing schemes of the Ministry of
Labour and Employment (Skill Development I nitiative)
and ot her schemes of Sel f - Empl oyment and
Entrepreneurship Development.
6.49 All employers willing to provide on-job training
would be registered by the proposed SDS in its MI S.
These employers could i nclude all mi cro and small
enterprises, master craftsmen and other skilled self-
employed workmen, self-help groups, cooperati ves,
municipalities, government departments, public sector
undert aki ngs and any ot her urban agency, whose
bonafides in providing on-job training in designated skills
could be easily accepted.
6.50 All workers seeking training in specific areas of
their choice would also be registered under the scheme.
6.51 The allotment of workers to employers/trainers
could be by mutual agreement or through employment
exchange/placement centres in the district.
6.52 All employers/ trainers would provide on-job
training to the worker and a daily stipend not less than
the declared minimum wage for unskilled workers. The
daily working hours shall not be more than 8 hours and
workers will be allowed weekly off.
6.53 Every worker under t he scheme woul d be
expected to undergo certification in the designated skill.
For this purpose, this programme would be dovetailed
with the Skill Development I nitiative which is developing
course curricula under the Modular Employable Skills
Programme and certification norms for a wide variety of
skills.
6.54 I t will be the responsibility of the employer to
provide employment for at least six months to the eligible
worker. A mechanism will have to be set up to quickly
arbitrate any possible infringement of the terms of this
scheme by any of the parties involved.
Coverage
6.55 The scheme is intended for youth with at least
primary but less than higher secondary levels of education.
Further, it is largely intended to cover poor youth. I n
urban areas, eligibility may be limited to those whose
household income is less than Rs 7000 per month as on
March 1, 2008. I n rural areas, the scheme may cover
youth from landless poor, marginal and small farmer
households who are about 80 per cent of the total with
the requisite educational eligibility. During 2004-05, an
estimated 104 million youth in I ndia had educational
qualifications as per this scheme. Of them, about 30 per
cent (33 million) were in urban areas and the rest (71
million) were in rural areas. About three-quarters of the
urban youth were in smaller towns (less than one million
populati on). About two-thi rds of the youth i n thi s
category are in the labor force.
81
Phasing of the Scheme
6.56 At present , empl oyment and i ncome
opportunities are distinctly higher in large towns. On
the other hand, the training capacity is weaker in rural
areas, particularly in poorer states. Since the scheme
requires building up of administrative capacity in the
districts, in the first phase we may start with urban areas
with poorer employment opportunities and cover some
50 non-metropolitan smaller towns with population
bet ween 50,000 and 5 lakhs, as pilots. This may be
followed by the other segments of the eligible population,
such as the eligible youth in the rural areas and larger
towns.
Financing requirement
6.57 The total financial provision per worker would
be Rs 10,000/- which would cover (a) about six months
of pre- or post-certification on job-training/employment
for which the employer be provided Rs. 50 per day as
subsidy towards stipend being paid to the worker (b) Rs
500 as the cost of certification, as provided under the
SDI ; (c) Rs. 1000, as cost of training/incentive to the
provider/employer. The worker would have the flexibility
of receiving training either pre or post-certification, or
both. However, the subsidy towards the stipend would
be back-ended in the case of the former; i.e. the employer
would receive the stipend subsidy only if the worker is
certified.
6.58 As indicated above, the programme requires a
one time financial outlay of Rs. 10,000 per worker, which
is the same as that provided under the NREGA. A
provision of Rs 10,000 crores over five years for this
project would thus ensure addi ti onal trai ni ng-cum-
empl oyment t o one crore persons t hrough t hi s
mechanism, expanding the present training capacity by 2
mi l l i on per year under t he programme. A l arger
budgetary allocation would provide larger job creation.
However, it will require galvanizing the existing and newly
creat ed admi ni st rat i ve mechani sms t o ef f ect i vel y
implement this proposal.
Benefit and Impacts
6.59 The proposed programme will provide formal
skills to those youth who are from the poorer sections
and who have dropped out of school without achieving
higher secondary education. The scheme would provide
the following principal benefits:
• Al l ow t he hi t hert o unski l l ed and poorest
individuals to acquire skills for employment and
increase their employment potential and the
wage earning capacity.
• Enhance t he sourci ng of cert i fi ed ski l l ed
manpower in line with workplace requirements
and customize skills, education and training to
the requirements of the industry.
• I ntegrate unemployed poor into the mainstream
of an expanding economy who can be fully
employable on a sustainable basis without any
further sop or subsidy.
• Further, the programme is quite flexible and
can be applied differently in different contexts,
within the same overall financial parameters.
6.60 The scheme envisages a demand driven training
wherein the employers/industry would determine the
skills required for their manpower.
IV. Training Providers
6.61 Avai l abi l i ty of qual i ty trai ners i s general l y
perceived to be one of the main bottlenecks to expansion
of skill development programmes. Hence a major effort
is required to enhance their availability. A register of
training providers should be prepared and updated as a
part of the labour market information system. To provide
training at block-level, the trainers will have to be from
the local areas so that they would be willing to reside
and provide training in those areas. I ndustry associations
can help in training the trainers in their respective fields.
MOUs could be signed by the NSDCB/NCVT with
existing training institutions and industry associations for
this purpose. Master crafts persons would also be a part
of the mission to create a larger universe of trainers.
V. Training Infrastructure
6.62 I t has been observed that with devolvement of
large number of functions and funds to the panchayati raj
institutions, physical infrastructure is available at the block
l evel whi ch coul d be used f or ski l l devel opment
programmes. However, the availability of infrastructure
varies between blocks and may not be adequate for the
S u m m a ry & R e co m m e n d a ti o n s
82
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
potential target trainees in particular blocks. Funds could
be given by the DSDC for meeting deficiency of available
infrastructure at block level. Such financial help could
be linked to the number of potential trainees in that block.
VI. Course Development and Assessment
6.63 Under the MES/ SDI framework, modul ar
courses are being developed in association with industry
associations. These courses are available for adoption by
any training provider. This process should be strengthened
and the list of courses available for training be significantly
enhanced. Such course material will have to be provided
in local languages if skill development programmes’
outreach has to expand.
6.64 Under draft NSDP of Ministry of Labour, while
Sector Skills Councils are to assess the training needs of
the organised sector Partnership Development Councils
are to perform a similar function for the unorganised
sector, at least initially. However, such an arrangement
may create unnecessary confusion. Skill Sector Councils
may look after the training needs of the unorganised sector
also from the beginning.
VII. Labour Market Information System
6.65 I t i s necessary to set up a Labour Market
I nformation System (LMI S) at the national, state and
district levels linking various trainers and the trainees.
Such a system will help in linking the trainers and the
t rai nees and al so hel p i n moni t ori ng t he t rai ni ng
programmes. The DSDC will be performing the task at
the district level. For this purpose, the states may consider
remodelling the existing employment exchanges so that
these can also take up the functions of tracking trainees,
li sti ng formal and i nformal trai ni ng provi ders, and
providing relevant placement information to both trainees
and potential employers. Over a period of time, the LMI S
systems could sell their services and be made financially
viable. The systems at the state and national level will
have to aggregate the inputs from the districts to arrive
at the national scenario.
VIII. Support to & Synergy with Private
Initiatives
6.66 There are a vast number of private initiatives to
support skill training. These include in-house training
by corporates, private for-profit training initiatives and
private non-profit initiatives by foundations, trusts, NGOs
etc. The government ’s approach towards these initiatives
should be to provide them the maximum opportunity
and flexibility for growth. While the public sector will,
no doubt, like to rely on NGO/private agencies to front-
end its training initiatives, special effort should be made
to preserve the autonomy of those institutions which are
tryi ng to develop i nnovati ve models of trai ni ng for
unorganised sector workers. Support may be provided
for such initiatives as well as other non-profit initiatives,
in the form of subsidies for capital costs or coverage of
finance, with proper incentives to expand their outreach
among the weaker sections of the unorganised sector
workers. The Commission had already envisages such a
role for its proposed National Fund for the Unorganised
Sector. This function must also be extended to the NSDC.
IX. Addressing Gender Issues in Skill
Development
6.67 The prevalent education and training system
reinforce the cumulative disadvantage faced by women
in the labour market. As shown in this report, women in
the unorganised workforce have much lower levels of
educat i on and t rai ni ng t han men. Furt her, i n t he
unorganised segment, existing training is concentrated in
certain gender stereotyped vocations, such as tailoring.
There often a structural bias against women in the existing
training systems. This is because gender stereotyping and
discrimination results in their facing several obstacles such
as lack of time and heavy domestic workload, distance to
classes, male teachers/trainers, opposition from family
members, and poor linkages with other development
inputs, such as income generating programmes. Further,
i n si tuati ons where trai ni ng provi si on i s subject to
minimum educational requirements as in the formal
training system in I ndia, this discriminates against women
even more t han men. I n addi t i on, si nce gender
discrimination in the labour market restricts access to
employment and results in lower remuneration in most
types of employment, women themselves might not be
motivated to enter training programmes. All the issues
that affect workers in the informal sector, therefore, affect
women within it even more intensively.
83
6.68 The Commission believes that the proposed
expansion in training systems should pro-actively foster
gender sensitivity and gender equity in training through
proper design, advocacy, and incentives. Four broad sets
of issues may be addressed here. First, the content of
training programmes for women may need to integrate
component s of l i t eracy, numeracy, busi ness ski l l s,
confidence skills in a bigger way. Second, training for
women is likely to more effective when done in a formal,
participatory way through groups. I n a range of activities
such as street vending, city cleaning services and domestic
servi ces, such i nterventi ons have resulted i n better
remuneration to those who organise in groups and this
should include training. I n fact, in urban areas, these
groups can function as employment exchanges where
women can be encouraged to register to undergo training
and in turn be placed in employment at given terms. The
Kudumbashree initiative in Kerala shows that this can
be coordinated fairly effectively at the district or block
level, without running into difficulties with fraudulent
agencies. Third, programmes should address the special
constraints faced by women in participating in training.
This includes absence of mobility, need for child care
and gender segregation. The training itself should mainly
comprise modular, short-term courses with flexible entry
and exit options and mobile training provision. Fourth,
training women only in gender stereotypes activities has
both specific and general ramifications, since such training
not only would perpetuate gender segmentation, but also
often leads to over saturation of trained women in low
paid work. This does not mean that skills training should
no l onger be provi ded i n areas around women’s
reproductive or conventional care role, but that the main
consideration is for women to gain access to work which
is better paid and with better conditions. Hence, women
must also be encouraged to train for “hard” technical skills
as well in areas such as agriculture, where there role as
producers is far more significant today. Admittedly, NGOs
may have a better niche in doing this.
X. Financing
6.69 The significant expansion in VET will require
a consi derabl e up- scal i ng of f i nanci al resource
commitment by the government and by the private sector
and both these entities have signaled their commitment
to increase their spending on skill training. The present
commitment of the Central government is to increase
expenditure on VET to Rs. 22,800 crores during the
11
th
Plan. I n addition, a sum of Rs. 300 crores has been
committed to the NSDB and Rs. 1000 crores has been
allocated to the NSDC. A large part of this allocation
will go to support strengthening of VET infrastructure
for training of workers for the organised sector through
I TI s and Polytechnics.
6.70 This Commission has advocated that (i) a sum
of Rs. 5000 crores be allocated to the NSDB for a National
Mission for Skill Development in the Unorganised Sector
for supporting the cost of setting up and operating the
proposed institutional infrastructure for expansion of
training initiatives at the district level and, (b) at least a
doubling the existing training schemes under the SDI
and MSME (Rs. 1000 crores; and (iii) Rs. 10,000 crores
for the proposed Employment Assurance Scheme. I n
effect, the Commission’s proposal imply a significant
increase (to about Rs 40,000 crores) in the financial
allocation for VET over the next five years. Given the
strong positive externalities emerging from expansion of
training, especially of the unorganised sector workers,
this increase can be considered necessary. Moreover, if
necessary, the resources can be raised through a levy on
the turnover of companies to help partially meet the cost
of skill development programmes. Tax concessions may
also be extended for maki ng contri buti ons for ski ll
development
XI. Conclusion
6.71 This Report of this Commission has focused on
the formal training of workers who are either employed
i n the unorgani sed sector, or are l i kel y to joi n the
unorganised sector as waged or self-employed workers.
These are typically workers with low levels of education
and economic wherewithal, a proportion of whom have
acquired skills through informal training. We have shown
in this report, that formal training has focused so far on
those with better educational attainments (at least higher
secondary education), coming from better-off segments
of society. Although a majority of these trained persons
are not absorbed in the organised sector, they would still
tend to constitute an upper stratum of workers in the
unorganised sector. Due to perceived skill shortages in
the organi sed sector (for formal as well as i nformal
S u m m a ry & R e co m m e n d a ti o n s
84
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
workers), most recent proposals have focused on higher
end formal trai ni ng, whi le recogni si ng the need for
training of unorganised sector workers. This Report, on
the other hand, has based itself on the premise that there
is also a very significant developmental need to improve
the skill level of unorganised sector workers (both self-
employed and waged) who are at the lower segment. We
further showed that the characteristics and training needs
of this segment of the workforce are quite different from
the upper segment requiring significant differences in
approach – in terms of content, institutional delivery etc.
6.72 Expanding the training for such workers would
requi re act i ve part i ci pat i on of di f f erent t ypes of
stakeholders – government departments, trainers, private
training providers, NGOs and employers. The financing
and cost recovery models for such training would also be
quite different. The Commission is of the view that if its
recommendati ons, i ncludi ng the proposed Nati onal
Mi ssi on, a f resh i nst i ut i onal approach and t he
Employment Assurance Programme are adopted, it would
be possible to expand training to cover 50 per cent of the
labour force within a reasonable time frame. This, in
turn, would not only provide a firm anchor to the growth
process, it would also help in spreading the benefits of
growth to a much wider cross-section of the workforce.
85
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1.http://labour.kar.nic.in/eandt/etiindex.htm
2.http://dget.nic.in/schemes/cts/nvts.pdf
87
Ab b re viatio n s & Acro n ym s
ACF Ambuja Cement Foundation
ADB Asian Development Bank
AEPC Apparel Export Promotion Council
AI CTE All I ndia Council of Technical Education
AI TT All I ndia Trade Tests
APEDA Agricultural and Processed Food Products Export Development Authority
ASHA Accredited Social Health Activist
ATI Advanced Training I nstitutes
ATS Apprenticeship Training Scheme
AVI Accredited Vocational I nstitutes
BPL Below Poverty Line
CFQC&TI Central Fertiliser Quality Control & Training I nstitute
CIDC Construction I ndustry Development Council
CII Confederation of I ndian I ndustries
CI TS Craft I nstructor Training Scheme
CL Casual Labour
CPSEs Central Public Sector Enteprises
CSR Corporate Social Responsibility
CTI Central Training I nstitute
CTS Craftsmen Training Scheme
DES Directorate of Economics & Statistics
DGE&T Directorate General of Employment & Training
DIC District I ndustries Centre
DOEACC Department of Electronics Accreditation for Computer Courses
DRDA District Rural development Agency
DSDC District Skill Development Council
DSDCs District Skill Development Centres
DTP Desk Top Publishing
DWCUA Development of Women and Children in the Urban Areas
EDC / EDP Entrepreneurship Development Centres / Programme
ESDP Entrepreneurship Skill Development Programmes
FPTC Food Processing & Training Centres
GOI Government of I ndia
HHDC Handicrafts & Handlooms Exports Corporation
HRD Human Resource Development
HS Higher Secondary
HUDCO Housing and Urban Development Corporation
ICT I nformation and Communication Technologies
88
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
IDA I nternational Development Asociation
IIT I ndian I nstitute of Technology
I L&FS I nfrastructure Leasing and Financial Services
ILO I nternational Labour Organisation
I TC / I TI I ndustrial Training Centres / I nstitute
JSS Jan Shikshan Sansthan
KVIC Khadi and Village I ndustries Commission
LABS Livelihood Advancement Business School
LMI S Labour Market I nformation System
MAYA Movement for Alternatives and Youth Awareness
MES Modular Employable Skills
MHRD Ministry of Human Resource Development
MI S Management I nformation System
MI TI / MTI Model I ndustrial Training I nstitutes / Model Training I nstitutes
MoLE Ministry of Labour and Employment
MOU Memorandum of Understanding
MSME Ministry of Micro, Small and Medium Enterprises
MSME-DI Micro, Small and Medium Enterprises-Development I nstitute
NABARD National Bank for Agriculture and Rural Development
NAC National Apprenticeship Certificate
NCEUS National Commission for Enterprises in the Unorganised Sector
NCSD National Council on Skill Development
NCVT National Council for Vocational Training
NDDB National Dairy development Board
NGO Non-Governmental Organisation
NID National I nstitute of Design
NI ESBUD National I nstitute for Entrepreneurship and Small Business Development
NIFT National I nstitute of Fashion Technology
NIOS National I nstitute of Open Schooling
NI RD National I nstitute of Rural Development
NMCC National Manufacturing Competitiveness Council
NOAS National Open Apprenticeship Scheme
NORAD Norwegian Agency for Development Cooperation
NPPTI National Plant Protection Training I nstitute
NREGA National Rual Employment Gurantee Act
NRF National Renewal Fund
NSDCB National Skill Development Coordination Board
NSDP National Skill Development Policy
NSS / NSSO National Sample Survey / Organisation
NTC National Trade Certificate
NVTI National Vocational Training I nstitute
89
NYKS Nehru Yuvak Kendra Sangathan
OBC Other Backward Class
OECD Organisation for Economic Co-operation and Development
PI Partner I nstitutes
PMEGP Prime Minister Employment Generation Programme
PMRY Prime Minister’s Rojgar Yojana
PPP Public Private Partnership
PSU Public Sector Units
RDAT Regional Directorates of Apprenticeship Training
REGP Rural Employment Generation Programme
RS Regular Salaried
RUDESETI Rural Development and Self Employed Training I nstitute
RVTI Regional Vocational Training I nstitutes
SAI ED Special Accredited I nstitution for Education of the Disadvantaged
SC Schedule Caste
SCVT State Council for Vocational Training
SDC Skill Development Centre
SDF Skill Development Fund
SDI Skill Development I nitiative
SE Self Employed
SEWA Self Employment Women’s Association
SGSY Swaranjaynati Gram Swarozgar Yojana
SHG Self Help Group
SI RD State I nstitute of Rural Development
SJSRY Swarna Jayanti Shahari Rozgar Yojana
SOE State Owned Enterprise
SPV Special Purpose Vehicle
SSC Sector Skills Council
ST Schedule Tribe
STEP Support to Training and Employment Programme for Women
TVET / VET Technical and Vocational Education and Training
UCEP Underprivileged Children’s Education Programme
UGC University Grants Commission
UNDP United Nations Development Programme
UNIDO United Nations I ndustrial Development Organisation
UPSS Usual Principal and Subsidiary Status
USEP Urban Self Employment Programme
UT Union Territory
UWEP Urban Wage Employment Programme
VE Vocational Education
VoTEG Vocational Training for Employment Generation
VTP Vocational Training Provider
Ab b re vi a ti o n s & Acro n ym s
90
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
An n e xu re 1 An n e xu re 1 An n e xu re 1 An n e xu re 1 An n e xu re 1
T TT TTer er er er erms of Ref ms of Ref ms of Ref ms of Ref ms of Refer er er er erence of the Commission ence of the Commission ence of the Commission ence of the Commission ence of the Commission
The Government of I ndia, constituted the National
Commission for Enterprises in the Unorganised Sector
(NCEUS) vi de Mi ni stry of Smal l Scal e I ndustri es
Resolution No. 5(2)/2004-I CC dated 20
th
September,
2004, under the Chai rmanshi p of Professor Arjun
Sengupta. The Terms of Reference of the Commission
are as follows:
i. Revi ew the status of unorgani zed/ i nformal
sect or i n I ndi a i ncl udi ng t he nat ure of
enterprises, their size, spread and scope, and
magnitude of employment;
ii. I dentify constraints faced by small enterprises
wi th regard to freedom of carryi ng out the
enterprise, access to raw materials, finance, skills,
entrepreneurship development, infrastructure,
technology and markets and suggest measures
to provide institutional support and linkages to
facilitate easy access to them;
iii. Suggest the legal and policy environment that
should govern the informal/unorganized sector
f or growt h, empl oyment , export s and
promotion;
iv. Examine the range of existing programmes that
relate to employment generation in the informal/
unorganized sector and suggest improvement
for their redesign;
v. I dent i f y i nnovat i ve l egal and f i nanci ng
i nstruments to promote the growth of the
informal sector;
vi. Review the existing arrangements for estimating
empl oyment and unempl oyment i n t he
informal sector, and examine why the rate of
growth in employment has stagnated in the
1990s;
vii. Suggest elements of an employment strategy
focussing on the informal sector;
viii. Revi ew I ndi an labour laws, consi stent wi th
labour rights, and with the requirements of
expandi ng growth of i ndustry and servi ces,
part i cul arl y i n t he i nf ormal sect or, and
improving productivity and competitiveness;
and
ix. Review the social security system available for
l abour i n t he i nf ormal sect or, and make
recommendations for expanding their coverage
91
An n e xu re 2 An n e xu re 2 An n e xu re 2 An n e xu re 2 An n e xu re 2
P PP PPast and P ast and P ast and P ast and P ast and Pr rr rresent Composit esent Composit esent Composit esent Composit esent Composition of the Commission ion of the Commission ion of the Commission ion of the Commission ion of the Commission
The composition of the Commission is as follows:
D DD DDr rr rr. .. .. Arjun S Arjun S Arjun S Arjun S Arjun Sengupta engupta engupta engupta engupta Chai rman Chai rman Chai rman Chai rman Chai rman
Chairman, [ From 20.09.2004 to 01.07.2005
Centre for Development and Human Rights, and from 17.11.2005 till date]
New Delhi
P PP PPr rr rrof of of of ofessor K. essor K. essor K. essor K. essor K. P PP PP. .. .. K KK KKannan annan annan annan annan Full-time Member Full-time Member Full-time Member Full-time Member Full-time Member
Fellow, [ From 01.11.2004 till date]
Centre for Development Studies,
Ulloor, Thiruvananthapuram 695011, Kerala
Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Full-time Member Full-time Member Full-time Member Full-time Member Full-time Member
Professor, [ From 01.05.2006 till date]
Centre for Studies in Regional Development,
Jawaharlal Nehru University, New Delhi 110067
S SS SShr hr hr hr hri i i i i V VV VV.K. .K. .K. .K. .K. Malhotr Malhotr Malhotr Malhotr Malhotra, a, a, a, a, I AS (Retd.) I AS (Retd.) I AS (Retd.) I AS (Retd.) I AS (Retd.) Member S Member S Member S Member S Member Secr ecr ecr ecr ecretar etar etar etar etary yy yy
[ From 01. 03.2006 till date]
S SS SShr hr hr hr hri B i B i B i B i B.N. .N. .N. .N. .N. Y YY YYugandhar ugandhar ugandhar ugandhar ugandhar Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Member Member Member Member Member, ,, ,, [ From 05.11.2004 till date]
Planning Commission,
New Delhi 110001
P PP PPr rr rrof of of of ofessor essor essor essor essor T TT TT.S .S .S .S .S. .. .. P PP PPapola apola apola apola apola Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Director, [ From 06.04.2005 ti ll date]
I nstitute for Studies in I ndustrial Development,
Vasant Kunj I nstitutional Area, New Delhi.110070
D DD DDr rr rr. .. .. K. K. K. K. K. Jai shankar Jai shankar Jai shankar Jai shankar Jai shankar Full-ti me Member Full-ti me Member Full-ti me Member Full-ti me Member Full-ti me Member
Former Vice Chancellor, Warangal University, [From 01.12.2004 to 9.03.2006]
Andhra Pradesh
S SS SShr hr hr hr hri Bibek Debr i Bibek Debr i Bibek Debr i Bibek Debr i Bibek Debro oo ooy yy yy, ,, ,, Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Director, [ From 27.10.2004 to 20.12.2005]
Rajiv Gandhi I nstitute for Contemporary Studies,
New Delhi 110001.
Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Member S Member S Member S Member S Member Secr ecr ecr ecr ecretar etar etar etar etary yy yy
[ From 01.11.2004 to 18.02.2006]
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An n e xu re 3 An n e xu re 3 An n e xu re 3 An n e xu re 3 An n e xu re 3
Composit Composit Composit Composit Composition of the Advisor ion of the Advisor ion of the Advisor ion of the Advisor ion of the Advisory Boar y Boar y Boar y Boar y Board dd dd
1. 1. 1. 1. 1. P PP PPr rr rrof of of of ofessor Bhal c essor Bhal c essor Bhal c essor Bhal c essor Bhal chandr handr handr handr handra Mungekar a Mungekar a Mungekar a Mungekar a Mungekar, ,, ,,
Member, Planning Commission,
Yojana Bhavan, New Delhi.
2. 2. 2. 2. 2. Swami Agnivesh, Swami Agnivesh, Swami Agnivesh, Swami Agnivesh, Swami Agnivesh,
President, Bonded Labour Liberation Front,
13, South Avenue, New Delhi.
3. 3. 3. 3. 3. Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla,
(Formerly Professsor of Economics,
Jawaharlal Nehru University, New Delhi)
I nstitute of Human Development,
Old I AMI Building (3rd Floor).
I .P.Estate, Mahatma Gandhi Marg,
New Delhi-110002.
4. 4. 4. 4. 4. P PP PPr rr rrof of of of ofessor Mahendr essor Mahendr essor Mahendr essor Mahendr essor Mahendra De a De a De a De a Dev vv vv, ,, ,,
Director, Centre for Economic and Social Studies,
Begumpet, Hyderabad.
5. 5. 5. 5. 5. Ms. Ms. Ms. Ms. Ms. Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar, ,, ,,
Editor, Manushi
C-1/3 Sangam Estate, 1, Underhill Road, Civil Lines,
Delhi -110054.
6. 6. 6. 6. 6. Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee,
Self-Employed Women’s Association (SEWA)
Opposite Victoria Garden, Bhadra, Ahmedabad-380001.
7. 7. 7. 7. 7. S SS SShr hr hr hr hri Jogi nder K i Jogi nder K i Jogi nder K i Jogi nder K i Jogi nder Kumar umar umar umar umar, ,, ,,
President,
Federation of Tiny & Small Scale I ndustries of I ndia (FTSSI ),
General Metal I ndustries, B-189, I ndustrial Estate,
Ludhiana, Punjab.
8. 8. 8. 8. 8. Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze,
Delhi School of Economics, Department of Economics,
Delhi University, Delhi-110007.
9. 9. 9. 9. 9. Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri ,
Council for Social Development,
53, Lodhi Estate, New Delhi - 110003
93
An n e xu re 4 An n e xu re 4 An n e xu re 4 An n e xu re 4 An n e xu re 4
Composit Composit Composit Composit Composition and ion and ion and ion and ion and T TT TTer er er er erms of Ref ms of Ref ms of Ref ms of Ref ms of Refer er er er erence of the ence of the ence of the ence of the ence of the
T TT TTask F ask F ask F ask F ask For or or or orce on S ce on S ce on S ce on S ce on Skil kil kil kil kill F l F l F l F l For or or or ormat mat mat mat mation in the Unorg ion in the Unorg ion in the Unorg ion in the Unorg ion in the Unorganised S anised S anised S anised S anised Sector ector ector ector ector
A-25024/9/2005-NCEUS
Government of I ndia
National Commission for Enterprises in the Unorganized Sector
16
th
/19
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Dated the 9
th
June, 2005
ORDER ORDER ORDER ORDER ORDER
Subject: Constitution of Task Force on Skill Formation in the Unorganised Sector.
I t has been decided to set up a Task force on Skill Formation in the Unorganised Sector.
2. The composition of the Task Force shall be as follows:
Shri K.K.Jaswal, Member Secretary, NCEUS Chairman
Shri B.N.Yugandhar, Part Time Member, NCEUS Member
Dr.Madhav Chavan, Director, PRATHAM Member
Lt.General (Retd.) S.S.Mehta, Principal Adviser,CI I Member
Ms.Nalini Gangadharan, Executive Director, Member
Dr.Reddy’s Foundation
Shri K.K.Mittal, DGE&T, M/o Labour & Employment Member
Dr.S.D.Awale, Joint Education Adviser (Technical), Member
D/o Secondary & Higher Education
Shri Sharda Prasad, Labour Commissioner, Member
Government of Uttar Pradesh
Smt.Neelam Nath, Joint Secretary, NCEUS Member Secretary
Shri J.D.Hajela, Director, NCEUS will provide administrative and secretarial support to the Task Force.
3. The Terms of Reference of the Task Force shall be as follows:
3.1 I dentify the characteristics and specificities of skill formation in the Unorganised Sector.
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
3.2 Review the existing arrangements for skill formation in the Unorganised Sector at the Central and
State levels.
3.3 Examine the adequacy of the training and skill development component of the current programmes
of wage employment and self-employment and recommend measures for improving their
effectiveness.
3.4 Recommend measures for optimally utilizing the existing infrastructure for training and skill
formation for addressing the needs of the Unorganized Sector.
3.5 I dentify the unmet as well as emerging demand for skill sets in an expanding and globalising
economy and devise an institutional framework to rectify the mismatch between demand and
supply of skills.
3.6 Study the characteristics of urban employment and under employment and assess the potential of
programmes of skill development as a strategy of employment generation in urban areas.
3.7 I dentify the best practices in the programmes of skill formation in the Unorganised Sector operated
by Government and Non-government organizations.
3.8 Design a National Skill Development I nitiative for the Unorganised Sector and suggest a strategy
for its implementation.
3.9 To consider any other matter related with or incidental to the above Terms of Reference.
4. The Chairman of the Task Force may co-opt any other person as Member of the Group.
5. The Chairman may invite specialists to particular meetings of the Task Force.
6. The Task Force shall submit its draft report within six months of the issue of the Order and its final
report within eight months.
7. The expenses towards TA/DA of the official members of the Task Force shall be met by the Government
Departments/I nstitutions to which they belong. The TA/DA of non-official Members and invitees to
meetings will be paid by NCEUS as admissible to Grade I Officers of the Government of I ndia.
( J.D.HAJELA)
Director (NCEUS)
To
1. Shri K.K.Jaswal, Member Secretary, NCEUS
19
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Telfax 011- 23701234
E mail : [email protected]
2. Shri B.N.Yugandhar, Part Time Member,NCEUS
Member, Planning Commission,
Yojana Bhawan, Sansad Marg,
New Delhi 110001
Ph:011- 23096566, Fax:011- 23096567
Email : [email protected]
95
3. Dr.Madhav Chavan, Director, PRATHAM
B3/3, Safdarjung Enclave, 1
st
Floor,
New Delhi 110029
Ph :011-26716083/84, Email: [email protected]
4. Lt.General (Retd.) S.S.Mehta, Principal Adviser,CI I
I ndia Development Foundation
249F, Sector 18, Udyog Vihar,
Phase I V, Gurgaon 122015
Tel :95124- 5014055/ 4535
5. Ms.Nalini Gangadharan, Executive Director,
Dr.Reddy’s Foundation
6-3-668/10/77&78, Durganagar Colony
Punjagutta, Hyderabad-82
Tel :040- 23414603/ 3186
Fax :040-23404607
Email : [email protected]
6. Shri K.K.Mittal, DGE&T, M/o Labour & Employment
108, Shram Shakti Bhawan,
Rafi Marg, New Delhi 110001
Tel: 011-23710446, E mail : [email protected]
7. Dr.S.D.Awale, Joint Education Advisor (Technical), D/o Secondary
& Higher Education, Ministry of Human Resource Development,
Shastri Bhawan, New Delhi 110 001
8. Shri Sharda Prasad, Labour Commissioner,
Government of Uttar Pradesh, G.T.Road, Kanpur
9. Smt.Neelam Nath, Joint Secretary, NCEUS
16
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Telefax 011-23701069, E mail : [email protected]
Copy to: Copy to: Copy to: Copy to: Copy to:
1. Secretary, Ministry of Labour and Employment
Shram Shakti Bhawan,Rafi Marg, New Delhi 110001
2. Secretary, Department of Secondary & Higher Education,
Ministry of Human Resource Development,
Shastri Bhawan, New Delhi 110001
3. Chief Secretary, Govt. of Uttar Pradesh
Lucknow, Uttar Pradesh.
Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to:
1. PPS to Chairman
2. PPS to Member Secretary
3. PPS to Member (K)
4. PPS to Member ( J)
5. Director (MS)
6. Director ( JDH)
7. Director (MK)
8. Deputy Secretary (SVRM)
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Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs,
Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment
Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector
S.No. S.No. S.No. S.No. S.No. Organi sati on Organi sati on Organi sati on Organi sati on Organi sati on Comments Comments Comments Comments Comments
An n e xu re 5 An n e xu re 5 An n e xu re 5 An n e xu re 5 An n e xu re 5
I. Central Ministries Central Ministries Central Ministries Central Ministries Central Ministries
1. Ministry of Micro, Small and Medium Enterprises
1. The Ministry is in agreement with the Commission's view that
formal systems of skill imparting are essential for the growth of
the informal sector.
2. Commission may explore the possible avenues/models through
which skills development could be imparted in the informal sector
and provide a framework for such programmes in the report.
2. Ministry of Communications and Technology,
Department of Technology
No specific comments.
3. CMinistry of Tourism 1. The Ministry of Tourism is alive to the need of upgrading the
skills and building capacities of service providers of the industry.
To this end, the Ministry has commenced the scheme of Capacity
Building for Service Providers under which training are undertaken
to cover a wide range of services. For the promotion of rural
tourism, the Ministry extends assistance for capacity building in
selected villages.
4. Ministry of Youth Affairs and Sports 1. The Ministry has formulated a new scheme of National Programme
for Youth and Adolescent Development. One component of this
scheme is Youth Leadership and Personality Development which
prescribes various skill development programmes for adolescent
youth through NGOs. Nehru Yuvak Kendra Sangathan also
conducts various personality development programmes to guide
and empower the village community.
II. State Governments State Governments State Governments State Governments State Governments
1. Madhya Pradesh
1. Employment Exchanges, by virtue of having a very systematic and
classified database available with them, can function with close
collaboration with proposed district level link of informal skill
development plan. They can very well take up the role of a
sponsoring agency in the scheme proposed by the Commission.2.
Though Employment Exchanges have their own employment
market information system which works reasonably well with public
sector but is not very effective as far as private and unorganized
sector is concerned. The present system will have to be modified,
strengthened and revamped to enable it to take up additional
responsibilities.
2, Punjab Programme for Employment Assurance and Skill Development
1. I ncentive of wage subsidy is attractive
2. On-job training/employment should be post certification under
SDI
97
S.No. S.No. S.No. S.No. S.No. Organi sati on Organi sati on Organi sati on Organi sati on Organi sati on Comments Comments Comments Comments Comments
3. Pre-certification on job training/employment may be allowed where
the VTP and the employer are the same unit.
4. Monitoring of the training programme needs to be worked out
5. Provision for certification need not be made under the scheme as
it is already provided for under the SDI .
3. Uttar Pradesh 1. The unorganized sector hasto be provided with basic education, skill
development, vocational training and credit facilities for its
development, as has been correctly identified by the Commission in
itsreport. The machinery responsible for thisat the central, State and
district levels needs to be effectively mobilised with the cooperation
of the central and State Governmentsand the banking system. SHGs,
and micro finance institutions should also be made a part of it.
2. The unorganized sector is not the responsibility of a single Ministry
but i s the col l ecti ve responsi bi l i ty of al l the Mi ni stri es/
Departments.
3. I n UP the I ndustries department is implementing a number of
schemes for skill upgradation and employment generation in the
unorganized sector.
III. NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others
1. Ms. Swaminathan, MI DS, Chennai 1. While the report has brought out very well the complex character
of the unorganized sector, the recommendations do not reflect
this complex understanding of the sector. The skill development
programme to be i nsti tuted and operati onali sed has to be
organically linked to the findings of the NCEUS.
2. The Commission should do a minute scanning, scheme by scheme,
of the GOI programmes to decipher whether, how far and which
segment/category of the unorganized sector the GOI programmes,
when operationalised , will address.
3. NCEUS's recommendations should explicitly engage with the
theme of monitoring, supervision and accountability of all skill
development programmes that it recommends for the unorganized
sector.
4. The Chapter on I nternational Experiences would have been more
enriching if it had stressed in particular the authority structure,
delivery mechanism, systems of incentive /disincentives, etc. that
countries such as Germany, Japan and South Korea have put in
place to operationalise their vocational education programmes.
5. The report has very little to say on the issue of certification. Since,
very rightly, the report stresses the need for formal certification of
training for the unorganized sector, the operationalisation of the
theme and scheme of certification merits elaboration.
6. The report has very little to say, explicitly, on the role of the private
sector in vocational training.
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S.No. S.No. S.No. S.No. S.No. Organisation Organisation Organisation Organisation Organisation Comments Comments Comments Comments Comments
2. Ms Jeemol Unni 1. Good report. However, the overall flavour in the recommendations
is that the Commission accepts the broad contours of the Skill
Policy and organizational structure which is being set up by the
Govt.]
2. The only new thing about Commission's recommendations is the
Programme for Employment Assurance and Skill Formation.
This is an innovative idea. However, the very bureaucratic emphasis
on defining the employers and beneficiaries/trainees and the modus
operandi of the programme is not likely to let this system bloom.
3. I t might be useful to scatter the report with examples of women's
work and how would women fare in the new scheme.
4. To get over the excessive emphasis on bureaucratic control it may
be useful to give some specific role to NGOs, informal trade
unions etc in the setting up or in helping the system reach the
backward areas, poor, disadvantaged, women, etc.
3. Dr. Sandra Rothboek, I LO, Delhi 1. The report could add a few things, particularly in the context of
the informal and how learning within such a framework and with
these groups is distinct from the typical root learning of other
educational systems.
2. Skills cannot be isolated from a) health, b) livelihood/income and
c) literacy and numeracy and d) empowerment. This framework
is important to be added.
3. Capability approach is crucial. The key to learning is to make use
of the learning acquired for a) productive purposes and b) life by
itself. This might be important also in the context of poor
enterprises and unorganized sector per se.
4. The Lifelong learning concept, policy and overall framework of
Philippines may be studied in the context of the report
4. Federation of Tiny & Small I ndustries of I ndia 1. The Distance Education Programmes are very useful as the
students can learn while they earn.
2. Skill Development Programmes of Department of Science and
Technology needs to be strengthened.
3. The outcome of the scheme of training of retrenched workers
should be examined. The scheme needs to be strengthened and
coverage extended to more areas.
4. The National Board may launch the mission for expansion of skill
not only in the unorganized sector but also in the micro/small
enterprise sector.
5. A National level body should be created for accreditation of skill
development training centres.6. Concrete steps may be taken for
upgradation of skills of the micro-enterprise sector.
doc_676973858.pdf
Skill Formation And Employment Assurance In The Unorganised Sector
Skill Formation and
Employment Assurance in
the Unorganised Sector
NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE NATIONAL COMMISSION FOR ENTERPRISES IN THE
UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR UNORGANISED SECTOR
16
th
& 19
th
Floor, Jawahar Vyapar Bhawan,
1, Tolstoy Marg, New Delhi-110 001
www.nceus.gov.in
2009
December , 2008 December , 2008 December , 2008 December , 2008 December , 2008
Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or
19th Floor, Jawahar Vyapar Bhawan, 1 Tolstoy Marg,
New Delhi - 110001
Website: www.nceus.gov.in
Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he Ear l ier Repor t s of Nat ional Commission for Ent er pr ises in t he
Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or
1. Social Security for Unorganised Workers, May 2006
2. National Policy on Urban Street Vendors, May 2006
3. Comprehensive Legislation for Minimum Conditions of Work and Social
Security for Unorganised Workers, July 2007
4. Conditions of Work and Promotion of Livelihood in the Unorganised Sector,
August 2007
5. Financing of Enterprises in the Unorganised Sector, November 2007
6. Creation of a National Fund for the Unorganised Sector (NAFUS), November
2007
7. Report on Definitional and Statisticla Issues relating to Informal Economy,
November 2008
Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or Nat i onal Commi ssi on for Ent er pr i ses i n t he Unor gani sed Sect or
19th Floor, Jawahar Vyapar Bhawan, 1 Tolstoy Marg,
New Delhi - 110001
Website: www.nceus.gov.in
Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he Pr evious r epor t s of Nat ional Commission for Ent er pr ises in t he
Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or Unor gani sed Sect or
1. Social Security for Unorganised Workers, May 2006
2. National policy on Urban Street Vendors, May 2006
3. Comprehensive Legislation for Minimum Conditions of Work and Social
Security for Unorganised Workers, July 2007
4. Conditions of Work and Promotion of Livelihood in the Unorganised Sector,
August 2007
5. Financing of Enterprises in the Unorganised Sector, November 2007
6. Creation of a National Fund for the Unorganised Sector (NAFUS), November
2007
7. Report on Definitional and Statistical Issues relating to Informal Economy,
November 2008
8. A Special Programme for Marginal and Small Farmers, December 2008
Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for Pr evious Wor king Paper s of t he Nat ional Commission for
Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or Ent er pr ises in t he Unor ganised Sect or
1. Measure of Labour Force Participation and Utilization, January 2008
2. Contr ibution of the Unor ganised Sector to GDP Repor t of the Sub
Committee of a NCEUS Task Force, March 2008
3. Definitional and Statistical Issues Rel ating to Wor ker s in Infor mal
Employment, January 2009.
ii
P re face
The issue of skill building has been at the forefront of policy debates in recent years. India can take advantage of
its young workforce and hence the demographic dividend, only if the workforce possess relevant skills and is
ready to seize the opportunities arising domestically as well as in the international arena. Several committees/
commissions/task forces have examined the issues related to skill formation and recommended to expand/
upgrade the skill building efforts. However, most of these recommendations have generally remained focused
on the formal sector.
It is in this context that the NCEUS has examined the issue of skill formation in the unorganized sector. The
Commission has carried out a detailed analysis of the socio-economic characteristics of the skilled and unskilled
persons based on the latest set of data from the Sixty-first Round of the National Sample Survey in 2004-05. It
is estimated that only 11.5 per cent of those in the age-group 15-29 have received (or were receiving) any
training, whether formal or informal. Only 2.5 per cent of total unorganised sector workers had formal training
while 12.5 per cent had non-formal training. In the organised sector, 11 per cent workers had formal training
and another 10.4 per cent had informal training. The Commission recommends the proportion of formal
training to increase from 2.6 per cent of the labour force as per the NSS 2004-05 Survey to reach a level of 50
per cent of the labour force by 2021-22. Those targeted would include potential entrants into the labour force as
well as the existing pool of workers whose skills require to be upgraded.
The Commission has examined the specific features of the skill formation process in the unorganized sector.
In this context, it has underscored the need to understand the heterogeneity of the informal sector in India,
which leads to a wide range of training needs, requiring analysis and policy formulation that is different from
that of the formal sector. The informal sector is highly heterogeneous and encompasses a wide range of
economic activities as well as people (i.e. workers, producers, employers) engaged in manufacturing/service
activities under several types of employment relations and production arrangements. Some basic questions
related to training and skill-building/ upgrading as applied to the informal sector, and which have been discussed
in detail in this report, concern such aspects as: training for whom, for what, what kind of training and how best
it can be provided.
The Commission has put forward a set of comprehensive recommendations for building a skill development
and training system that explicitly focuses on the expansion of Vocational Education and Training (VET) for the
informal sector workers who generally also have low levels of education. While doing so, we have deliberately
not focused upon systems of formal training primarily intended for organised sector workers with reasonable
levels of education. These systems of training are a subject of reform and have been discussed extensively in
other reports.
A major highlight of this report is the proposed scheme of Skill Formation and Employment Assurance which
provides entitlements to all registered youth in the unorganized sector to receive training through placements.
The scheme will provide employment to poor persons for about six months and impart to them formal marketable
skills. The scheme is intended for youth with at least primary but less than higher secondary levels of education.
Further, it is largely intended to cover the poor youth. In the first phase, urban areas with inadequate employment
opportunities may be focused. Pilot projects in some 50 non-metropolitan smaller towns with population
between 50,000 and 5 lakhs may be taken up. This may be followed by the other segments of the eligible
population, such as youth in the rural areas and larger towns. The financial provision per worker would be Rs
ii ii
10,000/- which would cover on-the-job training/employment, cost of certification and cost of training/incentive
to the provider/employer. The programme requires a one time financial outlay of Rs. 10,000 per worker, which
is the same as that provided under the NREGA. A provision of Rs 10,000 crores over five years for this project
would thus ensure additional training-cum-employment to one crore persons through this mechanism,
augmenting the present training capacity by 2 million per year under the programme. A higher budgetary
allocation would result in larger job creation. However, the success of the programme would crucially depend
upon motivating the existing and newly created administrative mechanisms to effectively implement this proposal.
The Commission has studied the major institutional developments in the field of skill development in the last few
months which has seen the setting up of the Prime Minister's National Council on Skill Development, the
National Skill Development Coordination Board under the Planning Commission, and the National Skill
Development Corporation under Ministry of Finance. These are welcome steps as they provide an institutional
backbone for formulating policy guidelines, channelling funds and ensuring coordination in skill building efforts.
The Commission is confident that the country will not let go the present opportunity and take forward the
programme of skill-building in a Mission mode. This will help the country achieve its goal of rapid and inclusive
growth.
Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a Ar j un Sengupt a
Chairman
National Commission for Enterprises in the Unorganised Sector
New Delhi
April 24, 2009
iii iii
Ack n o wle d g e m e n ts
The Commission wishes to acknowledge the contributions of a large number of persons in the preparation of
this report. The members of the Task Force on Skill Formation in the Unorganised Sector made a valuable
contribution by holding discussions and offering suggestions and written inputs. The Commission also benefited
by the discussions in the Advisory Board. District-level studies were carried out for the Commission by the
G.B.Pant Institute of Social Sciences, Allahabad, Debate, Bhopal, and North Eastern Development Finance
Corporation (NEDFI), Guwahati.
Officials of the Government of India, particularly the Ministry of Micro, Small and Medium Enterprises and the
Ministry of Labour and Employment provided relevant material and useful feedback to the Commission. Experts
in the India office of the International Labour Organisation (ILO) and World Bank helped the Commission by
providing information on a number of issues concerning skill formation, particularly the experiences of different
countries. Editorial support was received from Dr.N.K.Nair. The Commission takes this opportunity to thank
the above individuals/organizations.
We would like to place on record our deep appreciation of the contribution of the staff of the Commission
towards preparation of this Report. Shri J.D.Hajela, Director bore the main responsibility for co-ordinating all
the activities related to the preparation of this Report. Ms. Sumangala Damodaran, Consultant rendered valuable
support in the analysis and writing of this Report. Professor Jeemol Unni and Shri Biswajeet Saikia contributed
to the first draft of the Report during their stint as Consultants to the Commission. Excellent research assistance
was provided by Ms. Swati Sachdeva, Shri Ajaya kumar Naik and Ms. T. Shobha Singh. Shri S.V.Ramana Murthy,
Director provided critical assistance on statistical issues. Shri Savitur Prasad, Joint Secretary, Shri G.Sajeevan
and Ashutosh Mishra, Directors in the Commission, Shri G.Raveendran, consultant, Shri D.P.Singh and Shri
Suresh Kumar, Under Secretaries, and Shri H.S. Chhabra, Section Officer and the whole team of supporting
staff provided excellent services in the functioning of the Commission in general and the preparation of this
Report in particular.
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P re f a c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i ii ii
A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A c k n o w l e d g e m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i i i i i i i i i i i i i i
1 . 1 . 1 . 1 . 1 . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I n t ro d u c t i o n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 11 11
2 . 2 . 2 . 2 . 2 . S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y S k i l l F o rm a t i o n , P ro d u c t i v i t y & G ro w t h -I s s u e s i n a D e v e l o p i n g E c o n o m y 4 44 44
3 . 3 . 3 . 3 . 3 . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S k i l l P ro fi l e o f t h e I n d i a n Wo rk fo rc e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 1 1 1 1 1 1
4 . 4 . 4 . 4 . 4 . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . I n t e rn a t i o n a l E x p e ri e n c e s o f S k i l l D e v e l o p m e n t & T ra i n i n g . . . . . . . . . . . . . . . . . . 3 7 3 7 3 7 3 7 3 7
5 . 5 . 5 . 5 . 5 . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S y s t e m o f S k i l l D e v e l o p m e n t i n I n d i a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 4 5 4 5 4 5 4 5
6 . 6 . 6 . 6 . 6 . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S u m m a ry & R e c o m m e n d a t i o n s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2 7 2 7 2 7 2 7 2
R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R e fe re n c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5 8 5 8 5 8 5 8 5
A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A b b re v i a t i o n s a n d A c ro n y m s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7 8 7 8 7 8 7 8 7
A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A n n e x u re s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 0 9 0 9 0 9 0 9 0
L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s L i s t o f T a b l e s
3.1 Educational Attainment of Persons, 2004-2005 ............................................................. 12
3.2 Skills of Population in the Age Group 15 -29, (1993-94) ................................................... 15
3.3 Skill Levels of Population in the Age Group 15 -29, (2004-05) (in millions) ...................... 16
3.4 Percentage of Persons in Age-group 15 - 29 Years with Formal Training among States,
(2004-2005) .................................................................................................................... 18
3.5 Percentage of Workers in Age-group 15 - 29 Years by Vocational Training Status
(2004-2005) .................................................................................................................... 18
3.6 Percentage of Persons in 15 - 29 Years with Vocational Training by Education & Gender
(2004-2005) .................................................................................................................... 20
3.7 Percentage of Persons in Age-group 15 - 29 Years Receiving/ Received Formal Vocational
Training by Field of Vocational Training & Sex (2004-2005) ................................................ 22
3.8 Percentage of Persons in Age-group 15 - 29 Years Receiving Formal Vocational Training
by Institute of Training & Sex, (2004-2005) ..................................................................... 25
3.9 Vocationally trained youth in Labour Force: International Comparison........................... 27
4.1 Training Systems ............................................................................................................ 39
4.2 Advantages / Disadvantages of Unregulated Apprenticeship ........................................ 41
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s L i s t o f F i g u re s
3.1 Educational Attainment of Workers Aged 15 & Above by Sectors, (2004-2005) .............. 13
3.2 Percentage Distribution of Persons with Marketable Skills, (1993-94) ........................... 14
3.3 Percentage Distribution of the Unemployed by Marketable Skills, (1999-2000) ............. 15
3.4 Percentage of Population with Skills in the Age Group 15 -29, (2004-05) ........................ 17
3.5 Percentage of Population with Skills in the Age Group 15 -29 by Place of Residence,
(2004-05) ........................................................................................................................ 17
3.6 Skills of Workers (15 - 29 years) by Employment Status & Sector (2004-2005) ............... 19
3.7 Distribution of Population in the Age Group 15-29 across Education & Skill Levels
(2004-2005) .................................................................................................................... 20
3.8 Educational Levels of Usual Principal and Subsidiary Status Workers with Formal
Skills (15-29 years) by Sector (2004-2005) ...................................................................... 21
3.9 Percentage of Persons in the Age Group 15 -29 with Formal Skill in Poverty Groups
(2004-2005) .................................................................................................................... 23
3.10 Percentage of Persons with Skills in the Age Group 15 -29 for each Social Groups
(2004-2005) .................................................................................................................... 24
L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s L i s t o f B o x e s
5.1: Vocational Education in Indian Pl anning ......................................................................... 46
L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s L i s t o f A p p e n d i x T a b l e s
A3.1 Skil l s across the Popul ation (1993-94)............................................................................... 29
A3.2 Skills of Workers (15 - 29 years) across Industries and Sectors (2004-2005) ....................... 30
A3.3 Percentage of Workers Receiving/ Received Formal Vocational Training in Age-Group
15 - 29 Years by Institutions of Training and Sector (2004-2005) .......................................... 31
A3.4 Logit Model: Dependent Variable Vocational Training (Have Training, Formal and
Informal /No Training) ..................................................................................................... 32
A3.5 Occupation of Workers by Education & Skill (2004-2005) : Sector Status ............. 33
A3.6 State-wise Total Labour Force and Increase in Labour Force and Training
Capacity .......................................................................................................................... 36
A5.1 Skill Development Programmes being Organised/Funded by Ministries/Departments of
Central Govt. (Nos.) ......................................................................................................... 69
C o n te n ts
C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . C h a p t e r/ N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o . P a g e N o .
L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s L i s t o f A n n e x u re s
1. Terms of Reference of the Commission.......................................................................... 90
2. Past and Present Composition of the Commission ......................................................... 91
3. Composition of the Advisory Board ................................................................................. 92
4. Composition and the Terms of Reference of the Task Force on Skill Formation in the
Unorganised Sector ..................... 93
5. Summary of Comments by Central Ministries, State Governments, NGOs, Academia
and others on the Draft Report on Skill Formation & Employment Assurance in the
Unorganised sector ........................................................................................................ 96
1
Introduction
1
1.1 The Nat i onal Commi ssi on f or
Enterprises in the Unorganised Sector has been
constituted as an advisory body and a watchdog
for the informal sector. I t has the mandate to
examine the status of the unorganised sector,
analyse the constraints on the growth of the sector,
and make necessary recommendati ons. The
detailed terms of reference and composition of
the Commission as well as its Advisory Board
are given in Annexures 1 to 3 of this report.
1.2 I ndia’s growth achievements during the
economic reform period have been documented
extensively. I n recent years the country grew at
nearly 9 per cent per annum and real national
income grew by 125 per cent during 1992/93 -
2005/ 06 compared to 93 per cent during the
previous period of same duration. While these
achievements are, no doubt, remarkable from a
macroeconomic perspective, this Commission has
documented other aspects of the development
scene in I ndia, viz. the preponderance as well as
the perpetuation of the informal economy. The
Commi ssi on esti mated that the i nformal or
unorganised workers constituted an overwhelming
86 per cent of total workers in 2004-05. Between
1999-2000 and 2004-05 what increased in I ndia
was t he i nformal empl oyment , bot h i n t he
organised as well as the unorganised sectors. More
t han t hree- fi ft hs of t hi s workforce i s sel f-
employed. Of the remaining regular or casual
wage workers, only half are employed i n the
organised sector. Given these trends, the bulk of
employment is likely to be in the unorganised
sector of the economy, at least in the immediate
years to come.
1.3 This Commission has, in its earlier report
(NCEUS 2007), also highlighted the need for
developing the potential and productivity of the
huge workforce, from the point of view of both
the economy as well as the individual. Several
studies and policy documents have highlighted
the acute mismatch between the workforce needs
and the availability of skilled manpower to sustain
the economy’s growth rates. With a very low level
of labour productivity, the need for large numbers
of skilled people is felt more acutely in the context
of the country’s need to compete internationally
in manufacturing as well as services and to emerge
as a significant player in the knowledge economy.
From t he demand si de, whi l e t he economy
experi enci ng rapi d growt h, ski l l short ages
emerged across the board, drawing our urgent
attention to the problem of skill development. One
esti mate i ndi cates the need for a 20 mi lli on
i ncrease i n ski l l ed workers by 2015 (CI I -
McKinsey Report ‘Madein India: thenext big
manufacturing export story’ (October 2004) or
incremental skilling of 1.5 million people every
year.
1.4 The present report of the Commission
brings out various aspects of the need for, and
ways to enlarge the skill base of the economy,
keeping in mind the large size, nature of growth
and dynami cs of t he unorgani sed sect or. I t
highlights the fact that while it is necessary to
i ncrease the number of ski lled people i n the
2
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
economy, the preponderance of the i nformal sector
necessitates a view of the issue different from that of the
organised sector. I n other words, in order to increase the
productivity of more than 9/10ths of I ndia’s workforce
in, the nature of their participation in and linkages with
the economy have to be explicitly kept in mind.
1.5 The role and performance of the existing skill
development and training system have been extensively
reviewed by a number of organizations and a number of
proposals have been made within the governmental system
to strengthen and expand the skill development system
in the country. On August 15, 2007 the Prime Minister
al so announced a four- fol d i ncrease i n the ski l l ed
manpower training capacity of the country as an integral
part of the National Skill Development Mission.
1.6 I n keepi ng wi t h t he urgency of massi vel y
expanding the skill base of the economy, the NCEUS
constituted a Task force in June, 2005 on Skill Formation
in the Unorganised Sector to consider the following
aspects.
• I dentify the characteristics and specificities of
skill formation in the unorganised Sector.
• Revi ew the exi sti ng arrangements for ski l l
formati on i n the unorgani sed sector at the
Central and state levels.
• Examine the adequacy of the training and skill
devel opment component of t he current
programmes of wage employment and self-
empl oyment and recommend measures for
improving their effectiveness.
• Recommend measures for optimally utilizing
the existing infrastructure for training and skill
formati on for addressi ng the needs of the
Unorganised Sector.
• I dentify the unmet as well as emerging demand
for skill sets in an expanding and globalising
economy and devise an institutional framework
to rectify the mismatch between demand and
supply of skills.
• Study the characteristics of urban employment
and under employment and assess the potential
of programmes of skill development as a strategy
of employment generation in urban areas.
• I dentify the best practices in the programmes
of skill formation in the unorganised sector
operat ed by t he government and non-
government organizations.
• Design a National Skill Development I nitiative
for the unorganised sector and suggest a strategy
for its implementation.
1.7 The Task Force included several eminent people
and recei ved many val uabl e suggesti ons whi ch are
incorporated in this report. The Composition and the
terms of reference of the Task Force is given in Annexure-
4. The Draft Report and recommendations were also
discussed with the Commission’s Advisory Board. A
number of comments/suggestions on the draft report were
received which are summarized in Annexure-5
1.8 The report is structured as follows. The present
chapter provides a brief introduction to issues in skill
development in the informal sector and outlines the
methodology of preparing the report . Chapter 2 reviews
the role of knowledge based inputs (i.e. education, skills
and technical education) in promoting growth, especially
in the emerging knowledge economy, by highlighting
the cases where the skills-productivity linkages have been
experienced in developing economies such as in East Asia.
The Commission also lays out a framework for looking
at the issue of skills in the unorganised sector, from the
point of view of those who are part of it.
1.9 A significant aspect of this report is a detailed
skill profile of the I ndian workforce, presented in Chapter
3. The Commission constructed a skill profile of I ndia’s
workforce that encompasses both education as well as
the knowledge acquired, through formal or informal
means, that prepares an individual for a vocation or
occupati on. Thi s profi le bases i tself on i nformati on
regarding the level of marketable skills, both formal and
informal, that are possessed by people in I ndia according
to NSSO surveys and assessments of the number of people
trai ned through the vari ous formal vocati onal ski ll
acquisition programmes. I t attempts to evaluate the level
and kind of skill availability with estimates of the level
and nature of demand for skills in the economy. I t also
looks at the relationship between the level of skills and
educational profile of the workforce and also between
skill availability, education and poverty. I t demonstrates
3
that, on the one hand, a large part of the I ndian workforce
has low educational attainments and lacks even the basic
foundational skills in the form of literacy and numeracy
and on the other, I ndia’s skill base is mostly informal and
thus it is difficult to adapt to the changing market and
technological environments.
1.10 We have present ed t he sal i ent feat ures of
different models of international skill development and
training experiences in Chapter 4, which lays special
emphasi s on i ni ti ati ves that have been seen for the
unorganised sector.
1.11 The existing system of skill development and
trai ni ng i n I ndi a, consi sti ng of a l arge number of
institutions, programmes and initiatives of the Central
and state governments, as well as the private and NGO
sectors, is reviewed in Chapters 5. Through this review,
the aim of the Commission has been to collate a huge
corpus of information collected from diverse sources and
present it under a coherent framework. More crucially it
brings out the key features of the skill development system
in I ndia. I t also aims to locate the possible reasons for
the existing narrow skill base. Our review of the existing
system in I ndia also critically examines the issues raised
by several governmental and international organizations.
1.12 Our focus on the unorganised sector and the
perceived need to view skill development differently, given
the preponderance of this sector in the I ndian economy,
enabled us to lay out a detailed strategy and a set of
recommendat i ons f or revampi ng, expandi ng and
reorienting the existing skill development system in I ndia.
These are presented in the last Chapter of the report. I t
envisions the setting up of a system that lays out clear
guidelines and a coherent organizational framework for
the country as a whole, focused on the decentralized,
representative and need based delivery systems at the local
level. The Commi ssi on beli eves that thi s suggested
structure will be able to address the needs of a growing
economy on the one hand and the huge workforce on
the other.
I n tro d u cti o n
4
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Skill Formation, Productivity
& Growth - Issues in a
Developing Economy
2
2.1 I t is being increasingly argued that one
of the prerequisites to enhancing the quantum and
quality of employment in developing countries is
adequate ski ll formati on and trai ni ng of the
workforce. I n more contemporary experiences of
development, the case that is quoted widely is that
of the countries of East Asia where, beginning
f rom very l ow l evel s of t rai ni ng and ski l l
acquisition, several countries made spectacular
progress in providing these to very large segments
of the workforce. This has also been held up as a
textbook case of extraordinary achievements in
human capital formation. I n turn, the large scale
training and skilling of the workforce is seen to
have contributed substantially to the sustained
economic success of these countries.
2.2 The term ‘skills’ is used to refer to a wide
range of attributes in the literature and to that
extent, there is no clear definition of a skilled
worker. According to the World Employment
Report (1998), the term ‘skill’ ‘skill’ ‘skill’ ‘skill’ ‘skill’ refers to an acquired
and practiced ability or to a qualification needed
to perform a job or certain task competently. I t is
a multidimensional concept as most jobs require
a combination of skills for adequate performance,
ranging from physical abilities to cognitive and
interpersonal skills.
2.3 According to the Planning Commission’s
Committee on I ndia Vision 2020 ski ll ski ll ski ll ski ll ski ll can also be
perceived as the ability to direct human energy
efficiently to achieve desired goals. I t is one of
the attributes that generate knowledge resources,
t he ot hers bei ng t echnol ogy, organi sat i on,
information and education skill. While material
resources are consumed when they are utilised,
knowledge resources increase when shared and
can be stored at negligible cost. (GOI /Planning
Commission 2002b:26).
2.4 I n practical terms, ‘marketable ski ll’ arketable ski ll’ arketable ski ll’ arketable ski ll’ arketable ski ll’ is
commonly understood to refer to any ski ll /
expertise / ability that has market value or has
the potenti al of bei ng uti li sed for generati ng
income/employment. According to the National
Sampl e Survey Organi sat i on (NSSO), any
market abl e ski l l , whet her acqui red t hrough
formal or informal means, irrespective of whether
it is being marketed or not, whether the intention
is to market it or not, is considered skill. I n this
sense, an i nventory of such marketable ski lls
provides information on the kinds of work that
people can do, irrespective of whether it has been
acquired formally or not.
2.5 However, when reference is made to levels
of availability of skilled labour in the context of
economic development, it is processes of formal
skill acquisition and training for employment that
become important. Developing countries tend to
lag behind in making these processes available to
5
t hei r popul at i ons. These processes of formal ski l l
acquisition and training come from general educational
systems and systems of technical and vocational education
and t rai ni ng (TVET) t hat are l i nked t o speci f i c
occupations. They include learning designed to develop
the skills for practising particular occupations, as well as
learning designed to prepare for entry or re-entry into
the world of work in general. TVET includes both initial
vocational training undertaken by young people prior to
entry in to the labour market and continuing vocational
training undertaken by adults whilst in work or during
periods when they are economically inactive. I n other
words, it encompasses both initial skills initial skills initial skills initial skills initial skills development and
various forms of ‘Re- ski lli ng Re- ski lli ng Re- ski lli ng Re- ski lli ng Re- ski lli ng’ and ‘Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’. Up- ski lli ng’.
2.6 Whi l e retai ni ng the practi cal defi ni ti on of
‘marketable skills’ for detailing the skill profile of the
I ndi an workf orce i n t he f ol l owi ng chapt er, t he
Commission recognizes the issue of skill acquisition in
its widest sense, to encompass education, pre-employment
training, on-the-job training, continuous learning and
retraining in the context of the linkages between skills,
productivity and growth.
Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The Rationale for Skill Formation – The
Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link Skills-Productivity-Growth Link
2.7 I n contemporary analyses of systems of skill
development in developing countries, the commonly
raised issues are: 1) Developing effective skill development
and trai ni ng systems i n the i nterest of enhanci ng
productivity and sustaining high rates of growth, 2)
Changi ng ski ll requi rements of economi es that are
witnessing fast changes in the nature of economic activity
and work, 3) Matching skills to markets, 4) Financial
sustainability of different skill formation systems and
finally 5) Role of different agents (firms, private actors
and the government) in delivering skill and training
efficiently and effectively.
2.8 First, it is known that skills development is
i mportant because of i ts contri buti on to enhanci ng
productivity at the individual, industry and also national
levels. Enhanced skills enable individuals to be more
productive and potentially generate higher incomes.
Workforce skills make enterprises more productive and
profitable, and help national economies raise production
and creat e weal t h. Thi s t akes pl ace because of
complementarities that exist between physical capital and
human capital on the one hand and between technology
and human capital on the other. A higher level of skills
which results in a higher level of human capital formation
enables plants and machinery to be used more efficiently,
rai si ng the rate of return on i nvestments. Si mi larly,
wi t hout a ski l l ed workf orce, t he ret urns f rom
technological progress remain low. With the advancement
of technologi es, necessi tati ng a hi gh rate of labour
turnover across industries and occupations, adaptability
is crucial to keeping labour and capital employed and
maintaining competitiveness.
2.9 The case of several countri es i n East Asi a
demonstrates the necessity as well as possibilities in this
area for developing countries. Apart from universalizing
primary education, achieving very high levels of secondary
educati on and also vocati onal educati on wi thi n the
secondary education system, countries such as South
Korea, Singapore and Malaysia have achieved formal
training of the majority of their population as well as
high rates of employment of the trained workforce. A
vast volume of literature on the sources of sustained high
growth in these economies have located this growth in
‘endogenous’ processes that enable a hi ghly ski lled
workforce to adapt technology to country requirements,
innovate at the level of the enterprise and meet ambitious
targets in a short period of time. While many of these
systems were put into place at an early stage of their
contemporary development, with some of these countries
experiencing crisis, they also undertook overhauling of
systems in tune with the needs of a globalised economy.
I n other words, the need for the skill mix to change at
different levels of development and in response to different
degrees of openness was recognized and responded to.
2.10 In contemporary production systems, the demand
for skills has changed to some extent because of extensive
changes that economies have seen as a result of greater
i nt egrat i on wi t h t he worl d economy. I ncreased
competition and the introduction of I CT have prompted
enterprises to make fundamental changes in their internal
organi zati on and work practi ces, necessi tati ng the
existence and acquisition of specific skills in workforces
that are required to be increasingly adaptable and flexible.
I mproved access, uni versal basi c educat i on and
foundations of literacy offer essential first steps on the
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
6
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
path to becoming successful knowledge economies. But
knowledge economies demand not just more education,
but educati on and trai ni ng that are also better and
different. In the context of knowledge economy aspirations,
the challenge of educational and vocational reform is
therefore not just to increaseaccessor even raise conventional
tested achievements, but also to changethenatureand
improvethequality of learning, teaching and training so
that they address knowledge economy objectives.
2.11 Fast changing knowledge economies call for new
core competencies among all learners in the society. At
the heart of these are longstanding “soft skills” such as
communication, collaboration and teamwork. To these,
can be added others such as the ability to create, apply,
share and di st ri but e knowl edge; t o convert t aci t
knowledge into explicit and formally codified knowledge
that is easily transferable to others; to employ effortless
use of advanced information technology; to work in teams
that may be socially and psychologically heterogeneous;
t o have t he capaci t y t o re- ski l l and ret rai n as
ci rcumstances demand; to be able to parti ci pate i n
networks and develop the social capital that creates the
learning and develops the resilience to cope with change;
to cultivate a positive, opportunistic and entrepreneurial
orientation to change; and to become committed to
continuous and lifelong learning far beyond the years of
formal education. This effort to see a change in the skill
mix in fast changing economies has been recognized by
South Korea, whi ch has a Comprehensi ve Plan for
Lifelong Education and Learning, which allows local
communities in provinces to enter and exit the learning
and training process in line with the requirements of the
economy on the one hand and with their own need for
i mprovement. Si mi larl y, Si ngapore has made major
changes in its skill strategy through the introduction of a
National Continuing Education and Training Framework
and a Lifelong Learning Endowment Fund.
2.12 Second, it is well documented in the literature
that skill development is an area where typically markets
mi ght not del i ver opt i mum vol umes of ski l l t hat
economies need. This is because of ‘externalities’ in skill
and training provision, where if a private firm undertakes
skilling of its workers, it might not be able to reap the
benefits sufficiently if the worker leaves the firm. Another
firm, on the other hand, might benefit without bearing
the cost if the worker joins the firm. Even though the
specific industry will benefit if workers are trained for its
speci fi c needs, no parti cular pri vate fi rm mi ght be
interested in providing the skills and training, resulting
in its ‘under – provision’ if it is left entirely to market
forces. While this is an argument that is crucial for any
economy, this is considered to be especially relevant in
small firm contexts. I t is argued that the under-provision
of formal training found in small and microenterprises is
either due to ‘ignorance’ on the part of employers or
‘market failure’ due to a variety of supply and demand
side features such as their short-term perspective which
prevents the recognition of the longer term benefits of
trai ni ng. Therefore, even though there mi ght be an
explicit recognition of the need for skills enhancement,
the issues of who will provide it, where it will be provided,
who wi l l bear the costs and so on become cruci al
considerations.
2.13 Third, while skill development is where public
or collective institutions become necessary due to the
externalities mentioned above, where the basic stimuli
will come from to signal the extent of skill requirements,
i.e., whether it should be demand led or supply led, are
extremely important, particularly when we consider the
fi nanci ng aspect . Exi st i ng syst ems of formal ski l l
provisioning in most developing countries are found to
cover a very small proportion of enterprises and create
large supply- demand mi smatches, resulti ng i n ski ll
short ages even i n t he presence of si gni f i cant
unemployment. I n the context of ‘new’ needs bei ng
perceived in a globalised economy, these skill shortages
are considered to pose a potential hindrance to sustained
economic growth. The issue of matching skills to markets
has led to a call for dismantling existing systems of skill
provisioning in many countries or an overhaul of TVET
systems.
2.14 It is against this background that this report looks
at the overall picture of skill acquisition and development
and its link to employment and markets in the case of the
unorganised or informal sector in I ndia.
Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development – Skill Acquisition and Development –
Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector Specific Case of the Informal Sector
2.15 I n I ndia, the discussion on the impact of existing
skill delivery systems and what needs to be done hinges
7
critically on two major characteristics of the workforce:
the preponderance of employment in the informal sector
of the economy and a very large proportion of youth in
the population, mostly belonging to the informal sector.
I t is also well known that the proportion of people who
have had access to some kind of formal skill acquisition
process is very low and that of those who have acquired
employment as a result of this is even lower. While these
aspects are presented in the next chapter, here we examine
the specific characteristics of informal workforce with
respect to the issues raised above.
2.16 This Commission’s work has highlighted the
salient features of the I ndian workforce and brought out
the structure of the large informal sector and workforce
in I ndia. I n order to be able to focus the discussion on
the skill needs of the informal sector and the workforce
engaged i n i t , we bri efl y present t hese st ruct ural
characteristics here.
2.17 The Commission has estimated that in 2004-
05, total employment (principal plus subsidiary) in the
I ndi an economy was 458 mi l l i on, of whi ch t he
unorganised sector accounted for 395 million, constituting
86 per cent of total workers. The Commission’s estimates
are direct ones from the NSSO, based on a consistent
definition of the unorganised sector (NCEUS 2007). Our
estimates showed that, between 1999-2000 and 2004-
05, of the total incremental employment generated, only
about 14 per cent was absorbed in the organised sector
while 86 per cent was in the unorganised sector. I n the
years to come, as the Eleventh Plan document points
out, the bulk of incremental employment is likely to be
created in the unorganised sector.
2.18 Within this unorganised sector, wage-workers
(i.e. those employed by others), constituted only 36 per
cent of the workers, and the remaining 64 per cent were
self employed.
2.19 While the agricultural sector still contributed
the largest numbers i n the unorgani sed sector, the
proportion of non-agricultural workers rose from 32 per
cent to 36 per cent between 1999-2000 and 2004-05.
Agriculture sector, in turn, is constituted by unorganised
workers who are self-employed (65 per cent) and casual
workers (35 per cent). Even in the non-agriculture sector,
nearly 72 per cent of the workers are in the unorganised
sector, an increase of 4 percentage points from 68 per
cent in 1999-2000. These workers, in turn, are mainly
the self-employed (63 per cent). The rest of the workers
in the non-agriculture unorganised sector are more or
less equally distributed between the regular (17 per cent)
and casual categories (20 per cent).
2.20 I n the same period, employment in the organised
sector of the economy increased by 8.5 million or 16 per
cent (from 54.1 million to 62.6 million), but the change
in organised or formal employment was nil or marginally
negative. Therefore, it was pointed out that theentire
increasein theemployment in theorganised sector over this
period hasbeen informal in naturei.e. without any job or
social security. TheCommission argued that thiscan betermed
asinformalisation of theformal sector, i.e., employment increase
consistsof regular workerswithout social security benefitsand
casual or contract workersagain without thebenefitsthat should
accrueto formal workers.
2.21 Three major structural features of employment
i n t he I ndi an economy were hi ghl i ght ed by t he
Commi ssi on. Fi rst , t he i nformal sect or i s hugel y
preponderant i n the I ndi an economy. Second, the
increases in employment have been of the informal kind.
Thi rd, wi thi n the i nformal sector, there i s a huge
preponderance of self-employed workers. I nformalisation
of the workforce is probably a feature that is here to stay,
making the discussion below especially relevant.
2.22 Another structural feature that the Commission’s
work has highlighted is the heterogeneity of the informal
sector i tself. I t analysed i n detai l the i nci dence and
conditions of different types of informal workers, i.e.,
wage workers in the unorganised sector, self-employed
workers in the unorganised sector and unprotected wage
workers in the organised sector. Within the category of
the self employed, there are different categories such as
persons who operate farm or non-farm enterprises or
engaged in a profession or trade, either on own account,
individually or with partners, or home-based workers
which include unpaid family workers also. The former
has been referred to as independent self employed workers
and the latter as dependent. The Commission estimated
that within the 395 million people that constituted the
unorganised sector in 2004-05, about 344 million were
self- employed, of which 69 million were in the non-
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
8
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
agricultural sector. As a special category in terms of poor
conditions of work and high levels of vulnerability, home-
workers were estimated at nearly 8.2 million workers
(or 12 per cent of the non-agricultural self employed
workers) of whom about 4.8 million were women.
2.23 What this highly heterogeneous picture of the
informal sector points towards is the fact that the nature
and conditions of work in the informal sector are very
different, and, therefore, lead to a wide range of training
needs, requiring analysis that is different from that of the
formal sector. Different kinds of workers in the informal
sector are employed in production units with widely
di fferi ng features and i n a wi de range of economi c
activities. They consist of different kinds of people (i.e.
workers, producers, employers) in service activities or
producing under varying types of employment relations
and production arrangements. The basic questions of skill-
building and training for whom, for what, what kind of
training and how it can be best provided have somewhat
different dimensions given this diversity in the informal
sector. The Commission wishes to lay stress on this aspect,
something that has been relatively neglected in the vast
literature on existing skill development systems in I ndia.
2.24 I n the international literature on training needs
and possibilities in the informal sector of developing
countries, several sets of issues have been identified. The
first relates to motivations of the people in the informal
sector for training. Those working in the informal sector
often see little need for further skills acquisition and have
little knowledge about where to go even after the skills
are acquired. This is true even for enterprises in the
informal sector, often dismissed as ‘ignorance’ on the part
of enterprise owners as well as workers. The principal
problems of poor literacy and numeracy often prevent
informal sector workers from participating successfully
in conventional training programmes, even if they perceive
the need. Training can also be prohibitive in terms of
costs. Even token fees for the training can form a real
barrier for participating in training. Working hours are
often long and any time off from the productive work
means loss of income, which affects the willingness to
participate in a training programme, even if it is relevant
and easily available. I t is also unlikely that informal sector
entrepreneurs will provide their workers time off for
training. I n fact, skilling workers may appear threatening
for the entrepreneurs because skilled and trained workers
may demand higher pay, leave to work for competitors
or establish enterprises themselves. The motivation issue,
therefore, has to be kept in mind when designing training
programmes for the informal sector.
2.25 The second set of issues relates to who require
training and for what. Broadly, we can distinguish between
own- account workers, workers i n ent erpri ses and
entrepreneurs. I n the informal sector, apart from the
training needs of workers of different kinds, which might
be essential for increased productivity, most of those who
fall under the category of entrepreneurs may themselves
need training and face the same kinds of motivational
problems as those already mentioned above. I t has often
been argued t hat non- speci al i zat i on (avoi di ng
concentrating on a single trade) is the most commendable
strategy for those who exist on the broad “underside” of
the labour hierarchy and education and training need to
be able to cater to them because, very often, survival
requires constant search for new sources of income and
the will and ability to be as flexible as possible. I n the
context of self- help organizations and networks, such
training would imply that learning is not only generated
in the process of production, but also takes place through
ot her ext ernal mechani sms such as `l earni ng by
negotiating’ and `searching for openings’. Learning would
imply a process of becoming aware of the potential of a
network or cluster of enterprises to solve problems, and
acqui ri ng t hose compet enci es t hat are needed t o
implement solutions. Additionally, the training would need
to build up capabilities to shift from one profession to
another, to obtain the freedom to make choices without
losing status.
2.26 Third, the requirements in the informal sector
in a range of activities or in micro-enterprise based
production are a combination of ‘social competencies’ and
technical skills that might be industry or trade based.
Social competency, defined as ‘the ability to co-operate,
communicate and represent collective interests’ is central
to conducting a business as much as the technical aspects
of the industry itself. All training programmes for such
enterprises have to necessarily also develop literacy and
cognitive competencies, as they facilitate the organisation
of economi c act i vi t i es and are used t o devel op
communi cat i ve ski l l s. Furt her, even wi t hi n smal l
9
enterpri se based entrepreneurshi p, two di sti ncti ve
categories are ‘survivalist’ entrepreneurs, lacking even basic
literacy and women entrepreneurs who, in addition to
most often lacking basic literacy and numeracy, face
specific problem of mismatch between home duties and
training. Training would involve, for all sets of people, a
combination of ‘social competencies’ and technical skills
and at different levels. For example, in many categories, a
range of skills that enable mere survival or the ability to
shift professions are essential as argued above. Systems
of skill development, keeping informal sector workers in
mind, would need to provide the whole range of these
skills, from basic literacy and numeracy to technical
training. This, in turn, is unlikely to be taken up by the
private sector, as the workers concerned are at the bottom
rung in the production hierarchy and encounter the worst
terms of trade. I n such cases, directed skill programmes
may be focusing on a group approach and can not only
enhance their productivity but also enable them to bargain
for better terms.
2.27 Underlying all the issues raised above, however,
especiall y in the case of the informal sector, is a basic
questi on: do the ski l l s that are percei ved or found
necessary in the informal sector have to be ‘formally’
provi ded? I n other words, should ski ll development
programmes for all these sets of workers be subject to
processes of trainer accreditation and trainee certification?
Should these be done at a centralized, nation-wide or
state-wide level or should it be decentralized?I s the mode
of working of the existing systems of informal on the job
ski l l acqui si t i on t hrough t he t radi t i onal met hods
sufficient?Apart from recognizing the heterogeneity of
the informal sector, an understanding of the role that
different segments of the sector play in the economic
process is crucial to be able to provide an answer to this.
This report puts forward concrete recommendations that
deal with the centralization-decentralization issue as well
as the formal certification versus informal provision, but
here we flag off the analytical issues that are important
in this discussion.
2.28 The previous section outlined the rationale for
skill development in general and noted that it has been
known to enhance productivity at the individual, industry
and national levels. However, in the case of I ndia, the
results of studi es that exami ne thi s relati onshi p are
ambiguous. This ambiguity notwithstanding, there are
some reasons why one might argue that formal skill
acquisition in the informal sector, whether it is through
general education, vocational education or work-place
related skill acquisition with certification, can lead to
enhanced product i vi t y. Fi rst , t he i nf ormal sect or
contributes substantially to national output in I ndia and
the organizational structures of the informal sector are
very important in determining the structure of national
output. I n a situation where production technologies are
changing very rapidly in both the manufacturing and
service sectors, entrepreneurs and workers are very often
required to adapt to changes and also acquire new skills.
With changing technologies, the ability to cope with
change is given by the skill base of the economy which
has to expand, permitting increase in productivity across
the board. Strengthening and widening of the education
system as well as provision of skills to be able to adapt
and change production systems or switch jobs become
essential even for informal sector entrepreneurs and
workers. For example, in a range of industries and services
that use I CT, it might be broad based computer skills,
communication and cognitive skills and knowledge of
English that might be needed to access the labour market
or even continue to undertake production in specific
industries. Although the level at which skills have to be
i mparted mi ght not be very advanced, certi fi cati on
becomes very essential in order to ensure minimum levels
of skill that have the potential to enhance productivity.
2.29 Second, while the informal sector contributes
substantially to national output, the heterogeneity of the
sector results in a large range of vintages of technology
used and products produced. Even across different market
and consumer segments, qual i ty standardi zati on i s
essential to ensure effective marketing of the products of
the sector and upgradation of skills is essential, along
with other inputs, to achieving standardization. The
viability of large parts of the informal economy might
itself be contingent on the existence and provision of
formal, standardised skills.
2.30 Together, the above two aspects suggest that for
many in the informal sector, the acquisition of formal
skills might be a necessary condition to gain entry into
segments of the labour market that can potentially generate
greater income or to be part of viable production systems
S k i ll F o rm a ti o n , P ro d u cti vi ty a n d G ro wth - I ssu e s i n a D e ve lo p i n g E co n o m y
10
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
that can potentiall y result in better livelihoods. The
Commission’s analysis in the rest of this report strongly
suggests that the formal systems of skill imparting are
essential for the informal sector.
2.31 I t is reasonably well established that in I ndia,
formal skill acquisition, through VET systems, has been
hardly successful in helping those in the informal sector
to get jobs, even at the very low levels at which they have
been provided.
2.32 Literature looking into the reasons for low levels
of skill formation in developing countries, identify the
state run vocational education and training systems as
being too supply driven and far-removed from market
demand. I t is suggested that they should be responding
to market demand with a greater role for the private sector
and for enterprises. There is an assumption here that by
vi rtue of thei r cl oser contact wi th the market, an
employer-operated training could be more efficient with
pri vate fi rms and smal l enterpri ses at thei r centre,
coordinated through business associations and other such
intermediary institutions. To use existing patterns of
market demand alone to signal what the training needs
of the economy are and also determine the outcomes of
training initiatives will, however, bypass most members
in the informal sector. The extent and quality of training
is constrained by the nature of the economy and level of
enterprise development. The largest part of the informal
sector consi sts of workers/ enterpri ses where pri vate
i ni ti ati ve woul d not be forthcomi ng for ski l l s up-
gradation, as they are either out of the loop vis-à-vis the
formal sector or are involved in ways that provide the
cushion against adversity for the formal sector. I n these
cases, leaving them as they are, forming the base of the
low cost economy, will serve the needs of the organised
sector best. Further, even if private actors perceive the
need for training, they might be too small in size to garner
resources to provide/undertake training.
2.33 There is scope for upgradation in a range of
informal sector activities where existing markets will not
generate conditions conducive for training. These markets
can be tapped only once the interventions have been made,
requiring the active participation of public agencies. I n a
sense, therefore, a distinction has to be made between
existing patterns of demand and potential demand which
does not get expressed or is even perceived as existing. I n
fact, thi s t ypi cal l y exi sts i n servi ces l i ke cl eani ng,
housemaids and so on which are often considered low
quality, low productivity work.
2.34 Despite all their weaknesses, we stress strongly
that there is a need for public technical and vocational
education establishments or other forms of collective
organizations to play a definite role in finding new ways
of teaching and learning to make them more relevant to
the informal sector’s needs. Given the large numerical
presence of such self-employed workers, as has been
pointed out earlier, this point is especially relevant.
11
Skill Profile of the Indian
Workforce
3
3.1 This chapter looks at the overall picture
of ski l l acqui si ti on and devel opment of the
unorganised or informal sector in I ndia. I n this
report, , , , , we have used different measures of skill.
The first is the level of education of the individual
and the second being the extent of vocational
training. Vocational training is broadly defined
as training that prepares an individual for a specific
vocation or occupation. The main objective of
vocational education and training is to prepare
persons, especially the youth, for the world of work
and make them employable for a broad range of
occupati ons i n vari ous i ndustri es and other
economic sectors. VET aims at imparting training
to persons in specific fields through providing
si gni fi cant ‘hands on’ experience in acquiring
necessary skills, which make them employable
or creat e f or t hem opport uni t i es of sel f -
employment. Vocational training may be non-
formal or formal . Si nce acqui si ti on of ski l l s
through non-formal training is, by definition
unstructured and since it is difficult to have a clear
definition of skills, it is very likely the case that
t he surveys on whi ch our anal ysi s i s based
underesti mate the extent of non-formal ski ll
acquisition, especially in certain sectors such as
agriculture. This caveat should be borne in mind
while using the results shown below.
3.2 There has been no special effort on the
part of the government to collect data on skills
regularly as part of the administrative process. The
main source of data at the national level is the
Directorate General of Employment and Training
(DGE&T), Ministry of Labour. The other sources
of data on skills are the recent ad hoc surveys of
t he Nat i onal Sampl e Survey Organi zat i on
(NSSO). The NSSO has asked questions relating
to possession of skills in surveys of 1993-94, 1999-
2000 and 2004-05. Each survey had a different
scope, but taken together they give us some idea
of the skill profile of the population.
3.3 This chapter bases itself on information
regarding the level of marketable skills, both
formal and informal, that are possessed by people
i n I ndi a accordi ng t o NSSO surveys and
assessments of number of people trained through
the various formal vocational skill acquisition
programmes. I t attempts to evaluate the level and
type of skill availability with estimates of the level
and nature of demand for skills in the economy. I t
also looks at the relationship between the level of
skills and educational profile of the workforce and
between skill availability, education and poverty.
Foundational Requirements: Literacy,
Numeracy, Education
3.4 Educat i on may be t reat ed as t he
foundation for acquiring formal skills and also as
creating generic skills. Education prepares a person
to acquire different types of skills and higher forms
of cogni ti ve ski lls may requi re hi gh levels of
educati on. Thus, general educati on i s hi ghl y
12
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
important in itself. However, we do not see general
education as a substitute for skill acquisition since the
latter prepares people to carry out specific tasks. I t is,
however, important to recognize the complementary
relationship between different levels of education and
different types of skills. I n other words, some level of
education may be seen as foundation for acquiring a
specific type of skill. In order to emphasize on skill training
it is important to have an idea whether the people have
the basic foundation in terms of literacy and numeracy as
well as absorptive capacity in terms of a particular level
of education for a specific type of formal training. Thus,
level of educational attainment of the population tells us
about the generic and foundational skills residing in a
population.
3.5 I n 2004-2005 the share of population of 15 years
and above who were illiterate or below primary education
comprised 47 per cent (Table 3.1). This share was higher
among women (58 per cent) and in rural areas. While
13 per cent of population had primary education 16 per
Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
T a b le 3 . 1 : E d u ca tio n a l Atta in m e n t o f P e rso n s (2 0 0 4 -2 0 0 5 )
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban T TT TTotal otal otal otal otal
Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
15 and Abo 15 and Abo 15 and Abo 15 and Abo 15 and Abov vv vve e e e e Y YY YYears ears ears ears ears
I lliterate &
Below Primary 44.5 67.7 56.0 19.7 35.6 27.1 36.7 58.3 47.2
Primary 15.3 10.8 13.1 12.6 12.1 12.3 14.4 11.2 12.8
Middle 19.1 11.3 15.3 19.4 16.8 18.2 19.2 12.9 16.2
Secondary &
Above 21.1 10.2 15.7 48.3 35.6 42.3 29.7 17.6 23.8
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
15 -2 9 15 -2 9 15 -2 9 15 -2 9 15 -2 9 Y YY YYears ears ears ears ears
I lliterate &
Below Primary 27.8 47.7 37.6 13.7 20.1 16.6 23.2 39.6 31.0
Primary &
Middle 43.9 33.8 38.9 37.6 33.2 35.6 41.8 33.6 37.9
Secondary 15.4 10.3 12.9 19.1 17.7 18.5 16.6 12.5 14.6
HS & Above 12.9 8.1 10.6 29.6 29.0 29.3 18.4 14.3 16.4
Technical 1.7 1.0 1.4 6.7 4.4 5.7 3.4 2.0 2.7
T TT TTotal otal otal otal otal 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
cent had middle level of education. The share of educated
persons i.e. those with secondary and above was higher
at 24 per cent. The share of educated persons is higher
as expected among men and in urban areas.
3.6 One can expect a certain pace of cohort-wise
i mprovement , but even among t he 15 - 29 years
population, in 2004-05, educational attainment was still
quite low with 31 per cent of them having below primary
level of education and 38 per cent population with primary
or middle level education only (Table 3.1). There is
some improvement over the years. I n 1993-94, in the
age group 15-29 years, the share of persons educated up
to below primary was 45.2 per cent while 32 per cent
had passed primary or middle classes.
Workforce and Educational Attainments
3.7 The Commission has, in its 2007 Report on
Working Conditions, analysed the educational status of
workers in the organised and unorganised sectors, formally
and informally employed workers, by social and gender
13
status etc. The educati onal status of workers i n the
organised and unorganised sector of the economy is given
i n Fi g 3.1. The Commi ssi on, i n the above report ,
expressed the view that low levels of education and skills
are one of the primary reasons leading to a hierarchy of
work relationships, segmentation of the workforce and
vulnerabi li ty. Improving theaccess of all sections of the
population to quality education at least up to thesecondary
level must thereforebehighlighted asoneof themot urgent
developmental requirements.
Skill Base of Population in 1993-1994
3.8 The National Sample Survey on Employment
and Unemployment, 50th Round, 1993-94 canvassed a
separate question on skill along with the questions on
education and technical education. The question on skill
involved asking the respondents to choose from a given
list of 31 skills types including an option ‘No skill’ and a
F ig . 3 . 1 : E d u catio n al Attain m e n t o f Wo rk e rs Ag e d 1 5 & Ab o ve b y S e cto rs, (2 0 0 4 -2 0 0 5 )
Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
miscellaneous category of ‘Others’.
1
.The above question
enabled a categorisation of the population into those with
skills and those without. On the other hand, it enabled
analysis of the distribution of the population among select
skill types and identified the predominant skills. Besides
as it pertained to the entire population the skill of all
segments of the population could be ascertained. However,
the question on skill had two limitations. Firstly, it limited
the skills to be chosen from a select 30 categories, leaving
no scope for individuals to specify skills outside the given
list, leaving them with no option other than to classify
themselves with ‘others’. Secondly, the skills asked in
the 50th round were more in line with traditional skill
set, barring certain exceptions. The skill set associated
with the newer trades were not adequately represented.
The survey did canvass a separate question on technical/
vocational education leading to certificates, diplomas or
1
The various skills included in the list were Stenographer; machineman; fitter, die-maker; electrician; repair of electronic goods;
motor vehicle driver; fisherman; miner, quarryman; spinner including charkha operator; weaver; tailor, cutter; carpenter; mason;
bricklayer; shoemaker, cobbler; moulder; blacksmith; goldsmith; silversmith; boatman; potter; nurse, midwife; basket maker,
wick product maker; toy maker; brick maker; tile maker; bidi maker; book-binder; barber; mud-house builder & thatcher and
Others.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
14
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
degrees which could be used to glean information on
upper end skill acquisition.
3.9 Analysis of this data reveals that nearly 90 per
cent of the total population did not have any skills.
Approximately 10 per cent of population reported as
having skills (91.2 million). The proportion of skilled
workers in the workforce was very low (Fig 3.2). I n
rural areas, only about 10 per cent of the men (34.2
million) and 6.3 per cent of the women (20.3 million)
possessed specific marketable (formal or non-formal)
skills. The percentages are reported higher in urban areas,
but still very low — only 19.6 per cent for men (24.3
million) and 11.2 per cent for women (12.4 million).
However, as discussed earlier, these only refer to the lower
level skills and not the skills of professional and more
qualified workers.
3.10 Among t he popul at i on wi t h ski l l s, t he
predominant group was tailors (17.1 per cent), followed
by weavers (8.2 per cent). Other skills with share above
5 per cent were motor vehicle drivers, stenographers and
bidi makers (Appendix Table A 3.1). Some other skills
with a relatively high share of more than 2 per cent of
the total were: carpenters, masons, mud house builders/
thatchers, fisher men and basket/wick product makers.
3.11 For purpose of analysis the skills reported in the
50th round have been classified by us into predominantly
f ormal and predomi nant l y i nf ormal . The general
educational attainment levels of the persons with skills
F ig . 3 . 2 : P e rce n tag e D istrib u tio n o f P e rso n s with M ark e tab le S k ills, (1 9 9 3 -9 4 )
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
was examined and taken as a guideline to classify the
skills. The distribution of the population was explored to
determine the educational levels. The skil ls wherein
majority of population were illiterate & below primary
educated and primary & middle educated, while low share
of population were educated at secondary and above level
were considered as skills which were predominantly
informal. The skills wherein a substantial proportion of
population had even secondary and higher education were
classified as predominantly formal. The only exception
was nurses and mi dwi ves whi ch was cl assi fi ed as
predominantly informal for rural and predominantly
formal in urban areas.
3.12 Based on the above analysis the skills considered
predominantly informal are: fisherman; miner, quarryman;
spinner including charkha operator; weaver; tailor, cutter;
carpent er; mason; bri ckl ayer; shoemaker, cobbl er;
moulder; blacksmith; goldsmith; silversmith; boatman;
potter; midwife (rural); basket maker, wick product maker;
toy maker; brick maker; tile maker; bidi maker; book-
bi nder; barber; mud- house bui lder & thatcher and
Others. Ski lls consi dered predominantly formal are:
Stenographer; machine man; fitter, die-maker; electrician;
repair of electronic goods; motor vehicle driver and
midwife (urban). According to our categorization, in
1993-94, approximately 2 per cent of the population had
predominantly formal skills, while 8.2 per cent of the
popul ati on had predomi nantl y i nformal ski ll s. The
15
corresponding shares among the labour force were 4.2
and 15.3 per cent. (Table 3.2)
Skill Base of Unemployed 1999-2000
3.13 The NSSO Sur vey on Empl oyment and
Unemployment (1999-2000) had sought information on
the skill levels of the unemployed only. The results showed
that i n rural areas, onl y 16.4 per cent of the mal e
unempl oyed workers and 18.8 per cent of femal e
unemployed workers possessed specific marketable skills
(Fig. 3.3). The percentage of males unemployed in urban
areas was almost identical to that of rural areas. However,
a significantly higher proportion of about 32 per cent of
the female unemployed workers in the urban areas are
reported to possess some skills. Among the rural male
unemployed, 17 per cent possessed skills of stenographer,
12 per cent of drivers (vehicle or tractor), 9 per cent of
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
T ab le 3 . 2 : S k ills o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 , (1 9 9 3 -9 4 )
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban T TT TTotal otal otal otal otal
Ski ll Ski ll Ski ll Ski ll Ski ll Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
Formal 3.9 0.5 2.2 9.7 2.7 6.4 5.6 1.1 3.4
I nformal 10.6 10.7 10.7 16.3 15.0 15.7 12.3 11.9 12.1
No Skill 85.5 88.8 87.1 74.0 82.3 77.9 82.1 87.0 84.5
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
F ig . 3 . 3 : P e rce n tag e D istrib u tio n o f th e U n e m p lo ye d b y M ark e tab le S k ill, (1 9 9 9 -2 0 0 0 )
mechanic and 8 per cent of electricians. Of the female
unemployed in rural areas, 37 per cent possessed tailoring/
cut t i ng ski l l s whi l e 22 per cent coul d work as
stenographers. Among the urban unemployed males, 18
per cent could work as stenographers, 9 per cent as
mechanics, 8 per cent as electricians and 7 per cent as
drivers. Of the females unemployed in urban areas, 30
per cent could work as stenographers and 22 per cent as
tailors. More than 5 per cent of each of the four categories
of unempl oyed had computer programmi ng ski l l s.
However, on the whole more than 18 per cent of the
unemployed possessed marketable skills.
Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005 Skills among the Youth in 2004-2005
3.14 The NSS round 2004-05 collected information
about the skill profile of the youth (15-29 years), with
S SS SSour our our our ource: ce: ce: ce: ce: Computed from NSS 55th Round, 1999-2000, Employment-Unemployment Survey.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
16
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
enquiries as to whether the respondents had or were
undergoing formal or non-formal training. Non-formal
training includes both hereditary and other training.
When the expertise acquired enabled him/her to carry
out the trade or occupati on of thei r ancestors over
generations, it was considered a ‘hereditary’ source. Any
other ‘non-formal’ vocational training received from other
than the household members to pursue a vocation, whether
hereditary or not, was considered ‘other’ sources. Formal
vocational training is the training that took place in
educational and training institutions which followed a
structured training programme and led to recognized
certi fi cates, di plomas or degrees. Formal vocati onal
training had the following characteristics: (i) Structured
training programme towards a particular skill, and (ii)
Certificate / diploma / degree received had recognition
by accreditation agencies..
3.15 The 15-29 years age-group comprised 27 per
cent of the total population of 1089 million as on 1st
January, 2005 which is marginally lower than in 1993-
94. I t is estimated that on the whole, only 11.5 per cent
of those in this age-group 15-29 have received (or were
receiving) any training, whether formal or informal. Of
those with informal or formal skill training, 33 per cent
2
I n 1993-94, approximately 3.4 per cent of persons in the age group of 15-29 years had predominantly formal skills while 12
per cent of population had predominantly informal skills (Table 3.2). These cannot be strictly compared with 2004-2005 as the
criteria of skill are different.
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
T ab le 3 . 3 : S k ill L e ve ls o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 in 2 0 0 4 -0 5 (in m illio n s)
Rural Rural Rural Rural Rural Urban Urban Urban Urban Urban Rural + Urban Rural + Urban Rural + Urban Rural + Urban Rural + Urban
Skill Skill Skill Skill Skill Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
Receiving formal
training 1.1 0.5 1.5 1.7 0.8 2.4 2.7 1.2 3.9
Received formal
training 1.5 1.2 2.7 2.6 1.8 4.4 4.1 3.1 7.1
F FF FFor or or or ormal mal mal mal mal 2.6 1.7 4.3 4.2 2.6 6.8 6.8 4.3 11.1
Hereditary 5.9 3.1 9.0 1.5 0.7 2.2 7.4 3.8 11.2
Others 3.8 2.9 6.7 3.0 1.3 4.3 6.8 4.3 11.0
I nformal I nformal I nformal I nformal I nformal 9.6 6.1 15.7 4.6 2.0 6.6 14.2 8.1 22.3
No training 88.3 88.9 177.3 40.4 36.1 76.5 128.7 125.0 253.7
T TT TTotal otal otal otal otal 101.4 101.4 101.4 101.4 101.4 97.7 97.7 97.7 97.7 97.7 199.1 199.1 199.1 199.1 199.1 49.4 49.4 49.4 49.4 49.4 41.0 41.0 41.0 41.0 41.0 90.4 90.4 90.4 90.4 90.4 150.8 150.8 150.8 150.8 150.8 138.7 138.7 138.7 138.7 138.7 289.5 289.5 289.5 289.5 289.5
have received or were receiving formal training accounting
for 11 million (Table 3.3). A total of 3.9 million persons
in this age group (about 1 per cent of the total) were
receiving formal vocational training while about 2 per
cent received formal vocational training, constituting about
3.8 per cent of the population with formal training (Fig.
3.4).
3.16 Gender differences in skill training are quite
significant among the trained, both the informally and
the formally. A lower proportion of women (8.9 per cent)
than men (13.9 per cent) in both the rural and urban
areas received vocational training (formal and informal)
(Fig. 3.5). Formal skills were confined to 3.1 per cent
women in this age group, compared to 4.5 per cent men.
About 5.8 per cent women had informally acquired the
skills compared to 9.4 per cent men. (Fig. 3.4).
2
3.17 Urban/rural location provides another element
of difference. While only 2.1 per cent of the youth
population had acquired (or was acquiring) formal skill
training in rural areas, this proportion was much higher
at 7.6 per cent in urban areas. This difference, however,
does not persist with respect to informal skill acquisition
(which is in fact somewhat higher at 7.9 per cent of the
17
F ig . 3 . 4 : P e rce n tag e o f P o p u latio n with S k ills in th e Ag e G ro u p 1 5 -2 9 , (2 0 0 4 -0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
F ig . 3 . 5 : P e rce n tag e o f P o p u latio n with S k ills in th e Ag e G ro u p 1 5 -2 9 b y P lace o f R e sid e n ce , (2 0 0 4 -0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
youth in rural areas, compared to 7.3 per cent in urban
areas).
3.18 Across the states as well, the pattern of skill
acquisition varies very significantly. We have focused
(Table 3.4) on formal skill acquisition. The largest share
of youth with formal skills was in Kerala (15.5 per cent),
followed by Maharashtra (8.3 per cent), Tamil Nadu
(7.6 per cent), Himachal (5.60 per cent) and Gujarat
(4.7 per cent). The lowest incidence of formal training
was in Bihar (0.5 per cent). Among those trained or
undergoing formal training, Maharashtra accounted for
21.7 per cent. Kerala and Tamil Nadu had more than 10
per cent share in the skilled youth with formal skills.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
18
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Gujarat and Andhra Pradesh too have a relatively higher
share of skilled population in 15–29 age groups. Thus,
the southern and western states form a continuous zone
wherein the share of population with formal skills is
relatively high. Together the six states accounted for 63
per cent of the formally trained people. These are primarily
the states which have more industries, higher levels of
educat i on, and a hi gher avai l abi l i t y of t rai ni ng
infrastructure and training capacity both in the public
and private sectors.
Formal Training in Unorganised & Organised
Sectors
3.19 I n I ndia, the discussion on the impact of existing
skill delivery systems and what needs to be done hinges
critically on the characteristics of the workforce, an
overwhelming proportion of whom is employed in the
informal sector of the economy. The estimates of formal/
organised and informal/unorganised sector workers as
per 55
th
and 61
st
Rounds NSSO Surveys show that more
t han 86 per cent of t he empl oyment was i n t he
unorganised sector. The Commission has estimated that
135 million workers in the unorganized sector were in
the age group 15-29. Among the 5.4 million workers
who received formal training in this age group, 3.4 million
workers, (63 per cent of the total trained people) belonged
to the unorganised sector. This shows that the organised
sector, for one or the other reason, is unable to absorb a
majority of the formally trained youth who find a place
in the unorganised sector. Given the characteristics of
the formally trained at this point of time, these persons
undoubtedly form an upper segment of the unorganised
workforce.
3.20 Among the informally trained, 17 million were
in the unorganised sector, compared to 1.9 million in the
organised sector. As a percentage of the workforce, only
2.5 per cent of the total unorganised sector workers had
formal training while 12.5 per cent had non-formal
training. I n the organised sector, 11 per cent workers
had formal training and another 10.4 per cent had informal
training (Table 3.5). I t appears that a range of formal
skills can be absorbed both in the upper segment of the
Source: Source: Source: Source: Source: Computed from unit level data, NSS 61st Round, 2004 -
2005, Employment-Unemployment Survey, adjusted for population.
T ab le 3 . 5 : P e rce n tag e o f Wo rk e rs in Ag e -g ro u p
1 5 - 2 9 Ye ars b y Vo catio n al T rain in g S tatu s
(2 0 0 4 -2 0 0 5 )
Usual Status Usual Status Usual Status Usual Status Usual Status F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal
Male Male Male Male Male
Unorganised 2.6 12.9 15.4 (86.9)
Organised 10.1 10.7 20.8 (13.1)
Total 3.6 12.6 16.1
Female Female Female Female Female
Unorganised 2.3 11.7 14.03 (91.5)
Organised 14.2 9.4 23.61 (8.5)
Total 3.3 11.5 14.84
Persons Persons Persons Persons Persons
Unorganised 2.5 12.5 15.0 (88.4)
Organised 11.0 10.4 21.4 (11.6)
T TT TTotal otal otal otal otal 3.5 3.5 3.5 3.5 3.5 12.2 12.2 12.2 12.2 12.2 15.7 15.7 15.7 15.7 15.7
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round
2004 - 2005, Employment-Unemployment Survey.
T ab le 3 . 4 : P e rce n tag e o f P e rso n s in
Ag e -g ro u p 1 5 - 2 9 Ye ars with F o rm al T rain in g
am o n g th e S tate s, (2 0 0 4 -2 0 0 5 )
State State State State State Statewise distribution Statewise distribution Statewise distribution Statewise distribution Statewise distribution Percentage of Persons Percentage of Persons Percentage of Persons Percentage of Persons Percentage of Persons
of Persons with of Persons with of Persons with of Persons with of Persons with with F with F with F with F with For or or or ormal mal mal mal mal
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining aining aining aining aining T TT TTr rr rraining to aining to aining to aining to aining to T TT TTotal S otal S otal S otal S otal State tate tate tate tate
(Per cent) (Per cent) (Per cent) (Per cent) (Per cent) Population Population Population Population Population
J&K 0.4 2.0
Himachal
Pradesh 1.0 5.6
Punjab 2.8 4.1
Uttaranchal 0.8 3.9
Haryana 2.8 4.5
Delhi 1.7 4.1
Rajasthan 2.5 1.7
Uttar Pradesh 6.9 1.7
Bihar 0.8 0.5
Assam 0.8 1.4
West Bengal 6.9 3.2
Jharkhand 0.8 1.3
Orissa 1.9 1.9
Chhatisgarh 2.0 3.5
Madhya Pradesh 3.4 2.2
Gujarat 6.6 4.7
Maharashtra 21.7 8.3
Andhra Pradesh 6.6 3.2
Karnataka 4.6 3.1
Kerala 12.2 15.5
Tamil Nadu 11.3 7.6
North-east 0.4 1.3
Union Territories 1.3 12.6
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 3.9 3.9 3.9 3.9 3.9
19
unorganised sector as well as the organised sectors, and
due to reasons of employment, a majority of such workers
are absorbed in the unorganised sector. Later in this
chapter we identify the characteristics and spread of skilled
workers across the organised and unorganised sectors.
3.21 Among the youth in the age group 15 to 29
years about 53 per cent were workers, 3 per cent were
unemployed, 20 per cent attended educational institutions
and 24 per cent were non-workers. While 11.5 per cent
of all youth received vocational training, about 17 per
cent of the unemployed and 16 per cent of the workers
did so. About 22 per cent of the regular workers and 16
per cent of the self employed received training (Fig 3.6).
Across employment status, formal training is the highest
among regular workers, followed by the self-employed,
and lowest among the casually employed. Non-formal
training is, however, the highest among the self-employed
followed by the regularly employed and then the casually
employed. I t is noteworthy that the difference in informal
training status across activity status is much smaller than
formal training status.
3.22 This pattern replicates itself across both the
unorganised and organised sectors, though the level of
formal as wel l as overal l trai ni ng i s hi gher i n the
organised sector.
3.23 The share of those with formal skills across
industrial categories also indicates that there are certain
industries, in both the unorganised and organised sectors,
F ig . 3 . 6 : S k ills o f Wo rk e rs (1 5 - 2 9 ye ars) b y E m p lo ym e n t S tatu s & S e cto r (2 0 0 4 -2 0 0 5 )
SE= Self-employed; RW = Regular Workers; CW = Casual Workers
Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
which absorb more formal training. This is evident by
the fact that the share of workers with formal skills is
higher in Health & Social Work, Real Estate, Finance,
Education and Public Administration (Appendix Table
A 3.2). I t is however interesting to note that the shares
of the formally trained in a few sectors such as education,
public administration and construction are estimated as
being higher in the unorganised sector. Although formal
skills are more prevalent in the organised manufacturing
sector, workers with any skill are more prevalent in the
unorganised sector. The analysis also shows that the share
of those with formal skills is negligible in several sectors
i ncl udi ng agri cul ture and pri vate househol ds wi th
employed persons.
3.24 I ndustries in which formal skills are low but
the percentage of workforce with any skills is quite high,
such as manufacturing, construction, trade, hotels, and
community and personal services are clearly those where
there is prima facierequirement of developing expanded
formal training systems.
Education & Skill Acquisition
3.25 I f education is examined in conjunction with
training, a pattern emerges. Non-formal training is higher
among those wi th lower levels of educati on (up to
middle) and declines thereafter. But the proportion of
formally trained persons is higher among the higher
educated youth. The incidence of formal skill training
was only about 0.2 per cent among the illiterate youth.
S k ill P ro file o f th e I n d ia n Wo rk fo rce
20
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
This rises to 17.5 per cent in the case of those with
graduate and above formal educati on. (Tabl e 3.6).
Difference by gender in this pattern is not high, though
men at all levels of education tend to have a higher
incidence of training.
S SS SSour our our our ource: ce: ce: ce: ce: Source: Computed from unit level data, NSS 61st Round, 2004 - 2005, Employment Unemployment Survey, adjusted for
population.
T ab le 3 . 6 : P e rce n tag e o f P e rso n s in 1 5 - 2 9 Ye ars with Vo catio n al T rain in g b y E d u catio n & G e n d e r
(2 0 0 4 -2 0 0 5 )
Educational Educational Educational Educational Educational F FF FFor or or or ormal mal mal mal mal Non- Non- Non- Non- Non- T TT TTotal otal otal otal otal F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal F FF FFor or or or ormal mal mal mal mal Non-formal Non-formal Non-formal Non-formal Non-formal T TT TTotal otal otal otal otal
Attainment Attainment Attainment Attainment Attainment formal formal formal formal formal ( (( ((W WW WWith ith ith ith ith S SS SSkil kil kil kil kill) l) l) l) l) ( (( ((W WW WWith S ith S ith S ith S ith Skil kil kil kil kill) l) l) l) l) ( (( ((W WW WWith S ith S ith S ith S ith Skil kil kil kil kill) l) l) l) l)
Levels Levels Levels Levels Levels
Males Males Males Males Males Females Females Females Females Females Persons Persons Persons Persons Persons
I lliterate &
Below Primary 0.3 10.7 11.0 0.2 6.4 6.7 0.2 8.1 8.3
Primary 0.6 12.2 12.7 0.5 6.7 7.3 0.6 9.7 10.3
Middle 1.2 10.6 11.8 1.5 6.4 8.0 1.3 8.9 10.2
Secondary 4.1 8.1 12.2 3.2 5.0 8.2 3.7 6.8 10.6
Higher Secondary 9.8 5.6 15.4 7.3 3.5 10.8 8.7 4.7 13.5
Diploma/
Certificate 70.4 2.9 73.3 68.3 2.7 71.0 69.7 2.8 72.5
Graduate &
Above 17.5 4.5 22.0 17.4 2.8 20.2 17.5 3.7 21.2
T TT TTotal otal otal otal otal 4.5 4.5 4.5 4.5 4.5 9.4 9.4 9.4 9.4 9.4 13.9 13.9 13.9 13.9 13.9 3.1 3.1 3.1 3.1 3.1 5.8 5.8 5.8 5.8 5.8 8.9 8.9 8.9 8.9 8.9 3.8 3.8 3.8 3.8 3.8 7.7 7.7 7.7 7.7 7.7 11.5 11.5 11.5 11.5 11.5
F ig . 3 . 7: D istrib u tio n o f P o p u latio n in th e Ag e G ro u p 1 5 -2 9 acro ss E d u catio n & S k ill L e ve ls (2 0 0 4 -2 0 0 5 )
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey
3.26 As Fig. 3.7 shows, 74 per cent of the formally
trained persons have higher secondary or higher levels
of education while, on the other hand, 78 per cent persons
wi th i nformal ski l l s have mi ddl e or l ower l evel of
education. The issue therefore is not that persons with
21
3
However, in spite of the improvement in the educational profile, there has been a fall in the level of overall skills, during the 11
year period for all categories of education and sex except for higher secondary and above.
lower levels of education can not acquire skills, but that
the exi sti ng trai ni ng systems are ori ented towards
providing formal training only to those persons with
higher levels of education.
3
. Most vocational training
programmes, including the ITIs, require at least secondary
or higher secondary levels of education to be able to enroll
in the programme.
3.27 The education and skill relationship prevails even
within unorganised and organised sectors. But, as one
might expect, there are some differences. I n the organised
sector, 94 per cent of the formally trained workers had
secondary or higher educational levels (Fig. 3.8). But in
the unorganised sector, this percentage was lower at 77
per cent i.e. in the unorganised sector slightly less than a
quarter of the formally trained workers had middle or
lower education. This percentage was higher among
women, 30 per cent of the formally trained female workers
have middle or lower education (compared to a figure of
about 20 per cent for male workers).
F ig 3 . 8 : E d u catio n al L e ve ls o f U su al P rin cip al an d S u b sid iary S tatu s Wo rk e rs with F o rm al S k ills (1 5 -2 9
ye ars) b y S e cto r (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Trades & Formal Training
3.28 The NSSO provides information regarding the
trades for which formal skill training has been provided
to the persons in 15 – 29 years age group. The most
sought after fi eld of formal vocati onal trai ni ng was
‘computer trades’ (nearly 30 per cent). For men the next
most popular trades were electrical and electronics (18.2
per cent), followed by mechanical engineering (12.3 per
cent), ‘driving’ (9.4 per cent), ‘civil engineering’ (4.7 per
cent), health and paramedical (4.3 per cent) and office
and business work’ (4.1 per cent). Among women there
was concentration of vocational training in computers
followed by ‘textile related trade’ (22 per cent). The next
most popular trades among women are ‘health and
paramedical’ and office and business work. While the
overall preferences were not very different among men in
rural and urban areas, the demand from rural female was
a little different (Table 3.7). Among the female youth in
rural areas, the first preference for vocational training
was textile and related trades (31 per cent), followed by
S k ill P ro file o f th e I n d ia n Wo rk fo rce
22
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
computer trades (21 per cent), and health and paramedical
trades (10 per cent). Among urban women i t was
computer related trades (39 per cent) followed by textile
related (18 per cent) and heath and paramedical trades
(9 per cent).
3.29 An analysis of formal training among the workers
shows that there are quite a few trades where training is
concentrated among both organised and unorganised
sector workers (Appendix Table A3.3). However, there
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
T ab le 3 . 7: P e rce n tag e o f P e rso n s in Ag e -g ro u p 1 5 - 2 9 Ye ars R e ce ivin g / R e ce ive d F o rm al Vo catio n al
T rain in g b y F ie ld o f Vo catio n al T rain in g & S e x (2 0 0 4 -2 0 0 5 )
P PP PPopulatio opulatio opulatio opulatio opulation (15-29 n (15-29 n (15-29 n (15-29 n (15-29 Y YY YYears) ears) ears) ears) ears) W WW WWor or or or orkers (15-29 kers (15-29 kers (15-29 kers (15-29 kers (15-29 Y YY YYears) ears) ears) ears) ears)
F FF FFi eld of i eld of i eld of i eld of i eld of V VV VVoc oc oc oc ocati o ati o ati o ati o ati onal nal nal nal nal T TT TTr rr rrai ni ng ai ni ng ai ni ng ai ni ng ai ni ng P PP PPerso erso erso erso ersons ns ns ns ns Male Male Male Male Male Female Female Female Female Female Unorgani sed Unorgani sed Unorgani sed Unorgani sed Unorgani sed Organi sed Organi sed Organi sed Organi sed Organi sed T TT TTotal otal otal otal otal
Mechanical Engineering 7.9 12.3 1.0 7.5 12.1 9.2
Electrical & Electronic Engineering 12.5 18.2 3.5 12.8 13.8 13.1
Computer Trades 30.0 29.9 30.0 23.5 32.3 26.8
Civil engineering and building construction related
works 3.3 4.7 1.2 3.9 2.1 3.3
Chemical Engineering 0.3 0.5 0.0 0.1 0.2 0.1
Leather Related 0.2 0.3 0.1 0.4 0.0 0.2
Textile Related 9.8 1.9 22.2 11.7 4.4 9.0
Catering, nutrition, hotels and restaurant related work 0.9 1.1 0.6 0.6 0.9 0.8
Artisan/ craftsman/ handicraft and cottage based
production work 1.9 1.5 2.5 2.8 0.9 2.1
Creative arts/ artists 1.2 0.8 1.9 0.4 1.3 0.8
Agriculture and crop production related skills and food
preservation related work 0.6 0.7 0.4 0.6 0.3 0.5
Non-crop based agricultural and other related activities 0.5 0.5 0.5 0.7 0.5 0.6
Health and paramedical services related work 6.4 4.3 9.9 4.9 8.6 6.3
Office and business related work 4.8 4.1 5.8 2.9 4.3 3.4
Driving and motor mechanic work 5.9 9.4 0.5 13.0 5.6 10.3
Beautician, hairdressing & related work 1.7 0.0 4.3 1.7 0.2 1.1
Work related to tour operators/ travel managers 0.1 0.0 0.0 0.0 0.0 0.0
Photography and related work 0.1 0.2 0.1 0.4 0.0 0.2
Work related to childcare, nutrition, pre-schools and
crèche 1.0 0.0 2.6 1.3 1.4 1.3
Journalism, mass communication and media related
work 0.3 0.3 0.1 0.1 0.5 0.2
Printing technology related work 0.5 0.6 0.5 0.9 0.5 0.7
Other 9.1 7.9 10.9 9.9 10.2 10.0
T TT TTotal otal otal otal otal 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
are a handful of trades where the incidence of formal
training is higher in the informal sector. These are: textile
rel at ed t rades; handi craf t / art i san/ cot t age based
production; and driving and motor mechanic work.
Poverty & Formal Skills
3.30 Poverty is undoubtedly a significant barrier in
acquiring skills. A poor person has hardly any chance of
acquiring formal skills. The incidence of training is fairly
23
high only for the middle and high income groups. Our
analysis shows that 7.5 per cent of the middle and 17.6
per cent high income groups were formally trained (Fig.
3.9). Such a systematic association between income and
training status is not the case with non-formal training
which is fairly dispersed across the lower income groups.
While any formal training system has to overcome the
barrier posed by the economic status of the potential
trainee, possession of informal skills does not provide
workers a way out of poverty.
Social Group & Formal Skills
3.31 The relationship between education levels and
skills also vary across social groups. The share of persons
with formal skills increases from STs, SCs, OBCs to
Others in that order. I ndeed it is only the general caste
categories for whom the incidence of training is higher
than the average of 3.8 per cent (Fig 3.10). As far as
informal skills are concerned, there are difference across
social groups. These are the highest among OBC persons
(who form a large proportion of non-agricultural self-
employed workers) and relati vely the lowest among
persons belonging to the general caste groups.
F ig . 3 . 9 : P e rce n tag e o f P e rso n s in th e Ag e G ro u p 1 5 -2 9 with F o rm al S k ill in P o ve rty G ro u p s (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Multivar Multivar Multivar Multivar Multivariate A iate A iate A iate A iate Anal nal nal nal naly yy yysis of the F sis of the F sis of the F sis of the F sis of the Factors I nfluencing F actors I nfluencing F actors I nfluencing F actors I nfluencing F actors I nfluencing For or or or ormal mal mal mal mal
Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red Ski lls Acqui red
3.32 The above analysis shows quite clearly that the
likelihood of being formally trained is higher for those
with high levels of education, the economically better
off, males, those living in urban areas, and those belonging
to upper castes. One may like to know whether each of
these factors exercise an independent influence on the
probability of being formally trained after accounting for
the influence of the other factors. Appendix Table A3.4
presents the likelihood of certain variables which impact
the formal training by sex, residence and education. The
reference variables are rural areas as place of residence,
females among sex, illiteracy among education and below
poverty line among poverty status. We observe that the
likelihood that a person gets formal training is 91 per
cent more if he comes from an urban area in comparison
to his rural counterparts. Similarly, a male has a greater
chance to be trained in comparison to his opposite sex.
The likelihood of an educated person being trained is
300 per cent if he is educated up to middle and jumps to
S k ill P ro file o f th e I n d ia n Wo rk fo rce
24
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
F ig 3 . 1 0 : P e rce n tag e o f P e rso n s with S k ills in th e Ag e G ro u p 1 5 -2 9 fo r e ach S o cial G ro u p s (2 0 0 4 -2 0 0 5 )
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
2500 per cent if he is secondary educated as compared to
illiterate persons. The social group also has an influence
on the chances of being formally trained. The SC, OBC
and Others all have a higher likelihood of being formally
trained as compared to the STs.
Supply of training: Training providers & Types
3.33 Given the requirement of availability of skilled
labour in the context of economic development, it is
processes of formal skill acquisition and training for
employment that become important. The fact is that
developing countries tend to lag behind in making these
processes available to their populations. These processes
of formal skill acquisition and training come from the
general educational systems and systems of technical and
vocational education and training (TVET) that are linked
to specific occupations. I t includes learning designed to
develop the skills for practicing particular occupations,
as well as that designed to prepare for entry or re-entry
into the world of work in general. TVET includes both
initial vocational training undertaken by young people
pri or to enteri ng the labour market and conti nui ng
vocational training undertaken by adults whilst in work
or during periods when they are economically inactive.
I n ot her words, i t encompasses bot h i ni t i al ski l l s
development and various forms of ‘Re-skilling’ and ‘Up-
skilling’.
3.34 The field of formal training obtained by the
youth is related to the supply of training through the
exi sti ng i nsti tutes of trai ni ng. The NSS survey also
enquires into the institutes from where the formal training
was being obtained. The I ndustrial Training I nstitutes
(I TI s) and the I ndustrial Training Centres (ITCs) provide
the largest formal training base for about 7.88 lakh
persons. Vocational education schools provided around
2 lakh training places, I nstitutions affiliated to the UGC
25
and the polytechnics provided about 6.15 lakh training
places. About 2.2 lakh persons were being trained in
tailoring, embroidery and stitch craft. Altogether, 39.2
lakhs or 3.92 million persons were receiving formal
training at the time of the survey (Table 3.8).
3.35 We have also analysed the type of institutions
t hrough whi ch f ormal l y t rai ned workers i n t he
unorgani sed and organi sed sectors recei ved trai ni ng
(Appendix Table A 3.3). Here again we notice that the
Bold figures relate to inadequate sample size below 30
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
T ab le 3 . 8 : P e rce n tag e o f P e rso n s in Ag e -g ro u p 1 5 - 2 9 Ye ars R e ce ivin g F o rm al Vo catio n al T rain in g b y
I n stitu te o f T rain in g & S e x, (2 0 0 4 -2 0 0 5 )
I nstitute of I nstitute of I nstitute of I nstitute of I nstitute of T TT TTr rr rraining aining aining aining aining Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal Male Male Male Male Male Female Female Female Female Female T TT TTotal otal otal otal otal
(i n thousands) (i n thousands) (i n thousands) (i n thousands) (i n thousands) (i n per cent) (i n per cent) (i n per cent) (i n per cent) (i n per cent)
ITI/ ITC 704.31 84.60 788.91 26.1 6.9 20.1
Schools with Vocational Course 142.55 58.28 200.83 5.3 4.7 5.1
UGC 287.57 65.66 353.22 10.7 5.3 9.0
Polytechniques 219.27 44.34 44.34 44.34 44.34 44.34 263.61 263.61 263.61 263.61 263.61 8.1 3.6 3.6 3.6 3.6 3.6 6.7 6.7 6.7 6.7 6.7
Janshikshan 15.69 15.69 15.69 15.69 15.69 25.09 25.09 25.09 25.09 25.09 40.78 40.78 40.78 40.78 40.78 0.6 0.6 0.6 0.6 0.6 2.0 2.0 2.0 2.0 2.0 1.0 1.0 1.0 1.0 1.0
National Open 2.39 2.39 2.39 2.39 2.39 4.80 4.80 4.80 4.80 4.80 7.18 7.18 7.18 7.18 7.18 0.1 0.1 0.1 0.1 0.1 0.4 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.2
Hotel Management 28.35 28.35 28.35 28.35 28.35 3.13 3.13 3.13 3.13 3.13 31.48 31.48 31.48 31.48 31.48 1.1 1.1 1.1 1.1 1.1 0.3 0.3 0.3 0.3 0.3 0.8 0.8 0.8 0.8 0.8
Food Craft, Catering 13.34 13.34 13.34 13.34 13.34 0.27 0.27 0.27 0.27 0.27 13.60 13.60 13.60 13.60 13.60 0.5 0.5 0.5 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.3 0.3 0.3
CSI SI / DI C 12.90 12.90 12.90 12.90 12.90 6.73 6.73 6.73 6.73 6.73 19.63 19.63 19.63 19.63 19.63 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Fashion Technology I nstitutes 0.47 0.47 0.47 0.47 0.47 9.56 9.56 9.56 9.56 9.56 10.03 10.03 10.03 10.03 10.03 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.8 0.8 0.8 0.3 0.3 0.3 0.3 0.3
Tailoring, Embroidery, Stitch Craft 21.16 21.16 21.16 21.16 21.16 201.80 222.96 0.8 0.8 0.8 0.8 0.8 16.4 5.7
Nursing I nstitutes 35.01 35.01 35.01 35.01 35.01 59.58 94.59 1.3 1.3 1.3 1.3 1.3 4.9 2.4
Physiotherapy, Ophthalmic, Dental I nstitutes 7.19 7.19 7.19 7.19 7.19 10.85 10.85 10.85 10.85 10.85 18.05 18.05 18.05 18.05 18.05 0.3 0.3 0.3 0.3 0.3 0.9 0.9 0.9 0.9 0.9 0.5 0.5 0.5 0.5 0.5
I nstitute Diploma Pharmacy 41.81 41.81 41.81 41.81 41.81 7.49 7.49 7.49 7.49 7.49 49.29 1.5 1.5 1.5 1.5 1.5 0.6 0.6 0.6 0.6 0.6 1.3
Hospital & Medical Training I nstitutes 47.75 44.76 92.51 1.8 3.6 2.4
Nursery Teachers’ Training I nstitutes 5.31 5.31 5.31 5.31 5.31 25.32 25.32 25.32 25.32 25.32 30.63 0.2 0.2 0.2 0.2 0.2 2.1 2.1 2.1 2.1 2.1 0.8
Training for Agricultural Extension 13.75 13.75 13.75 13.75 13.75 4.71 4.71 4.71 4.71 4.71 18.46 18.46 18.46 18.46 18.46 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5
Carpet Weaving Centres 0.00 0.00 0.00 0.00 0.00 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 4.82 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.4 0.4 0.4 0.1 0.1 0.1 0.1 0.1
Handloom, Handicraft, KVI C 0.07 0.07 0.07 0.07 0.07 0.63 0.63 0.63 0.63 0.63 0.70 0.70 0.70 0.70 0.70 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0
Recognised Motor Driving Schools 73.18 0.15 0.15 0.15 0.15 0.15 73.33 2.7 0.0 0.0 0.0 0.0 0.0 1.9
I nstitute for Secretariat Practices 5.85 5.85 5.85 5.85 5.85 26.27 26.27 26.27 26.27 26.27 32.11 32.11 32.11 32.11 32.11 0.2 0.2 0.2 0.2 0.2 2.1 2.1 2.1 2.1 2.1 0.8 0.8 0.8 0.8 0.8
Recognised Beautician Schools 0.00 0.00 0.00 0.00 0.00 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 28.97 0.0 0.0 0.0 0.0 0.0 2.4 2.4 2.4 2.4 2.4 0.7 0.7 0.7 0.7 0.7
I nstitutes run by Companies, Corporations 91.69 45.81 137.50 3.4 3.7 3.5
I nstitutes for Journalism, Mass Communication 32.98 32.98 32.98 32.98 32.98 2.46 2.46 2.46 2.46 2.46 35.44 35.44 35.44 35.44 35.44 1.2 1.2 1.2 1.2 1.2 0.2 0.2 0.2 0.2 0.2 0.9 0.9 0.9 0.9 0.9
Other I nstitutes 895.11 461.32 1356.43 33.2 37.6 34.6
Total (excluding Unspecified) 2697.69 1227.36 3925.05 100.0 100.0 100.0
Total 2709.37 1234.36 3943.73
formally trained have a fairly similar training background
i n both the organi sed and unorgani sed sectors. For
example, 24.8 per cent of the formally trained in the
unorganised sector and 22.4 per cent of the formally
trained in the organised sector come from the I TI s. At
another end, 4.1 per cent of the formally trained in the
unorganised sector and 3.8 per cent of the formally trained
in the organised sector come from the vocational schools.
There are a few differences, however. A higher proportion
S k ill P ro file o f th e I n d ia n Wo rk fo rce
26
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
of the trained workers in the organised sector are from
the UGC institutions and the polytechnics. On the other
hand, a higher proportion of those trained in tailoring,
embroidery and stitch craft, and in handloom, handicraft
are in the unorganised sector.
3.36 The source of formal training is quite different
for young men and women. While about 45 per cent of
formally trained men received their training from I TI /
I TC, Polytechnics, or UGC recognized institutions, this
percentage was only 15.8 for women (Table 3.8). On the
other hand, 27 per cent women received training from
institutes for tailoring, stitch-craft and embroidery, nursing
and medical training and teachers’ training.
3.37 Besides NSS, information on supply of training
i nsti tutes and i nfrastructure i s al so avai l abl e from
government sources. The details are provided later in this
report. While higher end technical education is provided
by I I Ts. engi neeri ng i nsti tuti ons, medi cal coll eges,
polytechnics and so on, the I TI s/I TCs have formed the
backbone of the system providing lower end formal
training. There are around 6834 I TI s/I TCs in I ndia with
a seating capacity of about 0.9 million throughout the
country. Of thi s, I TI s/ I TCs i n the southern states
comprised nearly 38 per cent, with Andhra Pradesh
accounting for around 12 per cent and Tamil Nadu around
9 per cent. The Apprenticeship Training Scheme of the
government is available to 2.58 lakh workers. Vocational
Schools offer places to about 1 million persons while
polytechnics offer about 3 lakh places. There are a host
of other public and private training providers for formal
training.
3.38 MoLE esti mates that there are onl y 2.5- 3
million vocational education and training places available
in the country. As shown earlier, our direct estimates are
that about 3.8 m were undergoing formal training at the
time of the survey. Given that the duration of such training
is often less than a year, we have estimated the annual
training capacity to be about 5 million. Out of these, very
few places are for those with low levels of education.
While the overall formal skill levels are very low, the
large numbers of people who drop out of school, in
particular, do not have the necessary education and skills
to be productively employed in the economy. This is
undoubtedly a very serious challenge to the current growth
and development process.
Demand for training
3.39 There is no systematic assessment of the demand
for training in the unorganised sector of the economy.
Most assessments of such demand have been made by, or
on behalf of, segments of (organised) industry. These do
not go into the overall need to educate and train the
predominantly informal sector labour force in I ndia.
However, almost all available reports (reviewed later in
this report) pinpoint skill shortages and mismatches
between demand and supply.
4
3.40 We have examined the recent characteristics of
the workforce in the organised and unorganised sectors,
including those such as average education level, technical
education, incidence of formal and non-formal skills and
growth rate of employment (Appendix Table A 3.5).
Broadl y, at the hi gh end of the workforce, we have
segments requiring high levels of general education and/
or technical education. Our primary focus is on segments
of the workforce which have comparatively low levels of
education, and who are currently with or without (formal/
non-formal) skills. Among these segments, those with a
4
The CI I – McKinsey Report ‘Made in I ndia: the next big manufacturing export story’ (October 2004) points out the big
mismatch between the needs of the industry and availability of skilled human resources in I ndia. The report states that if the
I ndian manufacturing sector has to grow at about 12 per cent per annum, it will be necessary for the education and training
system to produce at least 1.5 million technically skilled people every year. I t estimates that the country would need an
incremental requirement of about 20 million skilled people by 2015. Similarly, the apparel industry alone requires 2 million
skilled workers by 2010 and the present institutional structure is inadequate to meet the demand. The retail sector is another
activity that reportedly requires large numbers of skilled people. The Retailer’s Association of I ndia has signed an MOU with
Ministry of Labour and Employment to train the youth registered with the State Employment Exchanges. An estimate says
(reported in Economics Times dated June 19, 2007) that there is an immediate requirement of 1.5 lakhs skilled people on the
shop floor. A recent Study undertaken by Ernst & Young reports that ‘by targeting the youth population in I ndia, the Retailers
will be investing in the future as they will be able to influence and create loyalty from the start’ (Financial Express, June 8, 2007).
27
fairly high incidence of skills (predominantly non-formal)
and rapid growth of employment are clearly those on
which formal training initiatives would need to focus.
Our analysis (based on Table A3.5, in the appendix)
identifies the following trades on a prima facie basis as
those in which an intensive effort to expand training
would be required: Construction Workers, Stone Cutter;
Salesmen, Shop Assistants, Related; Transport Equipment
Operators; Tailors, Dress makers, Sewers, Upholsterers,
Related; Producti on, Related (Others); Carpenters,
Cabinet, Related Wood; Tobacco Preparers, Tobacco
Product Makers; Hai r Dresser, Barber, Beauti ci an,
Rel ated; House Keeper, Matron, Steward, Cooks,
Waiters, Bartenders; Stationary Engines, Equipment
Operators, Material Handling, Loaders; Plumber, Welder,
Sheet Metal, Structural, Metal Preparers, Erectors;
Painting; Arts and Journalists. There are other sectors/
segments whi ch are also growi ng rapi dly but where
current levels of training are low. Examples of these trades
are: Maids, Related House keeping Service (Others);
Professi onal Workers, Others; Bui l di ng Caretaker,
Sweeper, Cleaner, Related. The potential/need of training
in these sectors needs to be carefully examined.
Regional Dimensions of “Demographic
Dividend” & Training Capacity
3.41 A strong case for strengthening training capacity
for the informal sector workers arises from the increasing
requirement for skilled and semi-skilled labour from the
rest of the world. I ndia currently has a large emigrant
worker population, of whom a large percentage consists
of such workers. I t is anticipated that in the years to
come, with the projected increases in I ndia’s labour force
and the projected deficits in labour supply in developed
regions/countries, I ndian skilled/semi-skilled workers
mi ght pl ay a more si gni fi cant rol e i n meeti ng the
international deficits.
3.42 The Commission projected the increase in labour
force till the year 2017, age group wise, at the state level.
I t is estimated that between 2006-07 and 2016-17, 52.9
percent of the total increase in labour force and 81.6
percent of the increase in the young labour force (15-29
years) will be in the Eastern and Central states (M.P.,
Chhatisgarh, Jharkhand. Bihar, Uttar Pradesh, West
Bengal, Orissa, Assam and the Northeastern states), while
the Southern and Western states will contribute to 28.9
percent of the total increase in labour force and -2.6
percent to the increase in the young labour force. The
details are given in Appendix Table A3.6. I t is to be noted
that, at present, 57.1 percent of the formal training
capacity is in the latter group of states whereas the former
group of states have 28.1 percent of training capacity.
Other private and NGO training capacity too follows a
similar geographical pattern. I t follows that a major effort
will have to be made to boost training capacity in the
lagging states, if the country is to reap the so-called
demographic dividend.
Training Targets
3.43 As discussed earlier in this report, the level of
vocational skills in the labour force in I ndia compares
poorly with the position in other countries (Table 3.9).
The Commission is of the view that the percentage of
formally trained labour force should be raised to about
50 over the next three five year plans.
Note: Note: Note: Note: Note: Only those who have received formal vocational training are
shown as trained in this table. To the extent that training and skills in
I ndia are acquired through informal methods, including training in
the family, the I ndian figures are understated.
S SS SSour our our our ource: ce: ce: ce: ce: Report of the Task Force on Employment Opportunities
set up by the Planning Commission
T ab le 3 . 9 : Vo catio n ally train e d yo u th in L ab o u r
F o rce : I n te rn a tio n a l C o m p a riso n
Country Country Country Country Country Age Group Age Group Age Group Age Group Age Group V VV VVoc oc oc oc ocatio atio atio atio ational nal nal nal nall ll ll y y y y y T TT TTr rr rrained ained ained ained ained
( per cent of ( per cent of ( per cent of ( per cent of ( per cent of Those i n Those i n Those i n Those i n Those i n
labour force) labour force) labour force) labour force) labour force)
I ndia I ndia I ndia I ndia I ndia 20-24 20-24 20-24 20-24 20-24 5.06 5.06 5.06 5.06 5.06
Developing Countries Developing Countries Developing Countries Developing Countries Developing Countries
Botswana 20-24 22.42
Colombia(1998) 20-29 28.06
Mauritius(1995) 20-24 36.08
Mexico(1998) 20-24 27.58
Developed Countries Developed Countries Developed Countries Developed Countries Developed Countries
Australia(1998) 20-24 64.11
Canada(1998) 20-24 78.11
France(1997) 20-24 68.57
Germany (1998) 20-24 75.33
I srael(1998) 18-24 81.23
I taly (1997) 20-24 43.88
Japan (1997) 15-24 80.39
KoreaRepublic (1998) 20-24 95.86
New Zealand (1997) 20-24 63.03
Russian Federation (1998) 20-24 86.89
Singapore(1998) 20-24 66.24
United Kingdom(1998) 20-24 68.46
S k ill P ro file o f th e I n d ia n Wo rk fo rce
28
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
3.44 I n order to work out the annual and plan-wise
targets, the Commission has estimated the labour force
for the years up to 2021-22 using the last three rounds of
the NSS and the population projections prepared for the
Planning Commission. I n order to provide formal skill
training to half the labour force considerable expansion
of training would be required. We estimate that during
the Eleventh Plan, the annual training capacity would
need to about 12.5 million (up from about 5 million
currently). A further increase to 18 million would be
required during the 12
th
Plan which will go up to 25
million during the 13
th
Plan. I f these targets are achieved,
then by the end of the 13
th
Plan, about half the total
labour force of 623 million in 2021-22 would acquire
formal skills.
3.45 I t may be mentioned that the annual increase in
the labour force is presently estimated at about 9.6 million
which would fall to about 8 million by the end of the
13
th
Plan. The medium term strategy proposed by us
would involve provision of training for both new entrants
as well as those already in the labour force. As shown
elsewhere in this report, the training of workers in the
unorganised sector would require flexible delivery models
whi ch do not bank on fi xed i nsti tuti onal capaci ty/
infrastructure. The permanent training capacity in the
system may not need to be raised beyond 10-12 million
workers in the medium term.
Conclusion
3.46 Although the I ndian economy has experienced
rapid growth over the recent period, the low levels of
education and formal training of the workforce are a
matter of concern. Workers without education and skills
are stuck at the bottom of the labour market with low
productivity and earnings. From the point of view of the
economy, the lack of skills, the inability of the workers
to adapt to changing technological and market conditions,
and the existence of low productivity sectors can not but
constrain the growth of the economy and lead to a lop
sided growth structure in which the majority of workers
are not able to participate effectively in the development
process.
3.47 The economy has a small organised sector and
a large unorganised sector. Workers – waged as well as
self-employed in the unorganised sector- are worse off
in terms of their educational and skill endowments. Most
of the addition to the labour force is likely to be absorbed
in the unorganised non-farm sector.
3.48 The formal skill training system in I ndia was
created to meet the needs of a growing factory system. I t
catered to a few trades and persons with secondary or
higher education were eligible to undergo training. Over
the years, this system itself has not been able to meet the
changing needs of the organised sector. Moreover, since
the organised sector itself has not shown significant
growth in terms of employment, a majority of the trained
persons have found employment in the upper segments
of the unorganised economy. Formal training, which is
accessed by a very low percentage of the population
currently is directly related to the socio-economic status
of the individual. To some extent, other skill needs of the
economy are met through non-formal training, which is
relatively more accessible to persons from lower socio-
economic backgrounds but which suffers from a number
of limitations. Moreover, even after taking into account
the non-formally trained, skilled workers in the I ndian
economy are still small in number. There are many sectors
where there is severe dearth of skills and in which the
case for expanded formal training can be made out.
3.49 I n this report, we have focused on the training
needs of workers in the unorganised sector who have
low levels of education and low level of formal skills.
We are of the view that all entrants in the labour force
must be equipped with a minimum level of education
which must be gradually extended to secondary level.
Simultaneously efforts have to be made to provide these
workers with skill training through modular courses so
that a significant part of the labour force can be imbued
with formal marketable skills within a reasonable period
of time. Unless this is done, this workforce will not be
able to move on a trajectory of higher productivity and
higher incomes, with deleterious consequences for the
development of the economy as a whole.
29
Ap p e n d ix T a b le A3 . 1 : S k ills a cro ss th e P o p u la tio n (1 9 9 3 -9 4 )
Ski ll Ski ll Ski ll Ski ll Ski ll N NN NNumber of P umber of P umber of P umber of P umber of Perso erso erso erso ersons ns ns ns ns P PP PPer er er er ercent to total cent to total cent to total cent to total cent to total P PP PPer er er er ercent to total wi th ski l cent to total wi th ski l cent to total wi th ski l cent to total wi th ski l cent to total wi th ski ll s l s l s l s l s
(i n lakhs) (i n lakhs) (i n lakhs) (i n lakhs) (i n lakhs) (i n per cent) (i n per cent) (i n per cent) (i n per cent) (i n per cent)
Stenographer Stenographer Stenographer Stenographer Stenographer 43.45 43.45 43.45 43.45 43.45 0.49 0.49 0.49 0.49 0.49 4.76 4.76 4.76 4.76 4.76
Fisherman 21.01 0.23 2.30
Miner, Quarryman 8.36 0.09 0.92
Spinner 16.78 0.19 1.84
W WW WWeav eav eav eav eaver er er er er 74.89 74.89 74.89 74.89 74.89 0.84 0.84 0.84 0.84 0.84 8.21 8.21 8.21 8.21 8.21
T TT TTailor ailor ailor ailor ailor 156.04 156.04 156.04 156.04 156.04 1.75 1.75 1.75 1.75 1.75 17.10 17.10 17.10 17.10 17.10
Shoemaker 7.69 0.09 0.84
Carpenter 29.25 0.33 3.21
Mason, Bricklayer 27.89 0.31 3.06
Moulder 2.70 0.03 0.30
Machineman 16.45 0.18 1.80
Fitter, Diemaker 11.43 0.13 1.25
Welder 8.27 0.09 0.91
Blacksmith 9.63 0.11 1.05
Goldsmith 7.81 0.09 0.86
Silversmith 2.36 0.03 0.26
Electrician 16.16 0.18 1.77
Repair Electronic Goods 9.72 0.11 1.06
Motor Motor Motor Motor Motor V VV VVehic ehic ehic ehic ehicle D le D le D le D le Dr rr rriv iv iv iv iver er er er er 73.37 73.37 73.37 73.37 73.37 0.82 0.82 0.82 0.82 0.82 8.04 8.04 8.04 8.04 8.04
Boatman 2.16 0.02 0.24
Potter 8.99 0.10 0.99
Nurse, Midwife 4.57 0.05 0.50
Basket, Wick maker 24.38 0.27 2.67
Toy Maker 0.34 0.00 0.04
Brick Maker, Tile maker 11.32 0.13 1.24
Bidi Maker Bidi Maker Bidi Maker Bidi Maker Bidi Maker 41.72 41.72 41.72 41.72 41.72 0.47 0.47 0.47 0.47 0.47 4.57 4.57 4.57 4.57 4.57
Book binder 1.25 0.01 0.14
Barber 13.49 0.15 1.48
Mud House builder & thatcher 36.15 0.40 3.96
Others 224.79 2.51 24.64
T TT TTotal otal otal otal otal W WW WWith S ith S ith S ith S ith Ski l ki l ki l ki l ki lls ls ls ls ls 912.44 912.44 912.44 912.44 912.44 10.20 10.20 10.20 10.20 10.20 100.00 100.00 100.00 100.00 100.00
No Skills No Skills No Skills No Skills No Skills 8029.45 8029.45 8029.45 8029.45 8029.45 89.80 89.80 89.80 89.80 89.80
T TT TTotal otal otal otal otal 8941.89 8941.89 8941.89 8941.89 8941.89 100.00 100.00 100.00 100.00 100.00
Source: Source: Source: Source: Source: Computed using unit level data of NSS on Employment and Unemployment, 50th Round, Schedule 10, 1993-94
S k ill P ro file o f th e I n d ia n Wo rk fo rce
30
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Ap p e n d ix T ab le A3 . 2 : S k ills o f Wo rk e rs (1 5 - 2 9 ye ars) acro ss I n d u strie s & S e cto rs (2 0 0 4 -2 0 0 5 )
Bold figures indicate sample size below 30
S SS SSour our our our ource: ce: ce: ce: ce: Computed from unit level data of NSS 61st Round 2004 - 2005, Employment-Unemployment Survey.
Unorganised Sector Unorganised Sector Unorganised Sector Unorganised Sector Unorganised Sector Organised Sector Organised Sector Organised Sector Organised Sector Organised Sector Al Al Al Al All l l l l W WW WWor or or or orkers kers kers kers kers
F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill F FF FFor or or or ormal mal mal mal mal Any Skill Any Skill Any Skill Any Skill Any Skill
Agriculture 0.8 11.0 3.5 13.1 0.8 10.9
Mining 0.3 0.3 0.3 0.3 0.3 2.1 2.1 2.1 2.1 2.1 4.4 4.4 4.4 4.4 4.4 19.0 19.0 19.0 19.0 19.0 2.3 2.3 2.3 2.3 2.3 10.4 10.4 10.4 10.4 10.4
Manufacturing 3.7 31.4 8.7 26.2 5.1 29.8
Electricity, Gas, Water Supply 0.0 0.0 0.0 0.0 0.0 3.8 3.8 3.8 3.8 3.8 20.5 20.5 20.5 20.5 20.5 20.8 20.8 20.8 20.8 20.8 15.8 15.8 15.8 15.8 15.8 16.9 16.9 16.9 16.9 16.9
Construction 2.6 14.0 1.8 8.5 2.4 12.7
Trade 4.2 13.1 14.8 26.1 4.7 13.7
Hotels & Restaurants 1.7 1.7 1.7 1.7 1.7 12.1 8.6 8.6 8.6 8.6 8.6 14.8 14.8 14.8 14.8 14.8 2.9 12.6
Transport 7.5 22.5 14.1 22.1 8.4 22.5
Finance 18.9 18.9 18.9 18.9 18.9 20.6 20.6 20.6 20.6 20.6 23.8 26.4 22.3 24.6
Real estate 19.0 30.6 32.1 34.2 24.2 32.1
Public Administration 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 15.1 12.1 14.9 12.1 14.8
Education 23.2 28.1 19.0 22.1 20.9 24.8
Health, Social Work 24.4 42.0 36.6 40.2 29.9 41.2
Community, Personal, Social Service 2.8 28.2 11.5 11.5 11.5 11.5 11.5 22.3 22.3 22.3 22.3 22.3 3.5 27.7
Private Households with Employed Persons 5.5 5.5 5.5 5.5 5.5 8.9 8.9 8.9 8.9 8.9 0.0 0.0 0.0 0.0 0.0 7.0 7.0 7.0 7.0 7.0 5.5 5.5 5.5 5.5 5.5 9.0 9.0 9.0 9.0 9.0
Total 2.5 15.1 11.1 21.6 3.5 15.8
31
Ap p e n d ix T ab le A3 . 3 : P e rce n tag e o f Wo rk e rs R e ce ivin g / R e ce ive d F o rm al Vo catio n al T rain in g in
Ag e -G ro u p 1 5 - 2 9 Ye ars b y I n stitu tio n s & S e cto r (2 0 0 4 -2 0 0 5 )
I nstitute of I nstitute of I nstitute of I nstitute of I nstitute of T TT TTr rr rraining aining aining aining aining Unorganised Unorganised Unorganised Unorganised Unorganised Organised Organised Organised Organised Organised T TT TTotal otal otal otal otal
ITI/ ITC 24.8 22.4 23.9
Schools with Vocational Course 4.1 3.8 4.0
UGC 1.9 1.9 1.9 1.9 1.9 3.5 2.5
Polytechniques 2.3 5.5 3.5
Janshikshan 0.6 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6
National Open 0.1 0.1 0.1 0.1 0.1 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Hotel Management 0.1 0.1 0.1 0.1 0.1 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Food Craft, Catering 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4
CSI SI / DI C 0.6 0.6 0.6 0.6 0.6 0.8 0.8 0.8 0.8 0.8 0.6 0.6 0.6 0.6 0.6
Fashion Technology I nstitutes 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Tailoring, Embroidery, Stitch Craft 9.3 2.6 2.6 2.6 2.6 2.6 6.8
Nursing I nstitutes 1.5 1.5 1.5 1.5 1.5 3.7 2.3
Physiotherapy, Ophthalmic, Dental I nstitutes 0.1 0.1 0.1 0.1 0.1 0.4 0.4 0.4 0.4 0.4 0.2 0.2 0.2 0.2 0.2
I nstitute Diploma Pharmacy 0.8 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.8
Hospital & Medical Training I nstitutes 2.3 3.0 2.6
Nursery Teachers' Training Institutes 1.3 1.3 1.3 1.3 1.3 1.9 1.9 1.9 1.9 1.9 1.5
Training for Agricultural Extension 1.0 1.0 1.0 1.0 1.0 0.3 0.3 0.3 0.3 0.3 0.7 0.7 0.7 0.7 0.7
Carpet Weaving Centres 0.2 0.2 0.2 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.2 0.2 0.2
Handloom, Handicraft, KVI C 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Recognised Motor Driving Schools 10.2 3.4 7.6
I nstitute for Secretariat Practices 0.5 0.5 0.5 0.5 0.5 1.7 1.7 1.7 1.7 1.7 0.9
Recognised Beautician Schools 1.0 1.0 1.0 1.0 1.0 0.2 0.2 0.2 0.2 0.2 0.7 0.7 0.7 0.7 0.7
I nstitutes run by Companies, Corporations 2.8 5.0 3.6
I nstitutes for Journalism, Mass Communication 0.2 0.2 0.2 0.2 0.2 0.5 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.3 0.3
Other I nstitutes 33.7 38.4 35.5
T TT TTotal otal otal otal otal 100.0 100.0 100.0
Bold figures indicate sample size below 30
Source: Source: Source: Source: Source: Computed from unit level data of NSS 61st Round, 2004 - 2005, Employment-Unemployment Survey and adjusted for
population
S k ill P ro file o f th e I n d ia n Wo rk fo rce
32
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Ap p e n d ix T ab le A3 . 4 : L o g it M o d e l: D e p e n d e n t Variab le Vo catio n al T rain in g
(H ave T rain in g , F o rm al an d I n fo rm al/N o T rain in g )
*- Significant at .01
V VV VVar ar ar ar ariable iable iable iable iable Coefficient Coefficient Coefficient Coefficient Coefficient Odds Ratio Odds Ratio Odds Ratio Odds Ratio Odds Ratio
Constant -7.298
Sector
Rural(R) - -
Urban 0.648* 1.913
Sex
Female(R) - -
Male 0.133* 1.142
Education
I lliterate & Below Primary(R) - -
Primary & Middle 1.177* 3.244
Secondary & Above 3.229* 25.243
Poverty Status
Below Poverty Line(R) - -
BPL to 2*Poverty Line 0.457* 1.579
More then 2* Poverty Line 1.250* 3.492
Socio-religious
ST(R) - -
SC 0.851* 2.342
OBC 0.684* 1.983
Others 0.529* 1.698
33
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34
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35
S k ill P ro file o f th e I n d ia n Wo rk fo rce
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36
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
T ab le A3 . 6 : S tate -wise T o tal L ab o u r F o rce & I n cre ase in L ab o u r F o rce & T rain in g C ap acity (p e r ce n t)
S. No. S. No. S. No. S. No. S. No. State State State State State % to % to % to % to % to T TT TTotal L otal L otal L otal L otal Labour abour abour abour abour % to % to % to % to % to T TT TTotal otal otal otal otal % to % to % to % to % to T TT TTotal otal otal otal otal % to % to % to % to % to T TT TTotal otal otal otal otal Seating Capacity Seating Capacity Seating Capacity Seating Capacity Seating Capacity
F FF FFor or or or orce ce ce ce ce, ,, ,, 2006- 07 2006- 07 2006- 07 2006- 07 2006- 07 I ncrease in I ncrease in I ncrease in I ncrease in I ncrease in L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce I ncrease in I ncrease in I ncrease in I ncrease in I ncrease in in I TI / I TC * in I TI / I TC * in I TI / I TC * in I TI / I TC * in I TI / I TC *
L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce (15- 29 years), (15- 29 years), (15- 29 years), (15- 29 years), (15- 29 years), L LL LLabour F abour F abour F abour F abour For or or or orce ce ce ce ce
2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 to 2006- 07 2006- 07 2006- 07 2006- 07 2006- 07 (15- 29 years) (15- 29 years) (15- 29 years) (15- 29 years) (15- 29 years)
2016-17 2016-17 2016-17 2016-17 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17 2006-07 to 2016-17
1 Andhra Pradesh 8.6 5.8 8.8 2.3 12.1
2 Assam 2.3 3.3 2.3 4.8 0.6
3 Bihar 6.4 7.1 6.3 15.4 3.1
4 Gujarat 5.3 5.7 5.5 3.1 8.2
5 Haryana 2.1 3.1 2.3 2.8 2.9
6 Karnataka 5.7 4.6 5.6 -0.3 9.8
7 Kerala 3.1 1.2 2.7 -2.4 6.7
8 MP 6.0 7.0 6.2 9.6 3.5
9 Maharashtra 10.3 9.7 10.0 3.6 11.3
10 Orissa 3.8 3.3 3.8 3.4 8.3
11 Punjab 2.4 2.1 2.5 -0.4 3.3
12 Rajasthan 5.8 7.6 6.3 12.7 5.7
13 Tamil Nadu 6.6 1.9 5.9 -8.9 9.0
14 UP 14.4 19.0 14.7 31.7 7.0
15 WB 7.0 5.6 7.0 5.0 1.5
16 Jharkhand 2.5 3.3 2.4 6.4 2.2
17 Chhatisgarh 2.3 2.2 2.2 3.3 1.3
18 Uttarakhand 0.9 1.0 0.9 0.9 0.9
19 Other NE States 1.2 2.0 1.2 2.0 0.5
20 Others 3.3 4.4 3.4 4.9 2.0
Total - South & West
(1+4+6+7+9+13) 39.6 28.9 38.5 -2.6 57.1
Total- East & Centre
(2+3+8+10+14+15+16+
17+19) 46.0 52.9 46.2 81.6 28.1
All States All States All States All States All States 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Source: Source: Source: Source: Based on Commission's projections
37
International Experiences of
Skill Development & Training
4
4.1 Thi s chapt er at t empt s t o revi ew
international experiences of skill development and
training delivery, keeping in view the issues that
are important from a developing country context
and more specifically from that of enterprises and
workers in the unorganised sector. I n Chapter 3,
we have seen that, with 5.06 per cent who had
vocat i onal t rai ni ng as a proport i on of t he
population in the age group 20-24 (Table 3.9),
I ndia fares poorly even in comparison to some of
the devel opi ng countri es such as Botswana,
Colombi a, Mauri ti us and Mexi co, where the
ratios were significantly above 20 per cent. I n
advanced countries, of course, the figures are
mostl y above 60 per cent, wi th the Russi an
Federation and the Republic of Korea having a
staggering 87 per cent and 96 per cent respectively.
The important question is whether it is possible
for I ndia to drastically change this situation with
regard to skill development and training and
whether international experiences can provide
gui deli nes on the di recti ons to be taken and
pathways to be planned. This chapter tries to
revi ew the i nternati onal experi ences i n ski l l
development in general and in the informal sector
in particular.
4.2 As pointed out in Chapter 1, the key
consi derati ons are the pri nci ples that di ctate
systems of training and skill development i.e.,
whether through the educational system or TVET
systems, whether supply-driven or market demand
led, whether for employment confined to pre-
employment training alone or also includes a
process of continuous learning and re-skilling;
who delivers the training and where; and modes
of fi nanci ng the programmes as wel l as the
incentives. While the review below will examine
di fferent systems on the basi s of the cri teri a
ment i oned, here we fi rst bri efl y revi ew t he
trajectory of skill development in the case of
countries that have made the transition to high
levels of development, both developed as well as
developing.
4.3 I n a typology developed by the ADB
(Asian Development Bank, 2004) to discuss the
rel ati onshi p between ski l l devel opment and
training and levels of economic development, it
has been suggested that l evel s of economi c
development roughly corresponded to certain
levels of development of education and training.
I n the earliest stages, when the primary sector is
predominant, manufacturing is characterized by
labour-intensive activities and low value added
production and competitiveness derived from low
costs, basic education and adult education are the
priorities. Higher education is limited to the
gradual development of a basic skills formation
for blue-collar workers. At the next stage, when
the secondary sector becomes predomi nant,
manufactured good and service exports are high
and production concentrates on high value goods
and services, and when competitiveness is based
38
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
on high-technology, high value added goods , universal
secondary education, worker upgrading, and technician
training become the priorities. More specifically, apart
from the universalisation of secondary education, there
is a deepening of vocational and technical education at
the post secondary levels and a widening of the skills to
include teamwork and communication. There is also an
increase in the incidence of enterprise level or on-the-
job training. In the final stage characterized by innovation-
driven growth, leading towards the knowledge economy,
there is a need to increase the rate of innovation, adaptation
and the commercial development of new technologies.
At thi s stage, hi gher educati on wi th sci ence based
learning becomes the priority, along with research and
development.
4.4 Typologies such as the one presented above help
separate the different elements of skill up-gradation
corresponding to different structures of production. As
countries move from a low skill base to a high skill one,
the skill-mix also tends to change and different levels of
education and different types of training (with location
being important) will have elements of skill development
strategies for all levels of skills. However, the pathways
followed by countries that have managed the transition
to high levels of skills and which have in turn translated
into high levels of development have been very different.
This has been on the basis of the institutional structures
put in place to impart different levels of education and
types of skills in the economies.
4.5 The pathways followed by most of the OECD
countries consist of broadening and universalizing access
to education and evolving skill development systems that
were variedly market led and state directed and also
di fferentl y emphasi zed trai ni ng i n i nsti tuti ons and
enterprises. They resulted in outcomes that were spread
across long periods of time. The distinctly different paths
followed by the East Asian countries and Japan, which
achi eved very hi gh l evel s of educat i on and ski l l
development in a very short period of time, brought out
t he i mport ance of consci ous t arget i ng, di rect ed
investments and strong regulation in skill development
programmes. The review below have attempted to bring
out the salient aspects of these different paths adopted.
4.6 I t is useful to distinguish between public and
private institutions for skill development and also on the
basis of where the skilling process is located, i.e., within
the enterprise/firm, in educational institutions and in
institutions outside the firm. The Study Group set up for
t he Second Nat i onal Commi ssi on on Labour has
exami ned vari ous systems of ski ll trai ni ng i n other
countries. These training systems are found to be broadly
of three types - “cooperative,” “enterprise based” and “state-
driven.” The State driven system can be further demand
driven and supply driven. These have been summarised
in the Table 4.1 below.
4.7 I n the cooperative system, there is no single
institution responsible for the planning and delivery of
training. I nstead, the employers’ organisation and trade
unions cooperate strongly for producing the desired result.
Germany is one of the successful examples of this system.
4.8 I n the enterprise-based system as prevalent in
Japan, the educational system provides a foundation of
basi c ski lls, whi ch i s then bui lt upon by employers
through intensive off and on-the-job training. While
vocational and technical schools provide some initial
training, the bulk of skills development is provided and
financed by employers. Employees with few industry-
specific skills on entry are moulded by the system into a
highly skilled workforce that is very adaptable to change.
This kind of system has come into existence in the context
of very low turnover of the workforce, labour having long-
term commitment to the enterprise and enterprises in
turn wanting to invest in the labour force.
4.9 State-driven systems can be divided into two
types. Education and training systems of the demand-
led type, prevalent in the East and South East Asian
economies, have to respond to rapid changes in the
demand for skills. I n this, the governments have played
a key role, especially in meeting the demand for higher
level skills. I n the State-driven systems of the supply-
led type, which were operational in many of the centrally
planned economies of Eastern Europe and the erstwhile
USSR, the trai ni ng system was sustai ned through
government financing. I t puts little or no pressure on
employers to train with the government taking on the
prime responsibility of running training institutes.
39
S SS SSour our our our ource: ce: ce: ce: ce: Second National Commission on Labour, World Development Report, 1998-99
T ab le 4 . 1 : T rain in g S yste m s
System System System System System Countries Countries Countries Countries Countries Main Feature/s Main Feature/s Main Feature/s Main Feature/s Main Feature/s
"Co-operative" Austria, Germany , Switzerland, and many Pressures to undertake training resulting from
countries in Latin America counties strong co-operation amongst employers'
organisations, the state and trade unions
"Enterprise-based" Japan Low labour mobility, lifetime employment for
- Low labour turnover many staff, 'longtermism' arising from absence
of stock market pressure,wage system based
on seniority and enterprise-based trade unions
- Voluntarist The United Kingdom, United States Few institutional pressures on firms to provide
training
"State- driven" Hong Kong , Malaysia, Republic of Korea State plays a leading role in coordinating the
a) Demand-led Singapore, Taiwan, China demand for and supply of skills,Operates in
an open and competitive economic
environment
b) Supply-led Economies in transition, many developing Government takes on a prime responsibility
countries especially in Asia and Africa for formal sector training in training
institutes,Little or no pressure on employers
to train
4.10 The Asian Development Bank in its Report
(ADB, 2004) cl assi fi es syst ems of ski l l format i on
according to training location. According to the report,
training can be in schools as part of the formal education;
in non-formal training centres outside the school system
and within enterprises as discussed below:
School-based Vocational Education &
Training
4.11 Comprehensive High Schools or Diversified
Secondary Education: Vocati onal ski l ls are developed
within secondary schools, typically called comprehensive
or diversified secondary schools, as in the United States
and Sweden. Students take practical courses according
to their interest and aptitude in one single school attended
by all students from a given geographical area, regardless
of their career interests.
4.12 Vocational and Technical Schools: I n the French
model , vocati onal educati on takes pl ace mai nl y i n
vocational or technical schools at the secondary level.
These institutions run parallel to academic schools that
prepare students for higher education. I n France, after
the age of 13 students are tracked into different types of
schools. They may attend vocational schools for 2 or 3
years and earn a Vocational Proficiency Certificate or
Vocat i onal Educat i on Cert i f i cat e; a Vocat i onal
Baccalaureate may be earned after another 2 more years.
These schools serve two purposes: (a) to prepare youth
to work in skilled jobs, and (b) to cater to students that
do not want to pursue long academic studies. A variant
is the technical school (lycee technique), which combines
academic study with technology. The main difference of
these from vocational schools is the greater attention to
academic subjects, and the less attention to specialised
subjects. Graduates are usually trained for supervisory
roles in factories or for highly skilled occupations, e.g.
electronics and drafting. There are several cases of success
wi t h t hi s approach i n Asi an count ri es where
industrialisation has been rapid, such as in the Republic
of Korea and in Taipei, China.
N NN NNo oo oon- F n- F n- F n- F n- For or or or ormal mal mal mal mal T TT TTr rr rrai ni ng Centr ai ni ng Centr ai ni ng Centr ai ni ng Centr ai ni ng Centres es es es es
4.13 Vocational Training Institutes(or Technical Training
Institutes): These are typically operated by ministries of
labour (or community development), and are outside the
school system. Training is thus provided for youth who
have completed their formal education, and certificates,
if conferred, are not recognised as from formal school
I n te rn a ti o n a l E xp e ri e n ce s o f S k i ll D e ve lo p m e n t & T ra i n i n g
40
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
system. The training can be variable in length - from
modular courses to short duration courses, lasting even
2-to-3 years. These training centres have the advantage
of being focused on one purpose – ‘training for work’,
and i n t heory can modi fy t he cont ent of t rai ni ng
programmes more quickly than schools in response to
changes in the labour market. The clientele may also be
more serious about training, having completed their
formal education and with reduced aspirations for moving
up the educational ladder.
4.14 TheLatin American Model: Training in most
Latin American countries (main exceptions are Argentina
and Mexico, which use vocational schools within the
education system) is based at training centres, and are
designed for both working adults and young school
l eavers. The vari ous t rai ni ng cent res are run
(independently of the education system) by autonomous
training agencies that maintain close links with industry
through strong representation of employers on their
governing bodies. Also significant is their financing,
which is based on a payroll tax (about 1 per cent) paid by
employers. These organizational features have enabled
them to provi de hi gh quali ty trai ni ng and respond
dynamically and flexibly to changing demands of the
labour market. The systems are separate from academic
schools, thereby sheltering ‘training-for-trades’ from the
prejudices against manual occupations and the attractions
of higher education. The training levy provides financial
stability and a long-range planning horizon. These
financial and institutional arrangements have allowed the
i nsti tuti ons to survi ve economi c cri ses and fend off
political interference.
Apprenticeship Training Apprenticeship Training Apprenticeship Training Apprenticeship Training Apprenticeship Training (by by by by by Formal Formal Formal Formal Formal
Sector Enterprises Sector Enterprises Sector Enterprises Sector Enterprises Sector Enterprises)
4.15 TheGerman Model: This model draws heavily
from the apprenticeship systems that developed in Europe
from the middle ages through occupational guilds. The
apprenti ce offers labour to a master craftsperson i n
exchange for a small wage and on-the-job trai ni ng.
Because of its direct links with the labour market, the
apprenticeship approach has proved to be quite efficient
at transferring skills, especially when technology is stable
or changing slowly. I t is also largely self-financing and
does not rely on public financing. At its most sophisticated
form, i t has become complex and structured (as i n
Germany). The famous “ ““ ““dual apprenticeship system” ”” ”” of of of of of
ski l ski l ski l ski l ski ll s tr l s tr l s tr l s tr l s trai ni ng i n Ger ai ni ng i n Ger ai ni ng i n Ger ai ni ng i n Ger ai ni ng i n German man man man many yy yy, combines two basic models:
centre-based training and enterprise-based training. The
syst em i s based on a l ongst andi ng t radi t i on of
apprenticeship that is firmly rooted in German corporate
culture. Theoretical training for about one day per week
is provided by public vocational training centres and
practical training is provided within enterprises about
four days per week. Apprentices sign an employment
contract with an enterprise, which gives them on average
3½ years of formal training under the supervision of a
certified master. Apprentices receive an allowance fixed
by the collective agreement for each branch of training.
The graduates receive a nationally recognized diploma.
While a large part of this training is enterprise-based, it
has evolved in response to co-operative behaviour and
close co ordination among employers’ associations, labour
unions and public administration.
4.16 While these are the overall categories that can
be seen in different countries, these systems cater mostly
to formal sector enterprises. Below, we review the systems
that have been tried out in the case of the informal sector.
Training Systems for the Informal Sector
4.17 Traditional (unregulated) Apprenticeship Training:
Unregulated apprenticeship training has evolved in the
informal sector in many countries over decades. I n fact,
in many countries it may be the predominant form of
training (e.g. in Sub-Saharan Africa and the I ndian sub-
continent). Typicall y, a written or oral agreement is
concluded between a master craftsman working in the
informal economy and parents or guardians, with the
objective of the apprentice acquiring relevant, practical
skills. Sometimes, the master receives a training fee, or
the apprentice must earn the training in exchange for
work or reduced wages. Training consists primarily of
‘ ‘‘ ‘‘observing and imitating the master’ ’’ ’’. The apprenticeship
may l ast for several years and i s product speci fi c.
Traditional apprenticeship has several advantages over
conventional training methods, but also has disadvantages,
as seen in Table 4.2.
4.18 Ni geri a, t hrough i t s Nat i onal Open
Apprenticeship Scheme (NOAS), has recognized the role
of the traditional apprenticeship system. The scheme
41
T a b le 4 . 2 : Ad va n ta g e s / D isa d va n ta g e s o f U n re g u la te d Ap p re n tice sh ip
Advantages Advantages Advantages Advantages Advantages Disadvantages Disadvantages Disadvantages Disadvantages Disadvantages
- practical in orientation,
- self-regulating and self-financing,
- caters to individuals who lack the educational requirements
for formal training,
- serves important target groups (rural populations and urban
poor), and
- generally cost-effective
- gender bias (females rarely participate),
- exclusion of applicants from very poor households,
- perpetuation of traditional technologies,
- a lack of standards and quality assurance
involves the state encouraging employers, including those
in the informal sector, to take on apprentices beyond their
essential needs. Allowances are paid both to the trainee
and to the master, and there is a system for monitoring
t he qual i t y of t rai ni ng. What makes t hi s syst em
particularly interesting is that it has the informal sector
producing state apprentices and “traditional” apprentices
within the same workshop. For one group the master is
being paid by the state, while the others pay for themselves
and make their own traditional arrangements. The duration
of trai ni ng for the new apprenti ces i s less than the
customary group, and the state apprentices are encouraged
to attend some off-the-job training on Saturdays. This
system has not been dependent upon full-time institutional
training, but on expanding access to training within
industry — whether formal or informal.
4.19 Bangl adesh’s Underprivileged Children’s
Education Programme(UCEP) (World Bank Report,
2001) , established in the early 1970s, is an innovative
programme designed for the informal sector that seeks
to raise the living standards of poor urban children and
their families. I t focuses on the target group of working
street children and aims to provide them with skills to
enhance their employability in the local labour market,
often in the informal sector. UCEP is conducted in 30
general schools for non-formal basic education working
on three shifts per day in four major cities of Bangladesh.
Total enrolments are about 20,000. Skill training is given
in three training institutions working on two shifts each,
t rai ni ng a t ot al of 1,400 t rai nees. UCEP has
extraordinarily high completion and employment rates
for its graduates, both averaging about 95 per cent.
4.20 UCEP’s programme can be divided into three
stages. (a) First stage is accelerated non-formal basic
education starting at age 10 or 11. About half of the
graduat es f rom t he non- f ormal basi c educat i on
programme are admitted into vocational training. (b)
Second stage consists of fundamental skills training which
may vary in length from six months to two years. (c)
Third stage is placement in employment and follow-up
on the job.
4.21 Factors that have contributed to making UCEP
successful include:
• Providing students with a solid base of general
education.
• Focusing on the target group, those who intend
to enter the labour force after training as semi-
skilled workers.
• Conti nuous l i nkages wi th i ndustry, whi ch
ensure that trainees are trained in the knowledge,
skills and attitudes sought by employers, and
al so t hat empl oyers are aware of t he
competencies of UCEP graduates.
• Focus on acquisition of skills and competencies
t hrough hi ghl y st ruct ured, super vi sed
individual “hands-on” instruction (rather than
being driven by credentials and certificates).
• Rigorous follow-up of the graduates in terms
of employment, earnings and performance on
the job.
4.22 An aspect of informal employment that needs to
be addressed in developing economies that underwent
restructuring is that of retrenched employees, who fall
back on the informal sector. An initiative that needs to
be mentioned here is from China, where the Ministry of
Labour and Soci al Securi t y has i nt roduced a re-
employment training programme for the unemployed and
laid-off employees, referred to as the Three Years Ten
Million Re-employment Training Programme. During
I n te rn a ti o n a l E xp e ri e n ce s o f S k i ll D e ve lo p m e n t & T ra i n i n g
42
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
1998-2000, this programme aimed at giving training to
10 million people, employees laid off from SOEs and
the unemployed, in order to raise their vocational skills,
generating market awareness and assist them towards re-
employment. During the execution of this re-employment
training programme, the Ministry set the 1-3-1 goal, i.e.
each laid-off employee in an enterprise re-employment
centre is entitled to one occupational guidance interview
free of charge, three briefings of employment information,
and one training opportunity free or partially free of
charge. Vocational training centres, technical training
schools under labour and social security departments,
other training institutions, including those run by NGOs,
the trade unions, the women’s federations, and youth
leagues, were the major institutions undertaking re-
employment training workshops.
4.23 An important feature of this programme is that
thi s trai ni ng i s extended expl i ci tl y to those whose
economic position is below the socially acceptable levels.
For example, in a certain province, those eligible for this
training were whose family average income is lower than
the standard which qualifies for social assistance, or who
are under a certain age (40 for males, 35 for females),
and they can attend one vocational training course that is
longer than a month, free of charge, if they can pass a
given test. I n another province, re-employment training
and service are linked with the provision of basic living
allowance in an effort to change the provision of basic
living allowance to the provision of training opportunities
and jobs. I t is reported that about 75-80 per cent of the
trainees can find satisfactory jobs or start up their own
businesses. By the end of 2000, a total of 13.6 million
laid-off employees, 11 per cent more than the set target,
had been exposed to re-employment training.
4.24 Another major informal sector training initiative
from China consists of the China Rural Employment
Promotion Project. The participants are mainly local
households in selected counties where micro-loans are
provided as a means of supporting low-income households
to be self-employed or to form partnerships in starting
small businesses. The project provides vocational training
to applicant households, helps them to make a business
plan, and provides micro-lending and assistance in their
business operations.
4.25 A flexible skills training is an essential part of
the project which focuses on resident communities and
households So training courses are organised near where
they live. This enables training courses to be closely linked
to local requirements. I t combines theoretical teaching
with practice, classroom presentation with follow- up
and collective teaching with individual tutoring and
combines training with employment support. The project
also combines training with local industrialization. There
are examples of counties that offer up to 3,000 Yuan to
rural households that are willing to have jobs locally.
This financial support helps them to be self-employed.
I t also serves as a launching fund to help them start up
their own businesses. They are also entitled to preferential
policies as they can be exempted from some fees and get
free access to some facilities.
4.26 Kenya’s J ua Kali (i nformal sect or) proj ect
( Johanson & Van Adams, 2004), funded by I DA, is a
well-quoted informal sector training initiative that is
oriented entirely towards markets. I t was aimed at: (a)
providing skills and technology upgrading for about
25,000 i nformal sector manufacturi ng workers; (b)
increasing the access of informal sector entrepreneurs to
services; and (c) improving the policy and institutional
environment by removing restrictive laws and policies.
A key feature of the project is a voucher programme
intended to introduce consumer choice, enabling informal
sector operators to purchase the training wherever they
want. I ntermediaries / allocation agencies were selected
by competitive tender to market, allocate, and redeem
vouchers i n a decentrali zed way throughout Kenya.
Allocation agencies received a fee equal to 3 per cent of
the value of vouchers issued. Vouchers could be used for
any kind of training from any registered training provider.
Over the course of the project, about 700 training providers
became pre-qualified for providing training. By early 2001,
some 18,000 training vouchers had been issued.
4.27 The impact of the project, evaluated through
two studies, has been highly positive for the beneficiaries.
Employment among the graduates had increased by 50
per cent compared with employment before training, and
the income of surviving enterprises had also increased
by 50 per cent. According to anecdotal evidence, some
43
participants who received a voucher for basic training
have paid the full cost of more advanced training. One
unexpected outcome of the voucher training programme
was the emergence of a new kind of training provider -
the skilled master craftsperson. The strong preference of
Jua Kali workers for appropriate, accessible training by
master crafts persons was revealed in the first phase of
the project: 85 per cent of all vouchers went to pay for
the services of master crafts persons, and only 15 per
cent went to private and public training institutions.
4.28 Some important lessons include:
(a) The use of a voucher mechanism enabled the
proj ect t o st i mul at e demand for t rai ni ng,
t echnol ogy, management and market i ng
consultation among micro and small enterprises.
A supply response has been generated and a
training market established to address the needs
of micro enterprises.
(b) An unexpected impact of the voucher training
programme was t he emergence of ski l l ed
craftsmen as the leading providers of training.
Entrepreneurs preferred the training services of
master crafts persons in the informal sector to
training in formal institutions. The training
by master crafts persons was usually well adapted
to the entrepreneurs’ need for short duration,
practical training. These training providers were
previously invisible to agencies that wished to
pay for these trainings directly.
(c) The implementation experience underscores the
importance/viability of appropriate management
arrangements - a project for the private sector is
best managed by t he pri vat e sect or, wi t h
government best playing a facilitator’s role.
Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences Lessons from International Experiences
4.29 Thi s chapt er has out l i ned t he maj or
characteristics of international skill development and
training experiences and systems. The review has brought
out the lessons that can be drawn for a country like I ndia
with a very large informal sector and massive numbers of
poorly educated people with a low level of formal skills.
4.30 I t has been seen that comprehensive systems of
skill development that exist internationally are primarily
f or t he f ormal sect or. I n count ri es of East Asi a,
characterized as state-led, demand driven systems, it is
universalisation of basic education, enlarging the coverage
of secondary education and developing a vibrant system
of vocational education that laid the foundation towards
speci f i cal l y t arget i ng ski l l s desi gned t owards t he
workplace. Strengthening the educational system and
universalizing access is thus an essential prerequisite for
widespread skill development, particularly when the skill
mix requires changes to accommodate the needs of greater
integration with the knowledge economy.
4.31 While training systems might be supported by
t he government , especi al l y i n a si t uat i on where
externalities limit the extent to which private initiative is
forthcoming, it is essential to tailor training to employment
as much as possible. Evolving systems of apprenticeship
and enterprise-based training that allow trainees to use
their skills, with suitable incentives provided to employers
and those trained, is essential. Further, training needs
assessment needs to be a joint exercise between those
who need trained manpower (employers), those who need
to be trained (workers) and those who evolve systems
and frameworks (the state), as successful experiences
demonstrate.
4.32 Further, in rapidly changing economies which
also undergo restructuri ng and retrenchment, large
numbers of workers who hitherto belonged to the formal
sect or woul d become i nf ormal sect or workers.
Programmes of retrai ni ng such as those i n Chi na
demonstrate that support from the government becomes
essential to equip workers to make themselves available
for the market by anticipating demand, which might not
automatically take place.
4.33 I nteresti ng experi ences of the programmes
designed explicitly for the informal sector in different
countries might offer guidelines for a country like I ndia
to design a system. For example, making the local area or
district the focus of training programmes for employment
as in China will enable a matching of needs of people
and that of the markets. Targeting training towards the
poorest households and linking it up with employment
in local areas is also a useful initiative for poor informal
sector workers.
4.34 The l essons from i nternati onal experi ences
notwithstanding, it also needs to be kept in mind that the
I n te rn a ti o n a l E xp e ri e n ce s o f S k i ll D e ve lo p m e n t & T ra i n i n g
44
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
need for I ndia is to achieve a major turnaround in its
skill profile. The sheer magnitude means that no single
experience might be directly relevant or replicable. This
is because the ‘initial conditions’ that I ndia is faced with
are very different from those that confronted either the
OECD countries or the East Asian economies as they
went about developing their skill and training systems.
These consist, first and foremost, of the preponderance
of the unorganised sector and informal employment in
the economy and an abysmally low level of formal skill
availability by even developing country standards. At the
same time, a fairly elaborate structure of institutions and
systems of education and training, exist in the country,
al t hough cat eri ng onl y t o a smal l segment of t he
population. So while international experiences can provide
ideas and guidelines on how to go about the formidable
t ask of expandi ng t he ski l l base of t he economy
substantially, the structure that needs to be evolved has
to be specific and keeping in mind the structure and
dynamics of the economy.
45
System of Skill Development
in India
5
5.1 Until now we examined the rationale and
requi rements of a sui table ski ll development
syst em for t he vast maj ori t y of t he I ndi an
workforce, located in the informal sector. We have
also traced the contours of the availability of skills
in the economy and the congruence between
poverty, low levels of educati on and the ski ll
deficit. These trends are seen despite a vast array
of institutions and initiatives over the entire post-
I ndependence period which have attempted to
address the issue of generating the requisite skill
base. I t is essential to review these systems that
exist as a result of direct state participation in the
skilling process as well as through various non-
state initiatives. This chapter evaluates separately
government and non- government ski l l
development systems that exist in I ndia. Various
programmes, their objectives, coverage, sectoral
focus and modes of imparting are evaluated.
5.2 I n I ndi a, ski l l format i on i s broadl y
through general education as a provider of generic
skills. Vocational education and training provide
marketable i ndustry speci fi c ski lls for better
employability. Other than basic primary education,
skill formation efforts consist of:
• Vocational education,
• Vocational training,
• Sector specific programmes to address
i ssues of ski l l f ormat i on and
enhancement
5.3 Wi t hi n vocat i onal t rai ni ng, we can
distinguish between the formal system and the
informal system, both of which take place under
the aegis of the government as well as private and
non-government agencies. Broadly, there are four
syst ems t hat cat er t o t rai ni ng needs: t he
government al f ormal t rai ni ng syst em, t he
governmental system that focuses exclusively on
the informal sector, the non-government (private
as well as NGO) network of formal trai ni ng
i nsti tuti ons and the non-government (mostly
NGO- l ed) pri nci pal l y non- formal t rai ni ng
programmes for the informal sector.
5.4 The Commission recognizes that these
are not wat ert i ght compart ment s. The
governmental systems rely on private or non-
governmental training providers and trainers and
there is a further step up in this direction as
governments i ncreasi ngly take on the role of
facilitators and coordinators. Further, as seen in
the previous chapter, systems of formal vocational
training, however limited they are in terms of
numbers i n compari son t o t he si ze of t he
workf orce, have resul t ed i n onl y a smal l
proportion of those trained being absorbed in the
formal sector of the economy. Others, who have
been formally trained, in fact, find jobs in the
i nformal sector, possi bl y i n the upper rungs,
const i t ut i ng i n f act a part of t he i nf ormal
workforce, apart from the informally trained and
untrained part of the workforce.
46
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Part A: Governmental Initiatives
5.5 I n the present section we focus on governmental
i ni ti ati ves, both formal and i nformal , whereas the
following one looks at the initiatives by the private sector
and NGOs. At present, the total training capacity of the
public sector is estimated to be around 3.8 million. The
details are given in appendix 5.1 to the Chapter.
Vocational Education
5.6 Vocational education remains within the broader
school curriculum and involves provision of specific skills
to increase employability of the students on completion
of formal education. Vocational training is especially for
a particular trade or economic activity and is conducted
outside the schooling system. Box 5.1 illustrates the
progress in vocational education in I ndia.
5.7 There are t hree cat egori es of vocat i onal
education prevalent in I ndia today - at the lower school
and 10+2 stages and at the specialised level. The system
B o x 5 . 1 : Vo catio n al E d u catio n in I n d ian P lan n in g
I n 1947, there were only 46 engineering colleges and 53 polytechnics with an annual intake of 6,240 students.
Due to the initiatives taken during successive Plan periods, and particularly because of large-scale private sector
participation, the number of All I ndia Council of Technical Education (AI CTE) approved technical and
management institutions has risen to 4,791 in 2001-02 with an annual intake of 6.7 million students.Almost every
Five Year Plan contributed to the strengthening of the vocational education system in the country. The Second
Five Year Plan, for example, provided for the establishment of 38 junior technical schools for students in the age-
group 14-17 and these numbers kept on increasing in the subsequent years. Vocationalisation of education at the
higher secondary stage was one of the important reforms included in the Sixth Plan. Measures were initiated to
establish the necessary links combining vocationalisation, skill training, in-plant apprenticeship and placement in
gainful employment as composite parts of an integrated effort to raise the level of utility of the programme, and its
wider acceptance and success. I n the following Plans, facilities for vocational education were diversified into
commerce and services. During the 9th Five Year Plan, the scheme for Vocationalisation of Education at 10+2
stage was introduced to regulate admissions at college level. The purpose was to divert at least 25 per cent students
of 10+2 stage to self-employment or wage-employment, while providing them with vocational competence in a
field of their choice.
The Tenth Plan has emphasized that vocational system should be a separate stream within the secondary education
system, rather than being imparted through separate educational institutions. I t should also establish greater
linkage with vocational training and academic education to provide for vertical mobility for students aspiring for
higher professional programmes in polytechnics, universities and engineering colleges.
The Eleventh Five Year Plan has recognised the importance of expansion and strengthening of the system of
Vocational Education and Training (VET) in the country. I t, inter-alia, provides for expansion of vocational
training, modernizing I TI s, adding relevant skills, and public-private partnership model for training.
of vocational education is administered by the Ministry
of Human Resource Development. At the lower school
stage, a scheme of pre-vocational education at lower
secondary level was started in 1993-94 to impart simple
marketable skills and to develop vocational interests.
The centrally sponsored scheme of Vocationalisation of
Secondary Education at +2 level is being implemented
since 1988. The main objective of the scheme is to
enhance individual employability, reduce the mismatch
between demand and supply of skilled manpower and
provide an alternative for those pursuing higher education
without particular interest or purpose. The scheme is
implemented in both formal and non-formal sectors. I n
the formal sector, the scheme is implemented by the State
Governments at +2 stage of 10+2 scheme, through 9500
schools spread all over the country. The total training
capacity is estimated at about 10 lakhs per annum. More
than 150 courses are offered in 6 major disciplines covering
the broad areas of agriculture, business and commerce,
engineering, technology, health and paramedical services,
47
home sciences and services. These courses are selected
on the basis of the assessment of manpower requirements
through district vocational surveys. After the completion
of a two-year course, the students can undergo a year’s
apprenticeship under the Apprenticeship Act.
5.8 The vocational education system suffers from
def i ci enci es such as a l ow component of general
education, poor linkages between the vocational education
and general education streams and between the vocational
education and vocational training streams. Further, the
system of basic education itself needs to be strengthened
in the interests of skill acquisition. Education being a
foundational skill, the focus on skills needs to start at the
level of basic education through enlarging access and
improving quality.
5.9 I t also needs to be noted that although the links
between vocational education, vocational training and
actual employment are considered to be weak, there is a
paucity of information from the labour market. This has
to be addressed adequately through evolving effective
systems of feedback.
Vocational Training
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining P aining P aining P aining P aining Pr rr rrog og og og ogr rr rrammes ammes ammes ammes ammes
5.10 The Ministry of Human Resource Development
and the Ministry of Labour and Employment are the
two major Ministries responsible for formal skill training.
While the Ministry of Human Resource Development
coordi nates the development of techni cal educati on
through degree courses, diplomas and certificates offered
by universities, technical institutions and polytechnics,
the Ministry of Labour coordinates the development of
techni cal educati on through the I ndustri al Trai ni ng
I nstitutes and the I ndustrial Training Centres, as also the
industrial apprenticeship system discussed below. Formal
vocational training system demands a minimum level of
education, generally higher secondary in the case of the
systems coordinated by the MHRD and middle school
in the case of the training systems coordinated by the
MOLE, which , automatically implies the exclusion of
those with lower levels of education.
5.11 Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development: Ministry of Human Resource Development:
Polytechnics offer diploma-level courses to meet training
needs of manpower for industry at the supervisory level.
The All I ndia Council of Technical Education (AI CTE)
approves di pl oma programmes i n engi neeri ng and
architecture, hotel management and catering technology
and pharmacy. There are 1244 polytechnics run by HRD
Ministry with a capacity of over 2.95 lakhs offering three-
year diploma courses in various branches of engineering
with an entry qualification of High School. Besides,
there are 415 institutions for Diploma in Pharmacy, 63
for Hotel Management and 25 for Architecture.
5.12 Minist Minist Minist Minist Ministr rr rry of y of y of y of y of Labour and Emplo Labour and Emplo Labour and Emplo Labour and Emplo Labour and Employment: yment: yment: yment: yment: The two
flagship schemes of Directorate General for Employment
& Training under Ministry of Labour and Employment
are: Craf t smen Trai ni ng Scheme (CTS) and
Apprenticeship Training Scheme (ATS). The CTS
provi des i nst i t ut i onal t rai ni ng whereas ATS i s a
combination of institutional as well as on the job training
i n whi ch trai nees are exposed to real li fe i ndustri al
environment.
5.13 Cr Cr Cr Cr Craftsmen aftsmen aftsmen aftsmen aftsmen T TT TTr rr rraining Sc aining Sc aining Sc aining Sc aining Scheme(C heme(C heme(C heme(C heme(CTS): TS): TS): TS): TS): The CTS
is implemented through 1987 I TI s run by the state
governments. I n addition, 4847 I TCs in the private
domain implement the CTS on the same pattern as I TI s.
Training courses are available in 110 trades. The courses
aim to impart the basic skills and knowledge so as to
prepare the trainees both for wage employment as semi-
ski l l ed worker or Juni or Execut i ves or f or sel f -
employment. The entry level quali fi cati ons for the
trainees are: Age 14 to 40 years no upper age limit for
women in women exclusive I TI s/women wings in general
I TI s and education of 8
-
-12
th
class. The duration of the
training varies from six months to 3 years depending on
the trade chosen. A total of 9.33 lakhs training seats are
available at the I TI s throughout the country (Government
I TI s – 4.06 lakhs and private I TCs – 5.27 lakhs). Over
47,000 seat s are excl usi vel y f or women t rai nees.
Reservat i ons f or SC / STs, di sabl ed, OBCs, ex-
servicemen etc. are made as per government directives.
About 70 per cent of the training period is allotted to
practical training and the rest to subjects relating to trade
theory, workshop calculation & science, engineering
drawing & social studies. There is also the provision for
grant of stipend and workshop uniform to all the trainees
of Govt. I TI s.
S yste m o f S k ill D e ve lo p m e n t in I n d ia
48
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.14 All I ndia Trade Tests of Craftsmen is conducted
under the aegis of the National Council for Vocational
Training (NCVT) and successful candidates are awarded
National Trade Certificate (NTC) which is recognized
for the purpose of recruitment to subordinate posts and
services under the Central Government.
5.15 Apart from I TI s/I TCs, Craftsmen Training in
22 trades is also imparted through 6 Model Training
I nsti tutes (MTI s) attached to 5 Advanced Trai ni ng
Institutes (ATIs) and one Central Training Institute (CTI)
under the DGE&T. Besi des, Nati onal Vocati onal
Training I nstitute (NVTI ) and 10 Regional Vocational
Training I nstitutes (RVTI s), with about 3000 training
seats, have been imparting training exclusively to women.
I n order to reorient the training modules as per the
changing skill requirements of the industries, Craftsmen
Trai ni ng on modular pattern i s offered i n 4 Model
I ndustrial Training I nstitutes (MI TI s) under DGE&T.
5.16 A AA AAppr ppr ppr ppr pprenti ceshi p enti ceshi p enti ceshi p enti ceshi p enti ceshi p T TT TTr rr rrai ni ng Sc ai ni ng Sc ai ni ng Sc ai ni ng Sc ai ni ng Scheme heme heme heme heme: :: :: Formal
apprenticeship, introduced through the Apprenticeships
Act of 1961, requires employers in notified industries to
engage apprenti ces i n speci fi ed proporti ons of the
workforce Apprentices obtain training for periods ranging
from six months to four years at the end of which they
are tested by the NCVT. The successful candidates are
awarded Nat i onal Apprent i ceshi p Cert i f i cat es.
Apprenticeship Training for the school leavers and I TI
passed out persons is offered through a network of 23,800
establishments in 187 designated trades. As on 30
th
June,
2007 1,85,224 training seats for the trade apprentices
have been utilised against 2,58,163 seats identified. The
training is designed to utilize fully the facilities available
in industry for imparting practical / on-the-job training
in the industrial environment to the apprentices to enable
t hem meet t he requi rement s of t he i ndust ry f or
employment. All I ndia Trade Tests (AI TT) for trade
apprentices are conducted twice a year, and National
Apprenticeship Certificates (NACs) are awarded. Stipend
is paid as per the Government notification. Six Regional
Directorates of Apprenticeship Training (RDAT) at
Mumbai, Kanpur, Faridabad, Kolkata, Hyderabad and
Chennai , have been set up for i mpl ement i ng t he
Apprenticeship Training in the Central Government
PSUs/Establishments.
5.17 Assessments of formal training systems in I ndia
often argue that the qual i ty of vocati onal trai ni ng
institutions is not very good. Evaluations of the I TI s have
shown that there is a great variability in the quality of
different I TI s reflecting differences across states and also
the characteristics of individual I TI s. Many states have
encouraged the creation of new I TI s to cover new areas
but without adequate preparatory work or resource input
or effective follow up action. The following deficiencies
have been noted, with different points being emphasized
in different reports, by the Special Group on Targeting
Ten Million Employment Opportunities per year over
the Tenth Plan period set up by Planning Commission,
under the Chairmanship of Dr S P Gupta, Task force on
Empl oyment Opport uni t i es set up by Pl anni ng
Commission, under the chairmanship of Shri Montek
Singh Ahluwalia, the National Knowledge Commission,
the Eleventh Five Year Plan and the Task Force on Skill
Development.
• Much of the training provided in the I TI s is
for skills for which there is little demand. The
curriculum has not been revised for many years
and was therefore not attuned to current market
requirements. Some revision has taken place
recently but a lot remains to be done. One reason
for the lack of attention to market requirements
is the lack of involvement by the industry in
the management of the I TI s.
• The transfer of skills too needs improvement
and the testing process at the end needs to be
made more reliable. All Government I TI s and
private I TI s affiliated with the NCVT as well
as t he pri vat e t rai ni ng i nst i t ut es runni ng
DOEACC accredited courses rel y on formal
cert i fi cat i on by an i ndependent aut hori t y.
However, t here i s wi despread percept i on
amongst empl oyers t hat st udent s obt ai n
cert i f i cat es even t hough t he act ual ski l l s
acquired are very poor.
• The facilities and infrastructure in most I TI s
are i nadequate, wi th obsolete equi pment i n
laboratories and workshops. Maintenance is also
poor. These deficiencies reflect the scarcity of
resources with the state governments in I ndia.
49
They have been exacerbated by the tendency
to create new institutions in places where they
do not exist, even though existing institutions
are under-funded and under- utilised.
• There is shortage of suitably trained faculty in
most I TI s.
• There is hardly any follow- up of the trainees,
and the courses remai n rather obsolete and
pi ecemeal. Placement of graduates i s not a
certainty.
• Most of the I TI s in the state sector and the
institutes for advanced training and training of
instructors under the Ministry of Labour, are
organi sed as subordi nat e of f i ces of t he
Government . These t rai ni ng and t rai ni ng
related establishments should be restructured
as “autonomous bodies”.
• The apprenticeship scheme too has its own share
of problems. The major problem relates to the
quality of training, which varies according to
the nature of the firm. Bulk of the apprenticeship
places are in public sector firms. Private sector
f i rms general l y do not compl y wi t h t he
requirements. One of the problems that have
arisen is that apprentices view apprenticeship
pri mari l y as an avenue f or subsequent
employment rather than a mode of training.
Although the law clearly does not entitle them
to employment, the courts have interpreted the
law to mean that apprentices must get preference
i n empl oyment opport uni t i es wi t hi n t he
company where they were trained. This tends
to discourage employers from fulfilling their
obl i gat i ons under t he Act . The Worl d
Employment Report (I LO, 1998- 99, p.70)
notes that training systems in I ndia are a typical
example of Central Government driven, supply-
led ones, with the Government taking on the
pri me responsi bi l i t y for t he formal sect or
training in training institutions. There is little
or no pressure on empl oyers to trai n. The
Government of I ndia too accepts this position
(GOI , 2001, p.6.23). I t has been noted by the
Second National Commission on Labour that
t he apprent i ceshi p syst em has i nadequat e
coverage of ski l l requi rement s, mi smat ch
bet ween demand and suppl y and l ack of
f l exi bi l i t y i n t he engagement of t rade
apprentices within the same trade group. I t has
also been argued that a predominant proportion
of the educational and training resources of the
formal i nst i t ut i onal st ruct ure i s somehow
directed to the formal sector and the ‘upper end’
of medium and small-scale enterprises, many
of them in the informal sector. There is a strong
orientation towards the use of machines, a very
marked gender division of training and curricula
(an assumption that girls will go for beautician
courses whereas boys will be fitters and motor
mechanics). Further, the numbers trained are
very low, as chapter 3 showed.
5.18 Several initiatives have been taken to strengthen
the I TI system. These include: (i) Establishment and
upgradation of I TI s in North-Eastern States, Sikkim and
State of Jammu and Kashmir, (ii) Upgradation of 500
I TI s (100 from domestic funding and 400 from World
Bank assistance) into Centres of Excellence and (iii) Up-
gradati on of the remai ni ng 1396 Government I TI s
through Public Private partnership by providing interest
free loans up to Rs. 2.5 crores per I TI .
5.19 The government training/skill-building efforts,
such as the ones outlined above, have not been directed
explicitly towards the informal sector, or at least not
towards the most vulnerable informal workers. The above
review of the governmental system of formal training
demonstrates this. This has also been emphasized by the
Second National Commission on Labour, which notes
that the structural characteristics of the informal sector
require specific interventions that take on board these
charact eri st i cs. However, t he di st ri ct l evel st udi es
conducted by the Commission show that very large
numbers of people who pass out of I TI s, i.e., those who
receive formal training either start their own enterprises
or go for wage employment in informal sector. However,
what is required are training schemes that take on board
structural characteristics of the informal sector and target
those at the lower ends.
5.20 I nitiatives that target the informal sector are
discussed in the following paragraphs.
S yste m o f S k ill D e ve lo p m e n t in I n d ia
50
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Informal Government Training Programmes
5.21 A large number of ministries / departments,
commi ssi ons, counci l s, aut onomous bodi es and
institutions as well as such bodies where there is a public-
private partnership undertake informal skill development
programmes which are targeted at either the smaller
formal sector enterprises or the informal sector workers.
Most of these schemes and programmes are administered
at the fi eld level by the respecti ve departments and
agencies of the Central/state governments or other non-
government organisations identified for the purpose. The
funds flow downwards and the state governments are
usual l y assi gned the task of i mpl ementi ng as wel l
monitoring the skill formation programmes on a routine
basis. Alternatively, there are a number of programmes
for which the voluntary organisations are also entrusted
the task directly by the Central Government departments.
5.22 The multiplicity of ministries, institutions and
agencies that cater to skill development presently results
in a plethora of initiatives that run independently with
little coordination or standardisation. The initiatives by
different ministries vary depending on their mandate, but
the effect often remai ns pi ecemeal, although i n the
aggregate, the system is very large. Thereneedsto bea
coordinating systemthat attemptsto dovetail and consolidate
theseseemingly disparateprogrammeswith common objectives.
Recent policy responseshavemoved in thisdirection.
5.23 Some of the major programmes/schemes under
the aegis of different ministries under the governmental
system that focus on skill development based principally
on the needs of the informal sector are summarized below.
Ministry of Human Resource Development
5.24 Community Polytechnicsas a scheme started in
1978-79 under direct Central assistance by Government
of I ndia to harness the scientific / technical knowledge
available with the polytechnics to secure community /
rural development. Community Polytechnic activities are
a part of an existing AI CTE approved polytechnic. The
polytechnic is entrusted to undertake rural / community
development acti vi ti es i n i ts proxi mi ty through the
application of science and technology, making use of
infrastructure available in polytechnics. Presently, 669
diploma level institutions are implementing the scheme
of Communit y Polytechnics training about 3,31,000
trai nees a year. The mai n acti vi ti es of Communi t y
Polytechnics are:
a) To provide training in need based, non-formal
skills/trades to unemployed youth, women, SCs/
STs, mi nori ti es, school dropouts and other
disadvantaged sections of the community to
enabl e t hem t o obt ai n gai nf ul sel f / wage
employment .
b) To devel op and i mpl ement i nnovati ve and
economical ideas for rapid adoption of the latest
technology by the community in and around
t he communi t y pol yt echni c (Technol ogy
Transfer).
c) To provide technical/ support services to the
rural community.
d) To di ssemi nat e i nf ormat i on and creat e
awareness regarding latest technology and its
applications among the community.
e) To undertake survey for ascertaining the felt
needs of t he communi t y wi t h regard t o
manpower training and adoption of affordable
technology by the community.
5.25 There is no age and qualification bar for the
trainees under the scheme. The skill development is
imparted through short term training courses of 3- 6
months duration. However, no course fee is charged from
the trainees.
5.26 Jan Shikshan Sansthan (JSS) is an institutional
framework for offering vocational training programme
to disadvantaged groups of adults such as neo-literates,
less-educated slum dwellers, SC and ST and women etc.
to raise their efficiency and increase their productive
ability. I t also provides academic and technical resource
support to District Literacy Societies (Zilla Saksharta
Samitis). NGOs having a three year old track record are
identified for the implementation of such programmes
as may be needed. Based on their location and past
performance, JSSs are grouped in three categories and
provided financial assistance accordingly.
5.27 National I nstituteof Open Schooling (NI OS)
[Continuing Education and DistanceLearning]: was set up
in 1989 as an autonomous organization with a view to
51
provide a flexible educational opportunity for persons who
wish to study and qualify for a better tomorrow. NI OS
desi gns i ts own curri cul um, prepares i nstructi onal
materi al s i n pri nt and el ectroni c modes, conducts
examination and certifies students up to pre-degree level.
5.28 Keeping in view the needs of target groups, the
thrust is on providing more vocational and community-
oriented courses in addition to general and academic
courses. NI OS offers several vocational courses up to
pre-degree in the broad areas of Agriculture, Engineering
and Technology, Health and Paramedical, Home Science,
Computer Science and I nformation Technology, Library
and I nformati on Sci ence, Busi ness and Commerce,
Secretarial Practice and other general, vocational and life
enrichment areas. The NI OS operates its Vocational
Education Programme through Accredited Vocational
I nstitutes (AVI s) and Special Accredited I nstitution for
Education of the Disadvantaged (SAI ED) catering to
the disadvantaged sections of the learners.
5.29 There are two types of Vocational Education
courses offered by NI OS: (a) Package courses consisting
of two or more modules / papers/subjects, a certificate
which can only be given after passing all the modules /
papers of a package course. The course is of a certificate
or diploma level having duration of 6 moths and more;
(b) Stand-alone vocational subjects / courses are primarily
offered through Accredited Vocational I nstitutes (AVI s)
and can be combined with academic subjects along with
a facility of credit transfer in lieu of one academic subject.
However, a stand-alone subject can also be offered
independently as a vocational course. As on February, 2007,
the country had 999 vocational NI OS.
Ministry of Labour and Employment
5.30 Skill Development Initiative(SDI) is a recent
scheme , initiated in 2007, as a five year project. During
this period one million persons would be trained or their
exi sti ng ski l l s tested and certi fi ed under Modul ar
Employable Skills (MES) framework. The objectives
of the scheme are (i) to provide vocational training to
school leavers, existing workers, I TI graduates, etc. to
improve their employability by optimally utilizing the
infrastructure available in govt., private institutions and
the industry. Existing skills of the persons can also be
tested and certified under this scheme, and (ii) to build
capaci ty i n the area of development of competency
st andards, course curri cul a, l earni ng mat eri al and
assessment standards in the country.
5.31 MES would benefit different target groups like:
(i) workers seeking certification of their skills acquired
informally, (ii) workers and I TI graduates seeking skill
upgradat i on, (i i i ) earl y school drop- out s and t he
unemployed, and (iv) previously child labour and their
families. The minimum age limit for persons to take
part in the scheme is 14 years but there is no upper age
limit.
5.32 The key features of the scheme are:
• Demand-driven short term training courses
based on Modular Employable Skills (MES)
decided in consultation with industry. MES is
the ‘minimum skills set ’ which is sufficient for
gainful employment.
• Central Government will facilitate and promote
training while industry, private sector and state
governments will train the persons.
• Optimum utilisation of existing infrastructure
to make training cost effective.
• Fl exi bl e del i ver y mechani sm (part t i me,
weekends, full time, onsite/ offsite) to suit needs
of various target groups.
• Different levels of programmes (foundation level
as well as skill up-gradation) to meet demands
of various target groups.
• The services of existing or retired faculty or
guest faculty to be utilized.
• Courses would also be available for persons
having completed 5th standard.
• Test i ng & cert i fi cat i on of ski l l s acqui red
informally.
• Testing of skills of trainees by independent
assessing bodies, which would not be involved
in training delivery, to ensure that it is done
impartially.
• The essence of the scheme is in the certification
that wi l l be nati onal l y and i nternati onal l y
recognized.
S yste m o f S k ill D e ve lo p m e n t in I n d ia
52
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.33 The t rai ni ng under SDI scheme wi l l be
provided by various VTPs under Central Government,
state governments, publ i c and pri vates sector and
i ndust ri al est abl i shment s. VTPs wi l l provi de
counselling and vocational guidance, training facilities
as per norms, impart good quality training, post training
support to trai nees i n getti ng employment, mai ntai n
data base on trai nees trai ned and the outcome of the
trai ni ng. They wi ll track the trai nees for three years
or ti ll they get gai nfully employed. VTP wi ll also be
requi red to have close networki ng wi th the i ndustry
for i mmedi ate placement of the trai nees. Fol lowi ng
cat egori es of Educat i onal and Trai ni ng I nst i t ut es
havi ng requi si t e faci l i t i es for conduct i ng t rai ni ng
courses woul d be el i gi bl e f or becomi ng VTP f or
conducti ng MES courses: (i ) I nsti tutes (i ncl udi ng
autonomous institutes) set up by Central Government
/ State Governments / UT Administrations, (ii) Private
I nsti tutes of repute affi li ated/ accredi ted to a Board /
Uni versi ty / Counci l (NCVT, AI CTE etc.) set up by
Cent ral Government / St at e Government s / UT
Admi ni st rat i ons, and (i i i ) Any ot her t ype of
i nsti tuti ons/ bodi es approved by Apex commi ttee
5.34 The trai ni ng fee has been set as follows: i .
Rs. 500 per module for modules havi ng durati on up
to 90 hrs; i i . Rs. 1000 per module for modules havi ng
durati on from 91 to 180 hrs; i i i . Rs. 1500 per module
for modules havi ng durati on from 181 hrs to 270 hrs;
v. Rs. 2000 per module for modules havi ng durati on
more than 270 hrs. Candi dates belongi ng to SC/ ST
category and women wi ll be gi ven relaxati on of 25
per cent i n trai ni ng fee. I n order to moti vate trai nees
to take the trai ni ng programme seri ousl y, trai ni ng fees
of all those trai nees who successfully complete the
trai ni ng would be refunded to them. Trai ni ng cost @
Rs 15/ - per person per hour wi ll be rei mbursed to
regi stered VTPs i n respect of those successful persons
who got training from it. VTPs will reimburse training
fee to the successful candi dates. A one ti me advance
of Rs. 3.00 lakhs wi ll be pai d to each govt. I TI so
that they can start courses under the SDI scheme.
Testi ng fee wi l l be Rs 500/ 800. The testi ng fee wi ll
be rei mbursed to all the successful persons who have
recei ved trai ni ng from approved VTPs.
Ministry of Micro, Small and Medium
Enterprises
5.35 Over the last several decades, the Mi ni stry of
Mi cro, Small and Medi um Enterpri ses (MSME) and
i ts fi eld i nsti tuti ons have been i mparti ng trai ni ng to
the new entrants to the workforce aimed at developing
ski lls, entrepreneurshi p and manageri al capabi li ti es.
Some of these programmes are di scussed below.
5.36 Entrepreneurship Development Programmes
(EDP) are bei ng organi sed by MSME- DI s as a
regular training activity to educate the youth on various
aspects that need to be taken i nto consi derati on whi le
setti ng up small scale enterpri ses. The durati on of
these trai ni ng programmes vari es from 2-4 weeks are
necessary wi th trai ni ng fee at Rs 100/ -. Trai nees from
weaker secti ons are gi ven a sti pend of Rs 500/ - per
trai nee per month. No fee i s charged from SC and
ST candi dates.
5.37 Entrepreneurshi p Ski ll Development
Programmes (ESDP) are targeted at trai ni ng unski lled
and semi - ski l l ed workers empl oyed i n smal l - scal e
i ndustri al uni ts i n new ski lls and/ or up-gradi ng thei r
techni cal ski ll and knowledge. However, some fresh
educat ed unempl oyed yout h al so part i ci pat e f or
learni ng the trai ts/ ski lls of vari ous trades i n order to
fi nd employment opportuni ti es or for starti ng thei r
own ventures. Efforts are made to organise tailor made
programmes for the ski ll development of the soci ally
di sadvantaged groups, parti cularly i n less developed
areas. The target group for these programmes are
SC, ST, OBC, women, mi nori ti es and other weaker
sect i ons. These are al so cal l ed ‘Out - reach
Programmes’ as they are conducted i n the rural/ less
developed areas. Trai ni ng programmes are of 6 weeks
durati on wi th trai ni ng fee at Rs 200/ -. Trai nees from
the weaker secti ons are gi ven a sti pend of Rs 500/ -
per trai nee per month. No fee i s charged from SC
and ST candidates. 46,418 persons were trained under
EDP/ ESDP i n 2007-08. Trai ni ng programmes are
bei ng conducted i n 60 di sci pli nes under EDP/ ESDP.
An amount of Rs 20 crores has been kept for ski ll
development programmes for 2008- 09 for trai ni ng
90,000 persons.
53
5.38 The Mi ni st ry of MSME has deci ded t o
implement the scheme of Entrepreneurship Development
Centres (EDCs) through Partner I nstitutes (PI s) in the
PPP mode t hrough t he Nat i onal I nst i t ut e f or
Entrepreneurshi p and Small Busi ness Development
(NI ESBUD). The scheme aims to develop such EDCs
in each block to cover about 15 lakhs youths every year
in addition to the 5 lakhs that the Ministry intends to
train through the existing programmes. The idea is to
identify institutes that can impart training by becoming
the Partner I nstitutes to provide Skill Development
Training in at least one identified product for each block.
5.39 The Mi ni st ry of MSME has proposed t o
promote skill development by setting up District Skill
Development Centres (DSDCs) in 6000 blocks of the
country. The DSDCs may be run by the Government
while 6000 block level SDCs may be run by PI s.
5.40 The various training programmes run by the
Ministry and the MSME-DI s are significant. However,
the linkage of these programmes with markets and the
private sector is yet to be fully achieved. Further, in many
of the targeted i ndustri es, i ndustri al organi sati on i s
characterised by clustering, which are administered by
the cluster development programmes whose linkages with
these schemes are often not cl ear. Exi sti ng cl uster
devel opment programmes focus more on hel pi ng
enterprises realise the importance of establishing linkages
with each other, on evolving common marketing facilities
and have relatively weak focus on skilling of the most
unskilled workforce.
5.41 Apart from the institutional training programmes
outlined above, there are several schemes that incorporate
elements of skill development. These are discussed below.
5.42 PrimeMinister’s Rojgar Yojana (PMRY) was
l aunched on 2nd October 1993 to assi st educated
unemployed youth to set up self-employment ventures.
I nitially, the scheme was implemented only in the urban
areas of the country. Since 1994-95, it is in operation in
both urban as well as rural areas. The Scheme also seeks
to associate reputed non-governmental organisations in
the implementation of PMRY Scheme especially in the
selection, training of entrepreneurs and preparation of
project profiles.
5.43 KVIC’s Rural Employment Generation Programme
(REGP) was launched with effect from 1st April, 1995
for generation of two million jobs in the rural areas of
the country. The scheme is applicable to all village
industries projects set up in rural areas. The eligible
agenci es under the scheme are (i ) i ndi vi duals (rural
arti sans/ entrepreneurs) i i ) i nsti tuti ons cooperati ve
societies, trusts & SHGS for projects up to Rs. 25.00
lakhs.
5.44 PMRY and REGP have been merged forming
Prime Minister’s Employment Generation Programme
(PMEGP) which is expected to increase the participation
by and coverage of rural beneficiaries by KVI C and state
government s i n a more f ocused manner t hrough
rationalized implementation, training, monitoring and
verification procedures to be piloted and coordinated by
KVIC.
Ministry of Housing and Urban Poverty
Alleviation
5.45 Swarna Jayanti Shahari Rozgar Yojana (SJSRY)
provides gainful employment to the urban unemployed/
underemployed by encouraging self-employment ventures
or provision of wage employment. The programme was
launched in 1997 with a fund support on 75:25 basis
between the Centre and the states. The programme is
applicable to all urban towns in I ndia and is implemented
on a whole town basis with special emphasis on urban
poor cl usters. The scheme consi sts of two major
components, vi z. (i ) The Urban Sel f Empl oyment
Programme (USEP), (ii) The Urban Wage Employment
Programme (UWEP). Salient features of the Urban Self
Employment Programme are:
• Assistance to individual urban poor beneficiaries
for setting up gainful self-employment ventures
• Assistance to groups of urban poor women for
setting up gainful self-employment ventures.
Thi s sub- scheme has been t i t l ed as “ The
Scheme for Devel opment of Women and
Children in the Urban Areas (DWCUA)”
• Training of beneficiaries, potential beneficiaries
and other persons associated with the urban
employment programme for upgradation and
acquisition of vocational and entrepreneurial
S yste m o f S k ill D e ve lo p m e n t in I n d ia
54
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
ski l l s. Trai ni ng i s i mpart ed i n t he I TI s,
pol yt echni cs, Jan Shi kshan Sanst hans,
engineering colleges or other training institutes.
• There is no minimum educational qualification
for beneficiaries under this program. However,
this scheme is not applicable to the persons
educated beyond the 9th standard. The training
and infrastructure support is as stated below:
- Training cost per person Rs. 2,000/-
- Training period 2-6 months
subject to a
mi ni mum
300 hours
- Tool kit worth Rs. 600/-
The annual targets under self employment under USEP/
DWCUA and skill development training under training
component have been fixed as 1,20,000 persons and
1,50,000 persons respectively in recent years.
Ministry of Rural Development
5.46 The Swarnajayanti Gram Swarozgar Yojana
(SGSRY) ai ms t o bri ng t he assi st ed poor fami l i es
(Swarozgaris) above the poverty line by providing them
income-generating assets through a mix of bank credit
and government subsi dy. The programme ai ms at
establishing a large number of micro enterprises in rural
areas based on the ability of the poor and potential of
each area. The SGSY is financed on 75:25 cost sharing
basis between the Centre and the states.
5.47 Training and capacity building of Swarozgaris
is an important component of SGSY, under which 10
per cent of the financial allocation is earmarked for training
and skill development. During 2007-2008 on an average
8.59 per cent of SGSY funds have been utilized for
training of Swarozgaris. At the national level, 15 per cent
of the funds under the programme are set apart for special
projects having far reaching significance and which can
act as indicators of possible alternative strategies.
5.48 As special projects, an innovative intervention
for demand-based skill development training projects for
increasing employability of rural BPL youth leading to
their placement or self employment has been taken up at
the national level. The emphasis of these projects is on
identifying demand driven skill sets in consultation with
the industry/potential employers in and around the project
areas and imparting training to rural BPL youth leading
to their placement on completion of training courses. The
processes involved in the model are partner / client
identification followed by market scan and curriculum
development, mobilisation, selection and training of rural
poor and their placement and tracking.
5.49 Realizing the great potential in this strategy, 12
Placement Linked Skill Development Projects have been
sanctioned with total project cost of Rs. 147.70 crores
and beneficiary coverage of 2.79 lakhs rural youth. The
average skill development training cost to be borne by
the Government in these projects is about Rs. 5,000/-
per head. Out of about 36,610 youth trained so far in
these projects, more than 27,465 have found employment
through successful placement at salaries ranging from
Rs. 3000 to 4000 per month bringing them above poverty
line. By March 2012, a total of about 2.5 million rural
poor are planned to be covered by the Ministry of Rural
devel opment t hrough si mi l ar ski l l upgradat i on
programme/projects with guaranteed placement.
5.50 The Ministry has successfully initiated a Skill
Development Programme for uneducated/low educated
unempl oyed BPL rural youth through partnershi p
programme with industry associations. A pilot project
has been initiated for garment industry in association with
I L&FS. To implement this programme, an SPV has
been formed cal led APTEX, whi ch i s managed by
i ndust ry represent at i ves and prof essi onal s. The
government. plays only a supportive role. After the pilot
phase, the programme would be expanded to cover at
least 5 lakhs BPL youths with 100 per cent placement
guarantee. Similar initiatives are being worked out for
other sectors like textiles, leather, footwear, retail, etc.
The Mi ni st ry al so part ners wi t h banks f or t he
RUDESETI model as discussed in the next para.
5.51 The Department of Rural Development had
proposed setti ng up Rural Devel opment and Sel f-
Employed Training (RUDSETI ) type institutes in all
the districts in the country to provide skill training to
rural poor. The first RUDSETI was established at Ujire,
Karnat aka, i n 1982 j oi nt l y by Sri Dharmast hal a
Manjunatheshwara Educational Trust, Syndicate Bank
55
and Canara Bank. I t chalked out an innovative approach
to help the rural youth stand on thei r own feet by
identifying opportunity avenues, train participants in
developing the desired skills and assist them in their
entrepreneurial activit y. RUDSETI has developed a
highly successful training module benefiting over 150,000
trai nees. Over 66 per cent of the trai nees have all
successfully established entrepreneurial ventures. I n the
pre-training phase of the programme, candidates are
selected on a scientific assessment of their abilities. The
selected candidates are then given inputs on motivation,
conviction, entrepreneurial competence and technical skill
and know-how in the selected fields. Later, the training
familiarizes them with the steps needed to set up their
own business. The final phase covers several aspects of
management. Apart from their educative and qualitative
programme, the organisation is in constant touch with
its students and is willing to support them for 2-3 years
even after their training. RUDSETI also provides a
helping hand to the candidates to come through their
initial struggles in their ventures. The trainees maintain
a good rapport with the RUDSETI even after their
training and constantly seek guidance. Keeping in view
the fact that most of the unemployed youth are from
poor/middle class rural families, entire training is provided
free of cost including free boarding and lodging.
5.52 Some of the typical EDPs for first generation
entrepreneurs are:
• Agricultural EDPs - Agricultural and allied
act i vi t y, dai ry management , bee- keepi ng,
horticulture, mushroom cultivation etc.
• Product EDPs - Dress designing for men and
women, rexin based utility articles, agarbatti
manufacturing, woollen knitting, bag making,
fabricating cane furniture, bakery products etc.
• Process EDPs - Repairs of two-wheelers, pump
sets, radio, TV etc., motor rewinding, multi-
purpose mechani c, beaut i ci an course,
phot ography and vi deography t echni ques,
screen printing and photo lamination, watch and
mobi l e repai r, repai r of domesti c el ectrical
appliances, computer and desk top publishing
(DTP) etc.
5.53 The above are only a synoptic view of the existing
schemes for skill development and training that have been
initiated by Government of I ndia. As mentioned earlier,
a number of other mi ni stri es/ departments are al so
associated with skill development programmes which are
catering to the requirements of specific sectors and target
groups. For instance, the Development Commissioner
(Handlooms) under Ministry of Textiles provides training
to the handloom weavers. I t has a number of Weavers
Service Centres in various parts of the country which
provide services to the handloom weavers. Similarly,
Development Commissioner (Handicrafts) is conducting/
supporting various promotional programmes for the
handicrafts sector which include skill development /
upgradation of artisans. Nehru Yuvak Kendra Sangathan
(NYKS) under Ministry of Youth Affairs and Sports has
500 district level offices which, among others, conduct
programme to improve the vocational skills of rural youth.
5.54 The Mi ni st ry of Women and Chi l d
Development is implementing a number of programmes
aimed at training women in marketable trades and enable
them to access remunerative employment opportunities
or help them in setting up their own businesses. The
Department of Science and Technology had initiated
Vocat i onal Trai ni ng for Empl oyment Generat i on
(VoTEG) in January 2000 with support from UNDP to
target the informal sector for training. The project evolved
into SKI LLS Project which takes a lead in adapting and
implementing the ‘franchise model’ to skills required by
the target segment of resource poor communities and
less educated persons. The Ministry of Agriculture is
training in the fields of agriculture/extension services,
horticulture, animal husbandry, dairying and fisheries.
The Nat i onal Rural Heal t h Mi ssi on and ot her
programmes of Ministry of Health and Family Welfare
have skill formation components built in to the overall
schemes. The Ministry of Tourism is associated with
training activities in areas of hotel management and
catering. The Ministry of Food Processing I ndustries
organi zes t rai ni ng programmes rel at i ng t o f ood
preservation and food packaging to impart vocational
abilities to the youth. I nstitutions like APEDA, NI D,
Coffee Board under Ministry of Commerce and I ndustry
have skill development components embedded in to their
programmes. Mi ni st ry of Soci al Just i ce and
Empowerment and Ministry of Minority Affairs have
training programmes to train people from their target
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
groups. I n addition to these, a large number of training
programmes are support ed by NABARD f or t he
agricultural sector and institutions such as NDDB which
work with informal sector workers.
State Government Initiatives
5.55 As ment i oned earl i er on i n t he chapt er, a
significant part of the implementation of national level
schemes takes place at the state level. I n addition, several
state governments have also initiated specific programmes
for skill development in the informal sector. I n Andhra
Pradesh, for exampl e, an Empl oyment Generati on
Mission has been set up in the last few years by the State
Government that works in a public-private partnership
mode with the Collectors and Project Directors of DRDAs
i n the di stri cts. Compani es such as G- 4 Securi tas
collaborate with the Mission in various ways ranging
from mentoring, providing human and financial resources.
A specific initiative that trained the rural youth in market
linked opportunities for entry level jobs in the service
sector resulted in placement with companies such as Mc
Donald’s, Café Coffee Day, Food World and so on.
Training programmes for self-employment that focus on
the informal sector are undertaken by schemes run by
the governments of several states such as Rajasthan,
Tripura and Maharashtra. States such as Orissa and
Jammu and Kashmir have specific training programmes
in the handicraft and artisanal sectors.
Conclusion
5.56 Our review demonstrates that thegovernmental
systemfor skill development and training, whilevast, is
dispersed and characterised by overlapsand multiplicity of
schemes. Further, thesystemthat isin existencefor theinformal
sector, whilerecognising someobviousneedsof thesector such
ascertification of trainees, accreditation of trainers, broad
basing and making flexibletheactual training imparted and
linking training to jobs, is again not conceptualised in a
comprehensivemanner. The Second National Commission
on Labour focuses its critique of existing systems on these
characteristics, which this Commission also seeks to
emphasise. Specifically, it is stressed that theformal and
informal systemsof skill development need to beintegrated
with training being competency based, flexible, allowing easy
entry and exit to traineesat different pointsin their livesand
being subject toformal systemsof accreditation and certification.
5.57 At the level of implementation, the district level
st udi es conduct ed by t he Commi ssi on i n Sehore,
Allahabad, Shillong and I mphal show that, in spite of
all the above menti oned schemes, both formal and
i nformal, bei ng i n operati on to di fferent degrees i n
different places, the present facilities to impart skill
development to workers are grossl y i nadequate. For
example, in Allahabad, it was seen that at present only
12 - 15 thousand workers are trained every year with the
contribution of the government system being about 55
per cent and private sector about 30 per cent while NGOs
provide training to about 15 per cent workers. I n Sehore,
of an estimated 2.18 lakhs workers, who require training,
the existing capacity can cater only to a few thousands.
Part B: Part B: Part B: Part B: Part B: Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves Pri vate and NGO I ni ti ati ves
5.58 Review of governmental initiatives towards skill
building, both in the formal and informal sector in the
previous section, revealed the contours of the largest
system of skill development in I ndia. As was pointed out
in chapter 2 a significant proportion of the workforce
also gets trained in the private sector. The present section
reviews some of the initiatives of the private and NGO
sectors. The focus is on drawing out the salient features
of such initiatives.
Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng Pri vate Sector I ni ti ati ves for Ski ll Bui ldi ng
5.59 Broadl y, the private sector initiatives can be
categori sed i nto four types. Fi rst i s where pri vate
entrepreneurs or corporates establish training centres/
institutes on a for-profit basis. Second, private corporations
impart training to people who are absorbed as skilled
workforce in their own production units. Third is where
they enter into partnerships with public agencies and
become the vehicles for training delivery and sometimes
finance. Fourth, corporate houses set up public trusts or
foundations with a development agenda to build the
capacities of local communities to be self reliant systems
that utilize human and physical capital in a sustainable
manner as an integral part of their ‘corporate social
responsi bi l i t y’ (CSR) mandat e. Here, we bri ef l y
summarise some of the major initiatives taken by the
private sector.
5.60 Examples of the second kind of initiative, where
ski l l ed manpower trai ned by a pri vate company i s
57
absorbed within the company itself, are by companies
such as Group 4 Securitas, Reliance and Kingfisher.
Kingfisher runs a training academy (Kingfisher Training
Academy) that caters to the hospitality industry, including
aviation, tourism and hotels. I t runs training modules of
roughly a year’s duration that train young people as
airhostesses, flight stewards, and workers in the hospitality
sector. Reliance I ndustries has started an initiative called
Reli ance Global S Reli ance Global S Reli ance Global S Reli ance Global S Reli ance Global Ser er er er ervi ces vi ces vi ces vi ces vi ces to provide job oriented call
center training. Group 4 Securitas conducts a two-week
training programme for security guards before they are
inducted into the workforce.
5.61 Examples of the third kind of initiative, involving
publi c-pri vate partnershi ps, are of the Constructi on
I ndustry Development Council (CI DC), which has been
set up jointly by the Planning Commission, Government
of I ndia and the I ndian construction industry. CI DC, a
group of industry and government representatives, has
undertaken a programme to assess, build and certify skills
in the construction trades so that the overall industry can
have access to skilled labour of certified quality. TATA
Motors has developed a training model in partnership
with the CI DC. This partnership has effectively become
a source of training for an entire automotive supply chain
linked to their branded vehicles. Though it was originally
developed as a closed programme that simply trained
students to build quality vehicles, TATA soon realized
the need to also train those who supplied the parts, sold
and repaired their cars. The unique feature of these
programmes is that they are private sector led, but not
designed exclusively for the benefit of the designers or
the funding organizations of the programme.
5.62 I n the previ ous chapter, we referred to an
initiative by the Andhra Pradesh Government involving
a public-private partnership for training the rural youth
for service sector jobs. This initiative, coordinated by the
State Government, has the private sector undertaking
training of youth for employment in the private service
sector in companies such as McDonalds, Café Coffee
Day, Food World, Futures Group, Pizza Hut, Microsoft,
Dell, Wipro and so on.
5.63 There are also several initiatives where private
foundations undertake training programmes as part of
corporate soci al responsi bi li t y of corporati ons. The
Ambuja Cement Foundation (ACF) is the development
initiative of the Gujarat Ambuja Cement Company and
works at 11 locations covering nearly 700 villages of eight
states. While some youth groups have been imparted
training on bamboo crafts and furniture making, others
were trained for repairs of TVs & mobile phones, driving,
masonry, electri ci an, motor mechani c, weldi ng and
fabrication, carpentry and plumbing. Some others were
provided training on small-scale enterprises, so as to
enable them to establish their own small business. The
efforts of ACF are to go beyond just imparting training
in skills that the work market requires; training them in
entrepreneurship is also provided. The youth are also
supported to learn the procedures of approaching banks
for loans and setting up their own enterprises.
5.64 The training initiative by the Confederation of
I ndian I ndustry (CI I ) is another example of the above.
With the focus on shifting training from employment to
employability perspective, the CI I is presently piloting
the ‘Skills Development I nitiative’ as a solution to deliver
a structured and scalable framework to impart skills to
the unemployed / underemployed / uncertified workers,
so that they develop as a quality human resource to meet
the dynamic needs of the growing economy. This has
been pi l oted i ni ti al l y i n 6- 7 urban as wel l as rural
locations. The trades in which skills are imparted are
chosen in response to the local demand requirements and
the growth potential. There is no condition in regard to
the social, economic or educational background of the
trainees, who are selected on the basis of their aptitude
and potential. Under this initiative, the skill-demand
assessment is carried out, then the programme module
formulated, along with identification of training centres
and trainers, and finally, delivery of the capsule modules
targeted to help the candidates gain employable skills.
The skill trades are classified into blue skills (agriculture,
heal t h care, securi t y servi ces) / rust col l ar ski l l s
(construction, minor engineering, transportation) / and
grey col l ar ski l l s (I CT) etc. The exi sti ng trai ni ng
infrastructure, such as that available at I TI s, engineering
colleges and vocational training institutes after regular
hours, is sought to be utilized optimally. Services of
faculty members of these institutions are utilized on an
honorarium basis. The duration of the training course is
3- 6 months. The contents of the trai ni ng can be
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
customized to meet the requirements of an employer, who
gives a firm commitment of employment.
5.65 A universal certification process is an important
component of this initiative. There is an independent
verification and a joint certification of the proficiency
acquired by the trainees for which the CI I has partnered
with City & Guilds. The certificate given by City &
Guilds is expected to have wide acceptability nationally
and i nternati onal l y and the CI I i s negoti ati ng an
arrangement with banks for underwriting a smart card
to be given to the successful candidates to help them get
financial linkages.
5.66 Another exampl e of a CSR i ni ti ati ve by a
corporate foundation is that of the Byrraju Foundation,
set up by the Satyam group of companies, which seeks to
providing training services in the areas of healthcare,
envi ronment , sani t at i on, and adul t l i t eracy. The
Foundation currently works to transform 156 villages in
5 districts of Andhra Pradesh and impacts 800,000 people.
5.67 Dr. Reddy’s Foundation, which is the Corporate
Social Responsibility wing of Dr. Reddy’s Laboratories,
a leading pharmaceutical company of I ndia, has started a
programme called Livelihood Advancement Business
School (LABS) which is a vocational and life skills
training model that provides job-based skill development
training to the poor youth in the age of 17-25 yrs over a
period of 3-4 months. I t is custom-designed for school
dropouts, unemployed secondary school graduates, street
yout h, ret renched workers, mi grant yout h and
resettlement communi ty members from the poorest
sect i ons of t he communi t y. Thi s demand- dri ven
programme has trained over 36,000 youth (between the
ages of 17 and 25) from the economically weak and placed
them in the salaried formal employment sector. Over
100 major national and international corporations and
busi ness organi zat i ons and over 4,000 l ocal smal l
businesses and medium enterprises have provided entry
level positions to the LABS alumni till date.
5.68 Private sector initiatives in skill building, as
demonstrated above, tend to be more linked to industry
demand and hence avoid the wastages associated with
supply-led initiatives. However, as has been mentioned
in chapter 2, these are likely to be forthcoming only in
response to existing demand and where skilling is likely
to have a direct link with profitability. For a large segment
of workers in the informal sector, these considerations
are not enough and their skilling needs go far beyond
those that are likely to be addressed directly by the private
sector. Some of these concerns are taken up through NGO
interventions which are described below.
NGO Initiatives in Skill Building
5.69 NGO interventions range from offering NCVT
approved formal I TI courses to a wide range of non-
formal courses. Typi cal l y, NGOs devi se thei r own
curricula, provide their own training and have their own
certification procedures. Very often, they have contacts
wi th empl oyers i n the nei ghbourhood areas whi ch
provi de placements for the trai nees. I t i s often also
reported that placement in jobs for those trained are high
and that trained workers earn higher wages. A review of
the working of the activities of the major NGOs initiatives
reveals that there are two types of approaches being
followed: (a) training only on basic or upgraded skills
and then leave the trainees to seek wage employment or
start their own enterprise, and (b) a ‘holistic’ package of
skill development, basic entrepreneurship training and
assistance in availing credit facilities etc. Some NGOs
even `handhold’ the trainees for a certain period. Some
of the major initiatives are summarised below.
5.70 Goodwill I nternational Association: Goodwi ll
I nternati onal Associ ati on, based i n Bangalore, was
establ i shed i n 1971 and i mparts ‘earni ng ski l l s’ to
unempl oyed youth and school dropouts i n vari ous
disciplines (at least 10
th
pass). Formal courses offered
for training are of the I TI s affiliated to the NCVT, which
comprise the fitter trade for boys and cutting and tailoring
for girls. The non-formal vocational courses include
fitting, welding, turning (boys), electrical and plumbing.
The non-engineering courses include literacy, health
educati on, craft (gi rls), medi cal attendant, machi ne
mechanism, electrical etc. Around 60 per cent of the
trainees under non-formal courses have been successful
in obtaining jobs in various industries either on their own
or through Goodwill’s association. With regard to formal
training for boys, the success rate in placement is 100 per
cent. Goodwill has contacts with a number of engineering
and garment industries and hospitals which help trainees
to secure a job after completion of training. Attempts are
59
made by the Association to find placements for trainees
in the industry as apprentices. Multi-skilling of the
trainees provides them with ample opportunities to learn
and move upward in employment hierarchy.
5.71 The trai ni ng manual for formal courses i s
provided by the Directorate General of Employment
&Training where as for non-formal courses the manual
is prepared by Goodwill which has its own trainers and
does not depend upon outsiders. For formal courses,
certificate is provided by the government and for non-
formal courses it is provided by the Association.
5.72 GramVikas: Gram Vikas is a secular, non-profit
voluntary organization working in Orissa with the needy
and weaker sections of the society to facilitate their
development. I t engages in activities aimed at improving
the living conditions and the economic standards of the
poorest of the poor. Gram Vikas provides training to
landless unskilled labourers in masonry, stone dressing,
wire binding, painting and plumbing. The target group
is the landless village youth working as unskilled labour.
Trained barefoot engineers and skilled masons contribute
towards projects implemented by Gram Vikas itself on
shelter related constructions works and also manage to
get gainful employment in and around the villages once
the project gets over. Skill training helps the people to
bargain and secure better wages for themselves. I t has
been observed that most of the skilled masons managed
to double their daily wage earning capacity over a period
of two years.
5.73 Gram Vikas has its own trainers to provide
training to the target group. Gram Vikas provides the
technical back up support and the necessary credibility
to trai nees to establi sh thei r own mi cro enterpri se.
Follow-up surveys are conducted by Gram Vikas after at
l east t wo years of t he compl et i on of t he t rai ni ng
programme. Gram Vikas awards Certificate to each
trainee on the completion of training.
5.74 An interesting NGO intervention that targets
the informal sector is that of Movement for Alternatives
and Youth Awareness(MAYA Organic. .. .. Maya Organic is a
not-for-profit company based in Bangalore working with
informal workers in about 52 slums. I t provides access
to the working poor to skills up-gradation and learning.
I t recognizes that the unorganised sector, the organised
industry and the markets - each has specific needs as
well as opportunities to offer and share with each other
for growth and development. The model takes advantage
of the large number of i ndi vi duals operati ng i n the
informal economy by bringing them together as collective
enterprises of 30-50 members / owners each to access
t he work opport uni t i es avai l abl e and by maki ng
continuous learning, social security and decent work
conditions as inherent part of the organizational structure.
I t distinguishes itself from the existing member-based
organizations in that all these collectives are profit centres
of a particular sub-sector enterprise, which in turn ensures
a certain visibility and organizational structure, thus far
missing in the unorganised sector.
5.75 Maya Organic has been working in 4 sub-sectors
and has regi st ered four ent erpri ses: l acquer ware,
const ruct i on (pai nt i ng, masonry, and carpent ry),
hospitality and services (domestic work, food industry
and public place maintenance as well as gardening and
waste management) and garments (home based garment
workers and embroi dery workers). Maya Organi c
encourages different kinds of vital networking between
the collectives and markets. One central activity is the
interaction with clients in the areas of information about
changing market demands and quality feedback related
to the products and services offered by the collectives.
Equally important is the continuous interaction with
resource pool (persons/ institutions/ material) which
support the collectives in the areas of training, marketing,
product and brand building and social protection; this
ensures continuous product and service upgradation for
better marketabi li t y. Thi s form of networki ng and
making the resource pool accessible to the collectives
not only facilitates the process of continuous reflection
on market t rends and changes but al so enhances
empowerment.
5.76 As an active marketing agency, Maya Organic
represents the various collectives under a brand in the
market, ORGANI C, that represent not just products/
services but rather a development brand. I t implies that
every product/ service bearing the ORGANI C label has
a developmental objecti ve and connotes good work
practices, high quality and professionally run collectives.
I t is responsible for developing and promoting the brand
identity across different markets and clientele through
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
building networks with clients. Maya Organic also has
a process of moni t ori ng t he col l ect i ves t o ensure
compliance with what the brand stands for.
5.77 I n addition, LabourNet, an institutional network
of markets and informal sector workers is a facilitating
structure that routes jobs to workers, encourages skill
development, influences policy and facilitates access to
social security schemes for the construction workforce
etc. I t has evolved from the experiences of Maya Organic.
5.78 Self Employed Women’sAssociation (SEWA) is an
organisation of poor and self-employed women workers
from the unorganised sector of the economy. SEWA’s
mai n goal i s t o organi ze women workers for ful l
employment and self reliance and believes in capacity
building as a strategy for making the poor women self-
dependent. SEWA has the experience of skill formation
in a variety of livelihood creation and supportive activities
by i mparti ng trai ni ng on techni cal, manageri al and
behavioural skills. For more than 32 years now, SEWA
has been working for poor, self-employed women in the
unorganised sector of rural and urban areas. Today more
than 9.6 lakhs poor women from five states of I ndia are
organised in the forms of Self-Help Groups (SHGs),
co-operatives, associations, federations and even corporate
entities. I t has formed producer federations in each of
the districts it works in.
5.79 The vari ous sectors where SEWA works i s
constructi on (masonry, bri ck work, pl umbi ng etc),
production of traditional craft work, management of water
supply by women, repairing & maintenance of hand pumps
and pipelines, provision of health related services, basic
skills in electrification, food processing and assembling
of solar energy equipments.
5.80 SEWA’s approach to organizing women for a
particular trade has been demand driven and need-based.
Even before designing the training modules, surveys are
conduct ed t o st udy t he member’s needs and ski l l
assessment exercises are carried out to identify the areas
where training is required. As a policy, SEWA uses
training modules and curriculum for training through
the SEWA Academy - the focal poi nt for workers’
education and capacity-building. Similar inputs are also
available from relevant sister institutions of SEWA.
Moreover, SEWA has district level teams of trainers and
coordinators who interact regularly and keep upgrading
the training modules.
5.81 So far as technical skill training is concerned
SEWA makes arrangements wi th external resource
organi zati ons and i ndi vi dual s, e.g. NI FT, Gujarat
Agriculture University, CIDC etc. SEWA has established
institutional linkages for various aspects of managing
women’s micro enterprises. Some of the institutions
include Mahila SEWA Sahakari Bank, I CI CI Prudential,
Gujarat Alkalies and Chemicals Ltd., Central Marine
and Salt Research Laboratory.
5.82 The above revi ew shows t hat t he non-
governmental initiatives, whether by the private sector
or by NGOs, address some of the deficiencies that exist
in existing government-led systems. They provide training
that is demand-led with signals being provided by the
market. However, as was noted earlier, going purely
through market signals will not address a lot of problems
of the informal sector. NGOs adopt a more integrated
approach, wi th emphasi s across di fferent ki nds of
organisations, but their interventions are too small and
dispersed to make a significant impact in terms of numbers
t rai ned. Further, they suffer from the probl ems of
i nconsi st ent curri cul um, l ack of cert i fi cat i on and
standardisation that were noted earlier.
5.83 The focus of t he Commi ssi on’s work and
recommendations in this report is to critically evaluate
the extent to which the skilled workforce needs of the
economy can be met through exi sti ng schemes and
approaches. I t must be mentioned here that in recent
years, there have been several agencies and institutions
that have undertaken similar reviews, underlined several
i nadequaci es i n exi sti ng systems and recommended
reforming the system. Our review therefore evaluates the
exi sti ng system keepi ng i n mi nd other evaluati ons,
critiques and recommendations. The salient features of
these evaluations are described below.
Skill & Training System in India: Critical
Evaluation & Salient Proposals
5.84 Recently, the role and performance of the existing
training system has been extensively reviewed and a
number of proposals have been made to strengthen and
expand i t . These proposal s readi l y recogni ze t he
61
i mportance of ski ll development of workers i n the
unorganised sector but focus on the skill requirements
for the organised sector. I t is recognized that the present
training system is supply-oriented and is not linked to
emerging demand (by the organised sector) for skilled
manpower. The proposal s, therefore, make vari ous
suggestions for strengthening and expanding the present
vocational educational and training system in the country.
5.85 The main proposals which we have examined
i n t hi s report have been made by t he Pl anni ng
Commission’s Task Force on Employment Opportunities
and Task Force on Skill Development (subsequently also
i n the El eventh Pl an) and the MOLE Draft Ski l l
Development Policy. In addition, the National Knowledge
Commission, the World Bank and 2008-09 union budget
also spells out some proposals. The targets proposed in
the various documents perused by the Commission are
quite general and range from about 15 million to 50
million annually. But in some cases only public sector
training capacity or only organised sector worker coverage
have been specified. There is general lack of clarity on
the extent of coverage of unorganised sector workers.
These report s have ment i oned vari ous f i nanci ng
mechanisms and have different emphases on the respective
roles of the public and private sectors. Besides, these
reports have suggested different apex level organizational
structures to address the VET requirements. From the
Commission’s point of view, a major lacuna of these
reports, as pointed out above, is that they focus mainly
on the training needs of the organised sector (whether
formal or informal). They also do not assess the existing
training systems for the unorganised sector workers. As
far as the Commission is concerned, we find that our
broad approach as wel l as some of our key
recommendati ons are si mi lar to that of the Second
National Labour Commission. We have gone beyond the
recommendati ons of the Second Nati onal Labour
Commission in several important respects.
5.86 Report s of most of t he above ment i oned
commissions and committees characterize I ndia’s system
of skill development and training as being government
led on the one hand and supply driven and not linked to
emerging demand (by the organised sector) for skilled
manpower on the other. Most of them argue for reducing
the government ’s role and gradually allowing the private
sector to take over the training delivery or reorienting
systems of training in the PPP mode. The government ’s
role is envisaged as a facilitator and for creating a larger
framework for certification and accreditation. Within this
broad approach, proposals vary among greater stress on
general education in comparison to vocational education
(World Bank), government ’s complete withdrawal from
t rai ni ng del i very (Task Force on Empl oyment
Opportunities) and training to be necessarily paid for in
the form of user fees by trainees.
5.87 Most of t he proposal s focus on the skill
requirements of theorganised sector. I ssues of trai ners’
accredi tati on, certi fi cati on of trai ni ng, autonomous
structure for skill development etc. that affect the quality
of training for the organised sector are addressed by
vari ous report s. I nf ormal sect or charact eri st i cs,
highlighted in Chapter 2 of this report, are considered
only briefly by the Second National Commission for
Labour and the MOLE’s report. The fact that the informal
sector’s workers and entrepreneurs require formal training
in order to improve productivity in both the formal and
large informal sector is hardly recognised. That skill
development for the informal sector has to be structurally
different, on which this Commission lays great emphasis,
does not receive serious attention by most critiques and
proposals.
5.88 The Task Force on Employment Opportunities
under the chairmanship of Shri Montek Singh Ahluwalia
submitted that the Central Government should completely
withdraw from delivery of vocational training services.
I t felt that the Central Government ’s role should be to
monitor the institutions that set up standards of training,
and evaluating and assigning rating to the private training
establi shments. I t called for the I TI system to be
restructured and additional resources provided to improve
its output. Selected I TI s chosen for joint management
with industry should be converted into autonomous bodies
receiving government funds. Moreover, it felt that the
existing policy of restrictions on charging fees should be
removed. I t also called for a centrally sponsored scheme
or an aid institution like the UGC to be set up for the
I TI ’s. I t was i n favour of i mposi ng a small levy on
companies to raise a skill development fund to finance
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
the I TI s with industry associations also having a say in
al l ocati ons. I t wanted graduates of I TI s and other
vocational training institutions to be eligible for entry
into polytechnics and +2 level medical and engineering
courses. The Task Force recommended that all enterprises,
irrespective of size and status, should be brought under
the purview of Apprentices Act. I t opined that the private
sector involvement in training has been discouraged
because of highly subsidized training services provided
by the public sector which should change.
5.89 The Second National Commission on Labour
recommended a new modular approach to vocational
training, which would aid multi-skilling, impart skills
attuned to the needs of the l abour market, and i n
consonance with the latest technology. I t called for the
setting up of an independent regulatory authority to set
t he st andards f or ski l l s requi red f or a part i cul ar
compet ency, programme i mpl ement at i on and
accredi t at i on of i nst i t ut i ons i mpart i ng t rai ni ng
programmes. I t also favoured establishment of Block
level vocational educational institutions in a phased
manner in each block and emphasized that trade unions
at the national, regional, industry and plant level should
all have a say i n the runni ng of workers’ educati on
programmes. The Labour Commission recommended
that for better matching of demand and supply a labour
market intelligence system needs to be put in place for
forecasting of marketable skills in both the organised
and unorganised sectors. In order to provide for retraining
of workers rendered surpl us/ obsol et e by l ay- offs,
retrenchment and voluntary retirement schemes/early
separati on schemes, and trai ni ng of l abour i n the
unorganised sector, the Second National Commission on
Labour recommended the establ i shment of a Ski l l
Development Fund (SDF).
5.90 The World Bank in its recent report on VET in
I ndia has taken a different approach. I t has argued that,
going by the international experience, I ndia would do
well to not expand its vocational education system but
focus on strengthening its general education system. As
far as vocational training in public sector is concerned, ,, ,,
major reforms at the policymaking and institutional levels
would be required. The report emphasized that involving
pri vate sector i n management woul d be cri ti cal i f
institutions are to be responsive to labour market needs.
The World Bank was of the view that the diverse training
needs of the informal sector operators cannot be met by
simply reorienting public training institutions. I nstead of
delivering training themselves, governments could focus
on creati ng an envi ronment to support non- publi c
provi ders. Whi l e emphasi zi ng t he i mport ance of
informal apprenticeships for training in the unorganised
sector, it suggests that the quality of such apprenticeship
should be improved through a strategy revolving around
traditional form of training, by upgrading the technical
and management skills of the masters as well as their
skills in pedagogy. Further, traditional apprenticeships
should be linked with specialized training providers or
master craftsmen, wi th the governments acti ng as
facilitators. To assist the growth of private training
provision, the report emphasized that the government
shoul d remove const rai nt s on set t i ng- up t rai ni ng
institutions.
5.91 The National Knowledge Commission, in its
recommendations on the vocational education and training
system, favoured placing vocational education entirely
under the Ministry of Human Resource Development
(MHRD). I t called for increasing the flexibility of VET
within the mainstream education system and establishing
links between the vocational education stream and school
educati on as well as hi gher educati on, and maki ng
vocational training available in various literacy and adult
educat i on schemes. The Nat i onal Knowl edge
Commission recommended that the government should
aim to spend at least 10 – 15 per cent of its total public
expenditure on education, on vocational education. It called
for expanding VET capacity through innovative models
such as public private partnerships, decentralized delivery,
distance learning and computerized vocational training.
I t also called for enhancing the training options available
for the unorganised and informal sectors. It also suggested
that the skills required by the unorganised sector should
be formally introduced in the curricula and practical
training courses. The government should act as a facilitator
and provi de fi nanci al support for such courses. The
existing Industrial Training Institutes (I TIs) and Industrial
Training Centres (I TCs) should be improved through
increasing their functional autonomy. An independent
regulatory agency for VET should be established.
63
5.92 The Task Force on Skill Development set up by
the Planning Commission has asked for a paradigm shift
in the national policy on skill development with the
pri vat e sect or pl ayi ng a l ead rol e i nst ead of t he
government.. The government ’s role would have to
change from being a vocational training provider to a
partner and faci li tator. Moreover, the Task Force’s
emphasis is on a shift from the supply-led to a demand-
driven approach. For vocational education, the Task Force
has suggested that the nodal agency would be the Ministry
of Human Resource Development but an i nterface
between Vocational Education and Vocational Training
would be provided at different levels. Recognizing the
importance of skill development in agriculture and its
vast potenti al, i t has recommended that agri culture
training institutes can be set up all over the country, in
the PPP mode wherever possible, to empower persons
dependent on agriculture. I t called for a National Mission
on Skill Development to be set up. As part of the Mission,
the National Council of Vocational Training (NCVT)
should be reconstituted and become the soleregulatory
authority for Vocational Training. .. .. New institutions or
Skill Development Centres (SDCs) could be opened on
demand by the state governments in collaboration with
the industry on a PPP basis. The Task Force left the issue
of trai ni ng i n the unorgani sed sector, (where i t was
suggested that training centres be set up in clusters of
vi l l ages, l i nked wi t h rural busi ness hubs and t he
development programmes of the local bodies, PPPs and
industry) to be looked at by the Mission.
5.93 The Eleventh Five Year Plan has called for a
“Skills Development Mission”, ”, ”, ”, ”, with an outlay of Rs.
22,800 crores. The Mission will, among others, realign
and reposition existing public sector infrastructure I TI s,
polytechnics and VET in school to get into PPP mode
and to smoothen their transition into institutions managed
and run by the private enterprises or industry associations.
I t will encourage a move away from the system of funding
training institutes to supporting the candidates. As a result,
institutional funding could be limited to an upfront capital
grant while recurring funding requirements could be met
by appropriate disbursement to the institute at the end of
successful certification. Public Private Partnership Mode
wi l l be the major vehi cl e for absorpti on of publ i c
expenditure in skill development in the Eleventh Five
Year Plan. Apart from the financial contribution from
the government, the Plan calls for creating an enabling
environment for private investment in skill training.
5.94 The Draft National Policy on Skill Development,
prepared by the Ministry of Labour & Employment, has
targeted to expand significantly the capacity of the national
skills development system. The Policy envisages setting
up of State Skill Development Councils, State Skill
Development Boards and State Ski ll Development
Corporations on the lines of their national counterparts.
The Pol i cy pl aces t he Mi ni st r y of L abour and
Employment as the nodal Ministry for coordinating the
efforts of skill development. The Ministry will also guide
t he f ormul at i on of a programme of act i on f or
implementing the Policy.
5.95 As part of the institutional restructuring, the
Poli cy cal ls for the Nati onal Counci l of Vocati onal
Training (NCVT) to be strengthened and reengineered
with a broader mandate and expanded activities to play a
pivotal role in skill development. A State Council for
Vocational Training is to be remodelled in each State,
which has similar functions as NCVT at the national
level. The Policy envisages establishment of Sector Skills
Councils (SSCs), in coordination with NCVT, as an
institutional mechanism to facilitate greater and active
participation of the social partners. Sector specific Labour
Market I nformation Systems are to be established at
national and state levels, and area specific LMI Ss at local
levels.
5.96 The Policy aims to introduce ‘competency focus’
in the national skills development system. The Policy will
focus on equalization of skills development opportunities
for the socially disadvantaged communities with those
of the rest of the population. Special efforts will be
mounted to promote establishment of training facilities
i n def i ci ent regi ons. The scheme of Modul ar
Employment Skills would be expanded greatly to cater
to the large size of the target group of drop-outs and
out-of-school youth, including child labour. All efforts
wi l l be made to i mprove and strengthen i nformal
apprenticeship arrangements in the unorganised sector
and to upgrade and diversify their activities into modern
skill areas. A special funding support scheme will be set
up, which, among others, will help meet direct and
S yste m o f S k ill D e ve lo p m e n t in I n d ia
64
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
opportunity cost of skills training and lifelong learning
in the unorganised sector.
5.97 I t is clear from the above that almost all recent
assessments (with the exception of the World Bank
report) have favoured large expansion in I ndia’s skill
development capacity. They have also all favoured a
substantial increase in skill development capacity for
informal sector workers. Some of the reports envisaged
t hat t hi s coul d be done by set t i ng up 5000 Ski l l
Development Centres. There are considerable differences
between the recommendations in the management and
financing models envisaged, with some of the reports
visualising that the government will only play the role of
facilitator, financier and coordinator.But their major focus
is on the organized sector, which has a clear articulation
of skill requirements and well established market links.
District Level Studies of Skill Development
System
5.98 The NCEUS’s assessment of the needs of skill
expansion in the informal sector makes it clear that these
efforts will have to be sufficiently decentralized and
grounded on smaller institutions at the local level. We
have earlier shown that training institutional capacity is
extremel y l i mi ted i n preci sel y those regi ons where
demographic dividend is the highest. However, we have
very little precise information on issues such as non-
governmental formal and informal training capacity, its
quality, the felt-need for training among potential trainees,
employers, service demanders, and ground level views
on how to expand a training system which can cater to
this segment. I n order to fill this gap, the Commission
made an attempt to independently evaluate the existing
system of ski ll development at the di stri ct level by
commissioning four district level studies in Sehore district
of Madhya Pradesh, Allahabad district of Uttar Pradesh,
East Khasi Hills district of Meghalaya and I mphal West
Di stri ct of Mani pur. The ai m of these di stri ct level
assessments was to estimate the existing training capacity
for unorganised sector workers in the districts, including
those run by the government, private sector and NGOs.
These studi es also tri ed to evaluate the quali ty and
suitability of the training already available for informal
sector workers, estimate the training needs of the district,
suggest suitable ways for expanding training capacity in
the district in order to cover about half the workforce by
2025 and develop a blueprint for new institutions that
may need to be supported, including the role of the public
and private sectors, management and governance structures
etc. The studies also tried to indicate the nature of public
fi nances that may be requi red for di fferent purpose
including subsidies to private trainers or training facilities,
direct provisioning of training services, and subsidies to
trainees. The main conclusions emanating from these are
summarized in the following paras.
5.99 These st udi es have emphasi sed t he t ot al
inadequacy of training facilities for unorganised workers
at the district level. Moreover, the quality of training
also leaves much to be desired. The unorganised workers
are acqui ri ng t rai ni ng mai nl y t hrough i nf ormal
apprenticeships, with some contribution by government
sponsored programmes and, to a lesser extent, by private
courses which are designed principally for educated youth.
5.100 The studies have emphasized that the need for
up-grading skills is felt acutely in both the rural as well
as urban areas. Training strategies may, therefore, have
to be formulated separately for the rural and urban areas.
A training strategy for rural entrepreneurs / workers may
involve a careful selection of the subjects for which
training is to be imparted through non-conventional
institutions. The potential for various skills in the rural
areas may be identified and the entrepreneurs selected
accordingly for imparting training. Certification of skills
may be an integral part of the strategy so that the trained
youth may use the certificate for getting employment
elsewhere. A well though-out strategy for marketing
the produce of the unorganised sector entrepreneurs/
workers, especially rural entrepreneurs, must be a part of
the overall skill development strategy. I n urban areas
also, MES should be identified for imparting both short
and long term training in such identified skills along with
certification. Non-formal training programmes may also
be initiated where the boys/girls pursuing their education
may join after their study hours [usually in the evening]
to learn certain specific skill which may help them in
getting employment after completion of their studies.
5.101 The studies have called for setting up training
facilities at a decentralized level, at least at the block
level, to enable such workers to access them. Moreover,
65
they feel that the NGOs, PRI s and private sector should
be actively associated if the desired expansion in training
facilities is to be achieved. I n respect of quality of training,
it is felt that skills being imparted through the existing
informal system should be certified and linkages between
formal and informal institutions should be established to
the extent possible.
5.102 The various studies have stressed identification
of master trainers at village, block and district level,
incentivising their training and linking them with formal
training institutions. There is a felt need for a well
desi gned trai ni ng of trai ners programme at formal
institutions where these master craftsmen could be trained.
Provision could be made for a one time grant to master
trainers to upgrade their workshops.
5.103 The studies have also called for a nodal agency
at district level to be set up to coordinate, implement,
evaluate and follow up the skill development programmes.
I t has been suggested in the Allahabad Report that all
those functions that has been stated in the SDI scheme
of Ministry of Labour & Employment for the State
Committee to be executed at state level may be assigned
to the suggested District Skill Development Agency.. This
arrangement could substitute the role of the nodal I TI s
as proposed in the SDI scheme. The nodal agency at the
district level may manage, monitor and evaluate the
ongoing training programmes in the district. I t may also
act as a Labour Market I nformation Centre, prepare a
training map for the district and maintain a directory of
potential trainers and trainees. I t may also undertake
periodic need / demand assessment of skills to help future
expansion of training activities. The nodal agency may
also co-ordinate between different line departments of
the Central and state governments engaged in training
and employment activities.
5.104 The Sehore Report suggested that at state level
the nodal agencies for rural and urban sectors may be the
Rural Development and Commerce and I ndustri es
depart ment s respect i vel y wi t h t he aut hori t y of
coordi nat i on rest i ng wi t h St at e Pl anni ng Boards/
Commissions/Departments assisted by the Directorate
of Economics and Statistics [DES]. At divisional level a
Committee headed by the Revenue Commissioner may
be constituted with collectors and other divisional level
offi cers as members to determi ne the strategy for
implementing training programmes. A few NGOs of
repute may also be incorporated as members. At district
level, the District Planning Committee may be entrusted
wi t h t he f unct i on of i mpl ement i ng t he t rai ni ng
programmes. A few sarpanches from strategic Gram
Panchayats may be co-opted for suggesting skills keeping
in view the grass–root realities. Similarly a few urban
ward members may be involved for identifying specific
skills for urban areas.
5.105 The two studies on the North Eastern region
have also suggested setting up of training institutions in
specific areas of interest to the two states. The study on
East Khasi Hills district recommended setting a new
training institution for the construction trades in the district
as there is a large demand for construction workers in
the North Eastern Region in general and in Meghalaya
in particular. The study on I mphal district suggested
setting up of an institution like the National I nstitute of
Fashion Technology for the development of the handloom
and handicraft sector in Manipur. I t has also called for
establishment of an institution for providing training in
the food processing sector. The study also feels that the
State I nstitute of Rural Development (SI RD) in Manipur
could be promoted as a full fledged training centre in the
form of an autonomous body.
5.106 Based on stake holder consultations, the studies
have i denti fi ed areas i n whi ch ski ll trai ni ng of the
informal sector workforce could take place. The Madhya
Pradesh study identified the following skills in which
training could be organized in the rural areas: animal
and poultry rearing, repair and fabrication of agricultural
implements, T.V. repair, preparation of bricks, plastic
molded items and plastic cord, preparation of soyabean
milk, preparation of tomato sauce, papad, bari, pickles,
etc and masala grindings, manufacturing of wooden toys,
training in computer operation, preparation of biscuit,
sweets etc. decoration items, fancy jute bags, making of
bangles etc. For urban areas, skills like auto repair, cell
phone [ mobile ] repair, furniture making and repair
tailoring, tyre remoulding, zari work, repair of tractor
t rol l i es beaut i ci ans, preparat i on of gunny bags,
manufacturing of cement products like tiles, pipes, security
service etc have been identified.
S yste m o f S k ill D e ve lo p m e n t in I n d ia
66
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
5.107 The various studies have noted that there is
strong gender bias in the existing training systems for
informal sector workers. For example, apprenticeship
systems were male oriented. They have, therefore, stressed
the promotion of gender sensitive training strategies. The
Madhya Pradesh study has specifically recommended that
special training facilities may be arranged for girls so
that the training venue may either be the same village or
at most some nearby village. Similarly, post training work
may be made available to women trainees near their place
of residence.
5.108 An important recommendation emerging from
the studies is that financial support may be provided to
subsidise wage losses of unorganised sector workers during
their training. Moreover, as part of the training strategy
soft skills like marketing, communication, attitudinal and
behavioural changes should also be imparted.
5.109 I t thus emerges from these studies that the need
for upgrading skills is felt widely among both the rural
and urban workforce. For women, even more than men,
it is important to establish training facilities which can
upgrade skills close to their door-step in a flexible manner.
As far as possible, skill development should be linked to
certification (formal skills) and improved livelihoods/jobs.
The decentral i sed trai ni ng faci l i ti es can emerge i n
alternative ways but their development may need to be
encouraged by a district nodal agency, which will also
serve as a Labour Market I nformation Centre keeping
records of potential trainees and trainers. The district
agency would also be the appropriate body to do a need/
demand assessment in order to guide skill expansion in
the area. The nature of this nodal agency could be state
specific and could link with the state level coordinating
institution.
Recent Government Initiatives for Expansion
of Skill Training
5.110 We note that, on the recommendations of the
different reports discussed earlier, Government of I ndia
has recently initiated a major restructuring of the skill
development system in the country. The Prime Minister’s
National Council on Skill Development (NCSD) has
been set up for giving policy directions and periodic review
of skill development efforts to address the issue of skill
development by expansion of training capacity in a mission
mode. The Council includes seven Union Ministers,
Deputy Chairman, Planning Commission, Chairman of
the NMCC, Chairman of the NSDC and six non-official
experts in the area of skill development. The Council
will be responsible for vision setting and laying down
broad strategies for skill development.
5.111 The Council will be supported by a National Skill
Development Coordination Board (NSDCB) which will
be charged with the coordination and harmonisation of the
Government’s initiatives for skill development spread across
the seventeen Central ministries and state governments with
the initiatives of the National Skill Development Corporation
(NSDC). The Board has been set up in the Planning
Commission under its Deputy Chairperson. The NSDCB
has thus emerged as the main body in the three tier structure
put into place by Government of India which will oversee
its skill development policies and bring about an accelerated
growth of formal skill acquisition in the economy through
the public and private sectors. At present the NSDCB has
been allocated a sum of Rs. 300 crores to support innovative
ideas by the ministries to expand skill training in the PPP
mode.
5.112 The National Skill Development Corporation
has been created by Ministry of Finance as a non-profit
corporation to support the expansion of private sector
initiatives in skill development. The Corporation will have
an initial corpus of Rs. 15,000 crores, to which the
Central Government has already contributed Rs. 1000
crores. The corporate sector, international development
agenci es and others are expected to contri bute the
remaining amount. At a meeting on the NSDC held in
August 2008 and chaired by the Finance Minister, the
private corporate sector has already announced its decision
to provide 51 per cent of the equity base.
5.113 The principal function of the Corporation will
be to provide financial support to private sector initiatives
i n ski l l devel opment . The operat i onal det ai l s and
objectives of the Corporation have not yet been detailed.
But it is proposed that the NSDC also be given some of
the functi ons related to formulati on of courses and
certification; accreditation of training institutions, and
creation of sector skill councils. The first meeting on the
NSDC presided over by the Finance Minister has taken
the decision to create fifty sector skill councils in high
67
growth sectors. I t appears that the NSDC i s bei ng
envisaged as a large body with several functions apart
from financing private sector initiatives.
5.114 Given the urgency of skills development at a
wide scale, the Commission welcomes the setting up of
the NSDC. The Prime Minister’s National Council on
Skill Development has adopted a document outlining the
Vi si on, St rat egy and a set of Core Pri nci pl es for
developing skills in I ndia.
5.115 The vision envisages designing an inclusive skill
system for creating 500 million skilled people by 2022
and bridging the divides of gender, rural/urban, organized/
unorganized employment, and traditional home-based and
contemporary work place-based occupations. The system
would focus on the outcomes, consumer choice and
competition and will ensure dynamic adjustment of supply
(trained candidates) to changes in demand (employment).
5.116 Overall, the strategy would focus on ‘folding the
future in’ which would lead to innovative solutions being
found for the issues faced. As part of the strategy, skills
would be made fungible and bankable. The system would
be made more open/flexible that allows individuals to
accumulate knowledge and ski lls and convert them
through testing and certification into higher diplomas
and degrees. Making the process of skills acquisition
bankable, especially for the poor will result in a demand-
driven approach. Given the asymmetry in development
across I ndi a, the strategy wi l l focus on co- created
solutions by working with the states, civil society and
community leaders and not concentrate only on public-
private partnership. The strategy would also emphasize
game-changing delivery by, for example, making public
institutions above high school levels available for skill
development by private sector after school hours. This
combination of public investment with private sector
capaci ty woul d l ower the cost of ski l l generati on.
Accelerated English learning classes would be included
in vocational training curriculums and attempts made to
incentivise English instruction.
5.117 The core operating principles for skill building
programmes emphasi ze t arget i ng market f ai l ure,
decentrali zati on, maxi mum use of exi sti ng physi cal
infrastructure, focus on modularity, open architecture and
short-term courses, linking financing to outcomes, on-
j ob- t rai ni ng and expandi ng f ormal empl oyment .
Government programmes must target the massive market
failure in vocational training for labour market outsiders
(less skilled, less educated, people from small towns,
women, etc.) mostly via funding innovations. Financing
of skill building must be separated from delivery and
government money should be available for both private
and publ i c del i very thereby promoti ng choi ce and
competition. All government financing should be linked
to placement ratios and outcomes instead of input metrics
as at present. Moreover, the bulk of financing must be
made available directly to candidates as scholarships, skill
vouchers, out come- based rei mbursement s et c.
Apprenticeships will be encouraged as these are powerful
vehicles for skill development because of ‘learning while
earning’ and ‘learning by doing’. A large number of
government buildings are available which could be put
into an asset bank (with no transfer of title or ownership)
and used for private and public skill delivery. Vocational
training at present should focus on short, relevant and
effective courses that get candidates into the workplace
like the MES of Ministry of Labour & Employment.
Skill building efforts must be accompanied by education
reforms. The core principles must also include creation
of a framework and i nfrastructure for i nformati on
dissemination around key metrics for public and private
training institutions including a voluntary rating and
participatory ranking system. This should be accompanied
by an effective assessment and credible certification system.
Employment exchanges need to be restructured as career
cent ers who wi l l channel i se candi dat es i nt o j obs,
apprenticeships and training.
Conclusion
5.118 As shown in this chapter, the emphasis of the
Governmental training system has mainly been on formal
VET and training facilities show regional concentrations,
with the southern and western region being better served.
The training capacity is also very limited in comparison
to the requirements. A large number of ministries and
programmes are, however, also involved in providing
informal training but due to lack of standardisation and
quality, their impact is also limited. There are a variety
of NGO and private sector initiatives in the area of skill
S yste m o f S k ill D e ve lo p m e n t in I n d ia
68
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
development. However, private sector initiatives are
mainly focused on educated youth and both NGO and
private sector initiatives currently have a very limited
outreach and their spread is weaker in precisely those
regions which are likely to witness faster labour force
growth in future.
5.119 Recent changes introduced by government have
been made with the purpose of providing greater cogency
and coordi nati on to ski ll development poli ci es and
programmes and to provide greater finance to worthy
private sector initiatives. The greater challenge is to assess
“demand” and to make the right kind of training available
at the grass-roots where informal sector workers live and
work. The findings of the district-level studies sponsored
by the Commi ssi on emphasi ze the i mportance of a
decentralized training system going down to the district
and the block levels. This approach is in consonance
wi th the recommendati on of the Second Nati onal
Commission for Labour calling for block level vocational
educational institutions.
69
Appendix A5.1 Appendix A5.1 Appendix A5.1 Appendix A5.1 Appendix A5.1
Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries / Skill Development Programmes being Organised/ Funded by Ministries /
Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.) Departments of Central Govt. (Nos.)
T TT TTotal otal otal otal otal 3868300 3868300 3868300 3868300 3868300
F FF FFor or or or ormal mal mal mal mal T TT TTr rr rraining aining aining aining aining 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent) 2248100 (58.12 per cent)
1. 1. 1. 1. 1. Ministr Ministr Ministr Ministr Ministry of Human Resour y of Human Resour y of Human Resour y of Human Resour y of Human Resource De ce De ce De ce De ce Dev vv vvelop elop elop elop elopment ment ment ment ment 1295000 1295000 1295000 1295000 1295000
-Vocationalisation of Secondary Education 1000000
-Polytechnics 295000
2. 2. 2. 2. 2. Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) Mi ni stry of Labour & Employment (DGET) 895000
-Craftsmen Training Scheme(CTS) 406000*
-Apprenticeship Training Scheme(ATS) 258000
-Short TermCoursesbased on Modular EmployableSkills(MES) (Target) 200000
-CraftsInstructor Training Scheme(CITS) 1000
-Advanced Vocational Training Scheme 30000
-Hi-tech Training Scheme
- Women Training Programme
3. 3. 3. 3. 3. Ministr Ministr Ministr Ministr Ministry of R y of R y of R y of R y of Rur ur ur ur ural De al De al De al De al Dev vv vvelop elop elop elop elopment ment ment ment ment 3000 3000 3000 3000 3000
-National Instituteof Rural Development (NIRD) 3000
4. 4. 4. 4. 4. HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector HUDCO & others in Construction sector 2500 2500 2500 2500 2500
-Training by Construction Industry Development Council (CIDC) 2500
5. 5. 5. 5. 5. Ministr Ministr Ministr Ministr Ministry of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustr y of Heavy I ndustries & P ies & P ies & P ies & P ies & Public Enter ublic Enter ublic Enter ublic Enter ublic Enterpr pr pr pr prises ises ises ises ises 10000 10000 10000 10000 10000
-Counseling, Retraining and Redeployment of Rationalized Workersof
CPSEs(Formerly NRF) 10000
6. 6. 6. 6. 6. Depar Depar Depar Depar Department of I nfor tment of I nfor tment of I nfor tment of I nfor tment of I nformatio matio matio matio mation n n n n T TT TTec ec ec ec echnolog hnolog hnolog hnolog hnology yy yy 41500 41500 41500 41500 41500
-DOEACC - ‘O’ level 41500
7. 7. 7. 7. 7. Depar Depar Depar Depar Department of tment of tment of tment of tment of T TT TTour our our our ourism ism ism ism ism 1100 1100 1100 1100 1100
-Food Craft Institutesunder StateGovernments 1100
I nfor I nfor I nfor I nfor I nformal mal mal mal mal T TT TTr rr rraining aining aining aining aining 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent) 1620200 (41.88 per cent)
1. 1. 1. 1. 1. Ministr Ministr Ministr Ministr Ministry of Human Resour y of Human Resour y of Human Resour y of Human Resour y of Human Resource De ce De ce De ce De ce Dev vv vvelop elop elop elop elopment ment ment ment ment 517700 517700 517700 517700 517700
-Community PolytechnicScheme 331000
S yste m o f S k ill D e ve lo p m e n t in I n d ia
70
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
-Jan Shikshan Sansthan 180000
-National I nstitute of Open Schooling – 6700
DistanceVocational Education Programmes
2. 2. 2. 2. 2. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of T TT TTexti les exti les exti les exti les exti les 40000 40000 40000 40000 40000
-Decentralized Training Programme
-Weavers’ ServiceCentres
-CooperativeTraining
-PowerloomCentres
-Indian JuteIndustriesResearch Association
-Central Wool Development Board
-Central Silk Board
-Training Centresfor Handicrafts
-North –eastern Handicraftsand HandloomsDevelopment Corporation
Apparel Export Promotion Council (AEPC)
3. 3. 3. 3. 3. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of W WW WWo oo oomen & Chi ld De men & Chi ld De men & Chi ld De men & Chi ld De men & Chi ld Dev vv vvel op el op el op el op el opment ment ment ment ment 247000 247000 247000 247000 247000
-Support to Training and Employment Programme for Women (STEP) 87000
-Swalamban (previously NORAD) 53000
-Training in Homescalepreservation of fruitsand vegetables
(by Community Food and Nutrition Extension Units) 23000
-Central Social WelfareBoard 24000
-Kishori Shakti Yojana, etc.
-Other Programmes 60000
4. 4. 4. 4. 4. Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture Mi ni stry of Agri culture 200000 200000 200000 200000 200000
-Training in Agricultural Extension
-Training in useof Agricultural Implements& machinery
-Soil Conservation Training Centre
-CFQC&TI
-NPPTI
-CooperativeEducation and Training
5. 5. 5. 5. 5. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of F y of F y of F y of F y of Food P ood P ood P ood P ood Pr rr rrocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustr ocessi ng I ndustri es i es i es i es i es 2500 2500 2500 2500 2500
Food Processing & Training Centres(FPTCs)
InstitutionslikeCentral Food Technology Research Institute
Paddy Processing Research Centre
Council of Entrepreneurial Development Programme(EDP)
6. 6. 6. 6. 6. Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment Mi ni stry of Soci al Justi ce & Empowerment 15000 15000 15000 15000 15000
-National Instituteof Mentally Handicapped
-National Institutefor theOrthopedically Handicapped
71
-Institutefor Physically Handicapped
-National Institutefor theHearing Handicapped
-National Handicapped Financeand Development Corporation
-National Schemeof Liberation and Rehabilitation of Scavengersand
their Dependents
-National Scheduled Castesand Scheduled Tribes
Financeand Development Corporation
-Rehabilitation Council of India
7. Ministr Ministr Ministr Ministr Ministry of R y of R y of R y of R y of Rur ur ur ur ural De al De al De al De al Dev vv vvelop elop elop elop elopment ment ment ment ment 200000 200000 200000 200000 200000
-Swarnjayanti GramSwarozgar Yojana (SGSY) 200000
8. Ministr Ministr Ministr Ministr Ministry of Housing & U y of Housing & U y of Housing & U y of Housing & U y of Housing & Ur rr rrban P ban P ban P ban P ban Po oo oov vv vver er er er ert tt tty Al y Al y Al y Al y All e l e l e l e l eviatio viatio viatio viatio viation nn nn 150000 150000 150000 150000 150000
-Urban Self Employment Programmeunder Swarna 150000
Jayanti Shahari Rozgar Yojana (SJSRY)
9. Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses Mi ni stry of Mi cro, Small and Medi um Enterpri ses 180000 180000 180000 180000 180000
10. HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector HUDCO & others i n Constructi on sector 13000 13000 13000 13000 13000
Building Centresof HUDCO 13000
11. 11. 11. 11. 11. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of Health & F y of Health & F y of Health & F y of Health & F y of Health & Fami l ami l ami l ami l ami l y y y y y W WW WWel far el far el far el far el fare ee ee 36000 36000 36000 36000 36000
BasicTraining of multipurposehealth workers 20000
Promotional training of FemaleHealth Assistants 16000
12. 12. 12. 12. 12. Mi ni str Mi ni str Mi ni str Mi ni str Mi ni stry of y of y of y of y of T TT TTr rr rri bal Affai rs i bal Affai rs i bal Affai rs i bal Affai rs i bal Affai rs 19000 19000 19000 19000 19000
Vocational Training Centres(VTC) in Tribal Areas 19000
*Excludes5.27 lakh seatsin ITCs
S yste m o f S k ill D e ve lo p m e n t in I n d ia
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Summary &
Recommendations
6
Introduction
6.1 This Commission has reviewed the role
of knowl edge based i nput s acqui red (i .e.
education, skills and technical education). These
i nputs cl earl y pl ay a very si gni fi cant rol e i n
promoting growth, especially in the emerging
knowl edge economy. As shown by t he
Commission’s earlier report (NCEUS 2007) these
inputs are also important from the individual’s
point of view as they provide a basis for income
and productivity growth.
6.2 The deficiencies with regard to education
and ski l l devel opment i n I ndi a have been
considered by the Commission in chapters 2 and
3 of thi s report. A l arge part of the I ndi an
workforce has low educational attainment and
even lacks basic foundation skills in the form of
l i t eracy and numeracy, al t hough t hi s may
gradual l y change wi t h i mproved access t o
elementary education. The skill base in I ndia is
mostly informal and thus difficult to adapt to
changing market and technological environments.
As far as formal skill training is concerned, the
present syst em suf f ers f rom a number of
deficiencies. Besides, the proportion of trained
people is far below those achieved by a host of
developing and developed countries. This, no
doubt, has profound developmental implications
both for the workers as well as the economy as a
whole. From the demand side, with the economy
experiencing rapid growth, skill shortages are
being experienced across the board and draw
at t ent i on t o ski l l devel opment by i ndust ry
federati ons, i nternati onal organi zati ons and
national bodies.
6.3 The i ssue of ski l l s has t o be
contextualized in I ndia in terms of the specific
charact eri st i cs of t he workf orce whi ch i s
predomi nantl y i nformal and engaged i n the
unorganised sector. More than three-fifths of this
workf orce i s sel f - empl oyed whi l e of t he
remaining who are regular or casual wage workers,
only half are employed in the organised sector. I n
the years to come as well, the bulk of employment
is likely to be in the unorganised sector of the
economy. Therefore, the skill requirements of the
unorganised sector will have to be visualized quite
differently from that of the organized sector. This
report is an attempt in that direction.
Approach of the Report
6.4 The present report has focused upon and
di scussed t he ski l l - rel at ed i ssues of t he
unorgani sed workers i n some detai l . Formal
training (i.e. training in a structured manner) has
mainly been accessed by students / workers with
secondary and post-secondary education. The
chances of acquiring formal training are currently
much lower for women, those with less than
secondary education, the poor, and those from
socially deprived backgrounds. Training capacity
is currently located in a few Southern and Western
states whereas the increase in labour force will
73
be in the eastern and northern.states. The empirical,
anal yti cal and practi cal i ssues that pertai n to ski l l
development and training for the informal sector are
indeed quite different from what is documented by the
reviews by earlier commissions/ committees. Some of
these issues are briefly summarised as below, followed
by a set of concrete recommendations for addressing them.
6.5 This Commission has underscored the need to
understand the heterogeneity of the informal sector in
I ndia, which leads to a wide range of training needs,
requiring analysis and policy that is different from that
of the formal sector. At the same time, we recognize that
addressing and attending to the training needs of those
who operate in the informal sector will eventually lead
to the generation of a pool of manpower that can cater to
the priorities and structures of the formal sector as well.
I t is from this standpoint that we address the issues that
come up when we discuss training in the informal sector
and t he suggest ed rubri c of a st ruct ure f or ski l l
development in the economy.
6.6 The informal sector is highly heterogeneous,
encompassing production units of different features and
in a wide range of economic activities, as well as people
(i.e. workers, producers, employers) working in service
activities or producing under many different types of
employment relations and production arrangements.
6.7 Some basic questions regarding training and
skill-building or upgrading as applied to the informal
sector are: for whom, for what, of what kind and how
best it can be provided. As far as the motivation for
training is concerned, those working in the informal sector
may not immediately see the need for further skills
acquisition. They may have little knowledge about where
to go even if the skills are seen to be required. The
principal problems of poor literacy and numeracy often
prevent i nformal sector workers from parti ci pati ng
successfully in the conventional training programmes,
even if they perceive the need for training. Training can
also be prohibitive in terms of costs – both direct and
indirect. Even token fees for the training can form a real
barrier for participating in training. Working hours are
often long and any time off from the productive work
means loss of income, which would affect the willingness
of workers to join a training programme, even if it is
relevant and easi ly avai lable. The trai ni ng needs of
different segments of the informal workers also have to
be factored in. For example, the expansion of training
needs to be gender equitable and gender sensitive, which
can not be in the nature of stereotyped expansion alone
or left entirely to the market. These issues, therefore,
has t o be kept i n mi nd when desi gni ng t rai ni ng
programmes for the informal sector.
6.8 Comi ng t o t he cont ent of t rai ni ng, t he
competencies that are required in the informal sector in
a range of activities or also in micro-enterprise based
production are a combination of ‘social competencies’,
including basic literacy and numeracy and the ability to
seek out markets and negotiate as well as technical skills
that might be industry or trade based.
6.9 A further set of issues relates to identification of
relevant demand for training for unorganised sector
workers. I t is often suggested that the training should be
responding to market demand with a greater role for the
private sector and for enterprises. This is a very pertinent
issue as state run vocational education and training systems
tend to be too supply driven and far-removed from market
demand. There is an assumption that by virtue of their
closer contact with the market, an employer-operated
training could be more efficient with private firms and
small enterprises at their centre, coordinated through
busi ness associ ati ons and other such i ntermedi ary
institutions. However, it is seen clearly that the impulses
generated from the market to the products and services
of the informal sector are often indirect. To use existing
patterns of market demand alone to signal what the
training needs of the economy are and also determine
the outcomes of training initiatives will by-pass most
members in the informal sector. Nor can it be expected
that private enterprises would be forthcoming for skill
upgradation for a large part of this sector. I n fact, market
development in a number of sectors is likely to follow
the skill development initiatives for workers in this sector.
Thus, expansion of skill upgradation of unorganised sector
workers needs to follow an assessment of the social
demand rather than existing market demand. This being
the case, skill expansion in this sector will require the
active participation of public agencies, while giving ample
scope and opport uni t y t o t he pri vat e and non-
S u m m a ry & R e co m m e n d a ti o n s
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
governmental actors, who wish to provide expanded
opportunities for training to such workers.
6.10 Thi s requi res coordi nati on between publ i c
agencies and private actors at all levels, including the
decentralized ones, particularly at the district-level, in
order to be able to arrive at realistic assessments of the
training needs of those in the unorganised sector on the
one hand and that of different areas and sectors, on the
other.
6.11 Finally, even as we recognize the diversity of
training needs and the differential perceptions and abilities
to undertake training in the informal sector, it is necessary
to assert that the ski lls that are percei ved or found
necessary in the informal sector have to be ‘formally’
provi ded as thi s i nvolves processes of accredi tati on,
certification and standardization that are essential for
enhanced productivity, both in the informal and formal
sectors.
6.12 Keepi ng t he above i ssues i n mi nd, t he
Commission has put forward recommendations below
for building a skill development and training system that
expli ci tly focuses on the expansi on of VET for the
informal sector workers who generally also have low
levels of education. I t may be noted that in doing so, we
have deliberately not focused upon systems of formal
training which are primarily intended for organised sector
workers with a reasonable level of education. These
systems of training are a subject of reform and have been
discussed extensively in other reports.
Recommendations
I. Proposed Target
6.13 The share of persons having formal training is
just 2.6 per cent of the labour force as per the NSS 2004-
05 Survey. Based on the studi es sponsored by the
Commission which have assessed the demand for skill
upgradati on and the exi sti ng trai ni ng systems, the
Commission’s review of VET experience and the link
between VET and development, the Commission would
like this rate of formal training to reach a level of 50 per
cent of the labour force by 2021-22. The persons who
would be targeted would include potential entrants into
the labour force as well as the existing pool of workers
whose skills require to be upgraded.
6.14 The 11
th
Plan has assumed vocational education
to increase from 1 million to 2.5 million per year and
vocational training capacity to increase from about 2.5
million to 10 million, to a modal mix of 12.5 million per
year. This will raise the annual VET capacity to 15 million
per year. The Commission estimates that if by scaling up
the skill development programmes, the training capacity
can be increased to 18 million by the beginning of the
XI I plan, the target of 50 per cent of formally trained
labour force can be achieved by 2021-22 or within three
plan periods. Although this is a long time frame, given
the vast size of the untrained labour force as well as its
other characteristics, this time frame is realistic.
6.15 The total labour force at that point is projected
to be 623 million by 2021-22. Our assumptions imply an
increase of formal trained labour force from 11 million
in 2004-05 to around 310 million in 2021-22.
6.16 I t may be noted that in the long run (by 2021-
22), the annual increase in labour force would be about 8
mi lli on. Si nce the trai ni ng programmes would have
succeeded in covering the backlog, the long run VET
capacity in the country may not exceed 12 million.
II. Organisational Structure
6.17 Given the urgency of development of adequate
skills in the economy at a wide scale, the Commission
welcomes the setting up of the Prime Minister’s National
Council on Skill Development (NCSD) to address the
issue of skill development by expansion of training capacity
in a mission mode.
6.18 As mentioned in para 5.111, a National Skill
Development Coordination Board (NSDCB) has also
been set up in the Planning Commission under the Deputy
Chairperson, Planning Commission to coordinate skill
development programmes i n the publi c and pri vate
sectors. The NSDCB has thus emerged as the main body
i n t he t hree t i er st ruct ure put i nt o pl ace by t he
Government of I ndi a whi ch wi l l oversee i t s ski l l
development policies and bring about accelerated growth
of formal skill acquisition in the I ndian economy through
the public and private sectors. At present the NSDCB
has been allocated a sum of Rs. 300 crores to support
innovative ideas by the ministries to expand skill training
in the PPP mode.
75
6.19 Gi ven t he enormi t y of t he t ask and t he
deficiencies in the present institutional infrastructure for
ski l l devel opment i n t he unorgani sed sect or, t hi s
Commission is of the view that the NSCDB should
launch a National Mission for Development of Skillsin the
Unorganised Sector, to support skill development in the
unorganised sector. Apart from coordinating the expansion
of skill development in the unorganised sector in a mission
mode, a certain quantum of funds should be at the disposal
of the mission to support skill development in a responsive
mode, focusi ng upon strengtheni ng of i nsti tuti onal
infrastructure, creation of labour market information
systems etc. in a manner that is detailed below.
6.20 The principal function of the National Skill
Development Corporation that has been created by the
Ministry of Finance as a non-profit corporation is to
support the expansion of private sector initiatives in skill
development. While the private sector initiatives have
greater capacity to undertake skill training in a self-
financing mode and cater principally to educated youth,
the Commission has shown that a number of NGO
i ni ti ati ves are underway whi ch seek to provi de ski ll
development to unorganised sector workers in innovative
ways. I n the Commission’s view, the main purpose of the
Corporation should be to provide financial support to
NGOs and non-profit organizations engaged in the
training of informal sector workers, while the financial
needs of for-profit training organizations should be
catered to by banks and other existing financial institutions.
The Corporation has also been given some other functions
which we discuss later in this chapter.
Vocational Training
6.21 The key requi rement s i n a nat i onal ski l l
development system are the identification, development
and accreditation of the training providers and training
institutions; development of suitable courses based on a
careful assessment of needs and demands; ensuring that
such a system meets the needs of potential trainees, and
the certification of trainees. The expansion of formal
training as envisaged in the targets mentioned above will
require a manifold expansion in each of these tasks along
with the development of fresh approaches which will
increase the relevance of training both for the trainees
and the potential employers or users of services and
products of the trained workers.
6.22 At present, the National Council for Vocational
Trai ni ng (NCVT) has been set up t o advi se t he
government on matters relating to vocational training,
for accreditation of institutes and prescribing of standards
and curricula under the Craftsmen Training Scheme (for
the I TI s/I TCs). Courses under the CTS cater mainly to
organised sector requirements. There is presently a void
as far as training in short term courses for the unorganised
sector is concerned. The MOLE has sought to fill this
voi d through i ts modular employable ski lls (MES)
programme and skill development initiative (SDI ). The
Commission views the SDI as a commendable initiative
under which there is a positive effort to expand relevant
skill training for school drop-outs and by backing this
through the development of modular courses, registration
of vocational training providers and certification by third
party agencies. However, these developments are still
li mi ted and are wi thi n the framework of a nati onal
scheme. There is therefore the need for a national level
st ruct ure t hat can provi de t he backbone t o ski l l
development in lagging areas and address the needs of
course development, recognition and accreditation of
training providers, and certification. These functions may
be performed by the NCVT with enlarged scope and
functions which will continue to play a pivotal role in
providing a framework for formal skill development in
the country. I n other words, the NCVT may be identified
as the primary agency charged with setting of standards,
certification of skills and accreditation of providers for
all certificate based training for which the minimum
el i gi bi l i ty i s l ess than hi gher secondary educati on.
Alternatively, a new body with well defined statutory
responsibilities may be charged with these functions.
6.23 I n performing these functions, the NCVT will
have to work closely in coordination with the private
sector, with employer bodies as well as those who have
experience in assessing training requirements of the
unorgani sed sect or. The DGET i s devel opi ng a
framework i n whi ch these stakehol ders are cl osel y
i nvolved wi th the expansi on of trai ni ng. Gi ven the
complexities of the task, the DGET has proposed the
setting up of Sector Skills Councils. These Councils
S u m m a ry & R e co m m e n d a ti o n s
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
should have adequate representation of stakeholders who
understand sector-specific training needs for the informal
sector as well.
6.24 The overlap of functions such as the formulation
of courses and certification; accreditation of training
institutions, and creation of Sector Skill Councils between
the NCVT and the NSDC should be avoided, and the latter
body should focus on financial initiatives as discussed earlier.
6.25 The Commission also recommends that a state
level structure should be established in the states which
will perform the same coordinating functions at the state
level which the NSDCB will perform at the national
level, within the overall framework provided by the Prime
Minister’s Council and guidelines set by the latter. This
body shoul d be ful l y responsi bl e for maki ng and
i mplementi ng a trai ni ng plan at the state level and
coordinating and monitoring skill and training initiatives
in the states. The Commission is of the view that given
the vast nature of the task and the heterogeneous nature
of the unorganised sector, training initiatives need to be
decentralized to the State and sub-state levels. The SCVTs
should have full responsibility for evolving a framework
for curricula development which meets the local needs,
devel opi ng a certi fi cati on framework. Thus, i n the
Commission’s view, while the NSDCB/NCVT will be
responsible for overall co-ordination and the development
of guidelines and curricula at the national level, the state
level bodies and the SCVTs will undertake the relevant
activities at the state level.
6.26 I n the Commission’s view, the expansion of skill
development involving millions of people will require
coordinated action between public and private agencies
at the local level. The Commission is of the view that
the skill development programmes for the unorganised
sector should be operati onali sed by a Di stri ct Ski ll
Development Council (DSDC) which would be the most
crucial link in the entire skill development framework.
The DSDC will function under the District Planning
Committee or Zilla Parishad and will be managed by an
executive committee consisting of the major stakeholders
in the skills arena at the district level. These would,
typically, be employer’s associations, prominent NGOs
working in the district, representatives of artisans and
members of the di stri ct admi ni strati on. The mai n
executive of the district skill development agency should
be a professional who is devoted full-time to the activities
of the agency. The Commission envisages that the DSDC
will be staffed with competent professionals and technical
persons. I n order to give greater operational flexibility to
the DSDC, they could be registered as societies or non-
profit companies. However, the exact organizational
model for the DSDC including its management and
pattern of stakeholder involvement may be kept flexible
and may be decided by the state governments.
6.27 The DSDC will create a database of existing
skills by undertaking skill mapping, assess training needs
on the basis of existing as well as potential industrial and
employment trends, formulate a district training plan
involving all stake holders, ensure convergence of various
training programmes, coordinate training activities of
government departments as wel l as other trai ni ng
providers, monitor and evaluate training programmes,
provide handholding to the trainees, and keep track of
the trainees after completion of their training. The agency
will assess the infrastructural needs for training and help
in its proper maintenance. The agency will help develop
a labour market information system which will consist
of a data bank of training and training providers, along
wi t h requi si t e det ai l s of t rai nees, compi l at i on of
information of skill requirements in sectors and sub-sectors
and also put into place a computerised MI S.
Vocational Education
6.28 At the apex l evel , the Mi ni stry of Human
Resource Development will continue to coordinate the
development of vocational education in the country.
However at the district level, the DSDC may be given
the task of dovetailing VE with training requirements.
The capaci ty for vocati onal educati on needs to be
increased significantly. This will have to be accompanied
by making the course content more responsive to market
demand. The industrial associations may be associated
with formulation and revision of course curricula. Links
should be established between the vocational education
stream and school education as well as higher education.
Students should be able to move between vocational and
general educati on streams by provi di ng them wi th
multiple entry and exit options. Public expenditure on
vocational education needs to be increased significantly.
77
The NSDCB can perform the task of coordination between
vocational education and vocational training components.
The State may design their own variants taking regional
specifics into account.
III. Expansion of Skill Development
6.29 In the existing training systems for the unorganised
workers the government system finances and provides (on
its own or with the assistance of private providers), either
formal or informal training; or different types of private
providers offer formal or informal training. The expansion
of skill development for unorganised workers have to be
formulated to reflect the needs of the economy and the
strengths and weaknesses of the different types of training
systems on the one hand and the realities of the unorganised
sector on the other. This needs to be done through a
combination of public and private sector initiatives, the latter
term being defined broadly to include all types of non-
governmental providers, (trainers, and others) involved in
certification, accreditation etc. In the public sector, expansion
of training can be done through consolidation, strengthening
and expansion of the existing schemes that are already in
existence and have been functional at the district level for
some time now, by undertaking new initiatives, and also by
integrating initiatives such as the cluster development
programme of the MSME under it.
Consolidation & Strengthening of Training
Programmes
6.30 The t rai ni ng syst em shoul d l i nk ski l l
devel opment wi t h l i vel i hood promot i on. Ski l l
development for the unorganised sector workers has to
be seen as an integral part of livelihood support which
includes a number of elements including identification
of activities, credit and technological support, capacity
building and backward/forward linkages.
6.31 The governmental system is a very large source
of skill training for unorganised sector workers. Almost
al l l arge government l i vel i hood promot i on and
developmental programmes have a training component;
e.g. the rural development programmes involve training
for SGSY beneficiaries. Some training is also built into
the NREGP. The MSME trains under the PMRY and
REGP and also through the MSME-DI . The Ministry
of Health has trai ni ng programmes for Anganwadi
workers and Accredited Social Health Activists (ASHAs)
and so on. The stress is on providing short duration
functional training. The advantage of this training is that
it is linked to a specific livelihood based activity being
undertaken or likely to be undertaken by the individual
and often with different types of assistance/handholding.
Government programmes rely on formal as well as
informal trainers. Moreover, these programmes also reflect
PPP mode as training in a number of instances is imparted
by NGOs / private providers.
6.32 Furt her, t here are many ot her l i vel i hood
promotion activities which are being carried out with
the support of banks and NGOs. Prominent among these
are the micro-finance based activities supported through
the NABARD-SHG linkage programmes which also
support training initiatives.
6.33 The main problems associated with these training
programmes are that they are not linked to any standards,
the qual i ty i s hi ghl y vari abl e, there i s no standard
curriculum and usually there is no certification. In addition,
the Government also extends informal sector training
through the SSKs and Nehru Yuvak Kendras. However,
the training under these programmes is also neither
standardised nor certified. It isrecommended that thequality
of training imparted under themshould beimproved and
standardized and theseschemesbeintegrated under thetraining
plan of theDSDC. Theseschemesshould alsoinvolveformal
certification procedurestoensurestandardization and minimum
standards of quality. Over time, training under these
programmesshould belinked totheMES framework.
The Skill Development Initiative (SDI) & the
Entrepreneurship Skill Development
Programmes (ESDP)
6.34 The Skill Development I nitiative (SDI ) scheme
of the Ministry of Labour & Employment is a five year
project duri ng whi ch one mi lli on persons would be
trained or their existing skills tested and certified under
Modular Employable Skills (MES) framework. The
MES offers many elements which are appropriate to the
development of training initiatives for the informal sector.
Under the SDI , workers can be trai ned i n formal
institutions, or informally trained workers could take up
a certification examination. Such workers could be offered
facilities to go through a “finishing school” before taking
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
such an exami nati on. Si nce the SDI and the MES
framework can be adapted for training of all informal
sector workers, the Commission is of the view that the
SDI should be gradually strengthened and target under
the scheme significantly increased along with budgetary
allocations. Larger number of training providers and
assessing bodies should be brought under its ambit.
6.35 Similarl y, the Ministry of Micro, Small and
Medium Enterprises is focusing on Entrepreneurship
Ski l l Devel opment programme (ESDP) i n t he
unorganised sector conducted through MSME-DI s.
Emphasis is on conducting outreach training programmes
in backward areas, particularly for weaker sections of the
society. Trainees from weaker sections are given a stipend.
No fee is charged from SC and ST candidates. Training
programmes are being conducted in 60 disciplines under
ESDP. The Commi ssi on i s of t he vi ew t hat t hi s
programme should be steadily expanded as it has the
potential to provide relevant skills to a large number of
target group beneficiaries in the unorganised sector.
Focused Approach towards Improvement
in Training in Clusters
6.36 The UNI DO and the MSME have identified
about 6400 clusters in the country, of which more than
6000 are classified as low-tech and are certainly likely to
be requiring skill upgradation. The following specific
recommendat i ons are bei ng made wi t h regard t o
dovet ai l i ng of t he exi st i ng cl ust er devel opment
programmes in I ndia and the proposed district level skill
agency. First, it has to be recognized that an important
component of development in the unorganised sector is
that of clusters and a process of skill development focused
at the district level has to explicitly take into account the
needs of clusters in the district. Effective partnership
needs to be established between the DSDC and all clusters
i n t he di st ri ct . The DSDC shoul d consi st of
representatives from different stakeholders in the clusters
that exist in specific districts and district cluster skill
development plans should be evolved and dovetailed with
cluster programmes run by different agencies such as
UNI DO, NABARD, MSME, KVI C and so on.
Alternatively, if cluster development programmes in
districts are managed by a cluster officer, she/he has to
be part of the DSDC along with the representatives from
di f f erent agenci es t hat run cl ust er devel opment
programmes.
6.37 Second, i n order to moti vate cluster actors
regarding the desirability of expanded skill development
programmes, the methodology evolved by the UNI DO
and the MSME’s cluster i ni ti ati ves to generate the
condi t i ons f or concert ed j oi nt act i on among
enterprises,and recognize the interdependencies between
them and the advantages of joint initiatives, need to be
expanded into the skills and training arena. Such initiatives
are already in place for marketing and financing and can
be easily extended to skills. This involves convincing
entrepreneurs, artisans, industry associations and other
cluster stakeholders about the desirability of investing in
and undergoing training for sectoral upgradation and also
evolving a system of incentives for participating in training
programmes.
6.38 Thi rd, t here are several sect oral ski l l
development programmes that are being conducted by
different agencies that function as part of the industries
that are organised in the form of clusters. For example,
in the leather industry, institutes such as the Footwear
Desi gn and Development I nsti tute and the Central
Leather Research I nstitute conduct training programmes
aimed at providing skilled manpower for the export
segment of the leather industry. Many of these initiatives
cater to the limited number of trainees and are often
targeted at higher ends of the training spectrum, whereas
the upgradation requirements of the industry need training
at low value added levels in the chain, as in raw hide and
skin collection or the production of semi-finished leather,
where very large numbers of unorganised sector workers
are employed. Such integration of training requirements
of workers in the lowest level in the value chain with the
more overtly perceived need for skilled workers at higher
levels can take place only with more active intervention
by state agencies working together with the cluster level
organizations. District level subsidized institutions to train
such lower level workers, set up under the DSDC in
collaboration with cluster actors, can perform this role.
6.39 Fourth, the incentive structures and costs to be
i ncurred by pot ent i al t rai nees have t o t ake i nt o
consideration differences between clusters, i.e., artisanal,
micro-enterprise based or mixed firm ones. For example,
79
purely artisan clusters will require co-ordination among
artisans and recognition or education about the benefits
of training, but costs will have to be borne by the state
agencies under one of the programmes. Expenses and
infrastructure for training of trainers can come under
cluster based artisan improvement programmes that are
l ocated i n cl usters, agai n joi ntl y under the cl uster
development programme and the DSDC. I n the case of
clusters where some larger firms dominate through value
chain or subcontracting relationships, a method to divide
costs of training by size of firm might need to be evolved
along with positive incentives for firms that undertake
training.
Provision of Formal Training to Informally
Trained Workers
6.40 The largest system of ski ll development for
unorganised workers that is in vogue today is the informal
training system in which workers learn some skills on
the job from skilled workers/ master craftsmen. Our
analysis in this report shows that such training is spread
across all major activity categories, includes workers with
low levels of education and across the poorer segments.
I n other words, should the productivity and earning
potential of such workers be raised through appropriate
formal training, it would also have a major pro-poor
impact.
6.41 The main advantage of the system is that workers
combine learning with earning. The passage of skills from
skilled worker to unskilled worker varied depending upon
worker background (family or hired worker, male or
female), type of industry or trade etc. A major potential
constraint in this system is the static skill level of the
worker with limited adaptations in a world of changing
technologies/demand. No ‘schooling’ of the skilled worker
is possible and he/she only learns while doing.
6.42 I n order to address the existing problems with
informal apprenticeship systems at the district level, crucial
attention has to be paid to the issue of awareness and
incentives to those who impart training (master craftsmen)
as well as those that receive training (apprentices) in
informal apprenticeship systems. First, it is essential that
the formal certification systems being developed under
the SDI are able to reach out to the informal training
system through the district level structure suggested earlier,
or through specific schemes such as the SDI , the ESDP
etc. The formal apprenticeship can be supplemented by
including a component of specific training, for instance,
on technical and theoretical skills that could be provided
at the workplace or in a supporting centre, again using a
system of incentives and possibly coordinated by boards
such as KVI C, HHDC and so on. Formal training inputs
can also be offered at the workplace through mobile units
or trucks equi pped wi th compl ete workshops that
regularly visit workplaces and provide instructions on
probl ems at hand. There can be i ncenti ves for the
apprenticeships in the form of reimbursement of fees
charged on completion of the course, low or no fees
charged for those from SC/ST backgrounds, and so on.
6.43 Second, it is necessary to continuously upgrade
skills of master craftsmen/trainers themselves in order to
be able to cope with changing technology, fashion and
shifting markets. This will involve sectoral initiatives that
combine skill upgradation at a higher level with other
sector- speci fi c i nterventi ons such as technol ogi cal
upgradation and initiatives for expansion of scale under
cluster development programmes. Some of these issues
are dealt with by the SDI . But the Commission has
recommended a full- fledged programme for taki ng
informal training to the next level, while providing some
form of employment assurance for a period during training
to the trainee. The Commission has, therefore, proposed
a programme for empl oyment assurance and ski l l
formation which are discussed below.
Proposed Programme for Employment
Assurance & Skill Formation
6.44 The Commission recommends that in order to
operationalise the suggestions given in the earlier paras
to strengthen and upgrade (formalize) the systems of
informal training, a massive Programmefor Employment
Assuranceand Skill Formation with theaimtodevelop human
capital through on-job-training be launched. The scheme
will provide employment to poor individuals for about
six months and provide them formal marketable skills.
This will help the trainees realize the importance of
training. The proposed scheme is discussed in detail in
the following paras.
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Goals and Objectives
6.45 Given the need to expand formal training in a
demand oriented fashion and to provide some incentive
for formal skill training to unorganised sector workers,
the Commission proposes a scheme for Employment
Assurance and Skill Formation to meet the twin purpose
of skill development in a practical fashion, and for meeting
employment needs of these workers.
6.46 The purpose of the scheme is to develop human
capi t al t hrough on- j ob t rai ni ng, whi l e provi di ng
employment to poor persons for about six months; to
train them and to provide them with formal marketable
skills, so that at the end of this period, having been
employed at least at the minimum wage, they qualify for
regular employment or self-employment at higher wages
utilizing the skills acquired. I n that sense, the proposed
scheme may also be considered as a programme for skill
formation through apprenticeship and the six months’
job at mi ni mum wages may be regarded as “on job
training”.
Eligibility
6.47 All young persons will be eligible under the
scheme who: a) are in the age group 18-29, (b) are with
at least primary, but not more than secondary level of
education; and (c) have an economic eligibility depending
upon locati on, as di scussed below under the heads
“Coverage” and phasing. Subject to this, and subject to
training slots being available, the scheme may be seen as
providing an entitlement to all registered youth to receive
training through placements.
Programme of Training
6.48 The scheme envisages dovetailing training / wage
employment with existing schemes of the Ministry of
Labour and Employment (Skill Development I nitiative)
and ot her schemes of Sel f - Empl oyment and
Entrepreneurship Development.
6.49 All employers willing to provide on-job training
would be registered by the proposed SDS in its MI S.
These employers could i nclude all mi cro and small
enterprises, master craftsmen and other skilled self-
employed workmen, self-help groups, cooperati ves,
municipalities, government departments, public sector
undert aki ngs and any ot her urban agency, whose
bonafides in providing on-job training in designated skills
could be easily accepted.
6.50 All workers seeking training in specific areas of
their choice would also be registered under the scheme.
6.51 The allotment of workers to employers/trainers
could be by mutual agreement or through employment
exchange/placement centres in the district.
6.52 All employers/ trainers would provide on-job
training to the worker and a daily stipend not less than
the declared minimum wage for unskilled workers. The
daily working hours shall not be more than 8 hours and
workers will be allowed weekly off.
6.53 Every worker under t he scheme woul d be
expected to undergo certification in the designated skill.
For this purpose, this programme would be dovetailed
with the Skill Development I nitiative which is developing
course curricula under the Modular Employable Skills
Programme and certification norms for a wide variety of
skills.
6.54 I t will be the responsibility of the employer to
provide employment for at least six months to the eligible
worker. A mechanism will have to be set up to quickly
arbitrate any possible infringement of the terms of this
scheme by any of the parties involved.
Coverage
6.55 The scheme is intended for youth with at least
primary but less than higher secondary levels of education.
Further, it is largely intended to cover poor youth. I n
urban areas, eligibility may be limited to those whose
household income is less than Rs 7000 per month as on
March 1, 2008. I n rural areas, the scheme may cover
youth from landless poor, marginal and small farmer
households who are about 80 per cent of the total with
the requisite educational eligibility. During 2004-05, an
estimated 104 million youth in I ndia had educational
qualifications as per this scheme. Of them, about 30 per
cent (33 million) were in urban areas and the rest (71
million) were in rural areas. About three-quarters of the
urban youth were in smaller towns (less than one million
populati on). About two-thi rds of the youth i n thi s
category are in the labor force.
81
Phasing of the Scheme
6.56 At present , empl oyment and i ncome
opportunities are distinctly higher in large towns. On
the other hand, the training capacity is weaker in rural
areas, particularly in poorer states. Since the scheme
requires building up of administrative capacity in the
districts, in the first phase we may start with urban areas
with poorer employment opportunities and cover some
50 non-metropolitan smaller towns with population
bet ween 50,000 and 5 lakhs, as pilots. This may be
followed by the other segments of the eligible population,
such as the eligible youth in the rural areas and larger
towns.
Financing requirement
6.57 The total financial provision per worker would
be Rs 10,000/- which would cover (a) about six months
of pre- or post-certification on job-training/employment
for which the employer be provided Rs. 50 per day as
subsidy towards stipend being paid to the worker (b) Rs
500 as the cost of certification, as provided under the
SDI ; (c) Rs. 1000, as cost of training/incentive to the
provider/employer. The worker would have the flexibility
of receiving training either pre or post-certification, or
both. However, the subsidy towards the stipend would
be back-ended in the case of the former; i.e. the employer
would receive the stipend subsidy only if the worker is
certified.
6.58 As indicated above, the programme requires a
one time financial outlay of Rs. 10,000 per worker, which
is the same as that provided under the NREGA. A
provision of Rs 10,000 crores over five years for this
project would thus ensure addi ti onal trai ni ng-cum-
empl oyment t o one crore persons t hrough t hi s
mechanism, expanding the present training capacity by 2
mi l l i on per year under t he programme. A l arger
budgetary allocation would provide larger job creation.
However, it will require galvanizing the existing and newly
creat ed admi ni st rat i ve mechani sms t o ef f ect i vel y
implement this proposal.
Benefit and Impacts
6.59 The proposed programme will provide formal
skills to those youth who are from the poorer sections
and who have dropped out of school without achieving
higher secondary education. The scheme would provide
the following principal benefits:
• Al l ow t he hi t hert o unski l l ed and poorest
individuals to acquire skills for employment and
increase their employment potential and the
wage earning capacity.
• Enhance t he sourci ng of cert i fi ed ski l l ed
manpower in line with workplace requirements
and customize skills, education and training to
the requirements of the industry.
• I ntegrate unemployed poor into the mainstream
of an expanding economy who can be fully
employable on a sustainable basis without any
further sop or subsidy.
• Further, the programme is quite flexible and
can be applied differently in different contexts,
within the same overall financial parameters.
6.60 The scheme envisages a demand driven training
wherein the employers/industry would determine the
skills required for their manpower.
IV. Training Providers
6.61 Avai l abi l i ty of qual i ty trai ners i s general l y
perceived to be one of the main bottlenecks to expansion
of skill development programmes. Hence a major effort
is required to enhance their availability. A register of
training providers should be prepared and updated as a
part of the labour market information system. To provide
training at block-level, the trainers will have to be from
the local areas so that they would be willing to reside
and provide training in those areas. I ndustry associations
can help in training the trainers in their respective fields.
MOUs could be signed by the NSDCB/NCVT with
existing training institutions and industry associations for
this purpose. Master crafts persons would also be a part
of the mission to create a larger universe of trainers.
V. Training Infrastructure
6.62 I t has been observed that with devolvement of
large number of functions and funds to the panchayati raj
institutions, physical infrastructure is available at the block
l evel whi ch coul d be used f or ski l l devel opment
programmes. However, the availability of infrastructure
varies between blocks and may not be adequate for the
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
potential target trainees in particular blocks. Funds could
be given by the DSDC for meeting deficiency of available
infrastructure at block level. Such financial help could
be linked to the number of potential trainees in that block.
VI. Course Development and Assessment
6.63 Under the MES/ SDI framework, modul ar
courses are being developed in association with industry
associations. These courses are available for adoption by
any training provider. This process should be strengthened
and the list of courses available for training be significantly
enhanced. Such course material will have to be provided
in local languages if skill development programmes’
outreach has to expand.
6.64 Under draft NSDP of Ministry of Labour, while
Sector Skills Councils are to assess the training needs of
the organised sector Partnership Development Councils
are to perform a similar function for the unorganised
sector, at least initially. However, such an arrangement
may create unnecessary confusion. Skill Sector Councils
may look after the training needs of the unorganised sector
also from the beginning.
VII. Labour Market Information System
6.65 I t i s necessary to set up a Labour Market
I nformation System (LMI S) at the national, state and
district levels linking various trainers and the trainees.
Such a system will help in linking the trainers and the
t rai nees and al so hel p i n moni t ori ng t he t rai ni ng
programmes. The DSDC will be performing the task at
the district level. For this purpose, the states may consider
remodelling the existing employment exchanges so that
these can also take up the functions of tracking trainees,
li sti ng formal and i nformal trai ni ng provi ders, and
providing relevant placement information to both trainees
and potential employers. Over a period of time, the LMI S
systems could sell their services and be made financially
viable. The systems at the state and national level will
have to aggregate the inputs from the districts to arrive
at the national scenario.
VIII. Support to & Synergy with Private
Initiatives
6.66 There are a vast number of private initiatives to
support skill training. These include in-house training
by corporates, private for-profit training initiatives and
private non-profit initiatives by foundations, trusts, NGOs
etc. The government ’s approach towards these initiatives
should be to provide them the maximum opportunity
and flexibility for growth. While the public sector will,
no doubt, like to rely on NGO/private agencies to front-
end its training initiatives, special effort should be made
to preserve the autonomy of those institutions which are
tryi ng to develop i nnovati ve models of trai ni ng for
unorganised sector workers. Support may be provided
for such initiatives as well as other non-profit initiatives,
in the form of subsidies for capital costs or coverage of
finance, with proper incentives to expand their outreach
among the weaker sections of the unorganised sector
workers. The Commission had already envisages such a
role for its proposed National Fund for the Unorganised
Sector. This function must also be extended to the NSDC.
IX. Addressing Gender Issues in Skill
Development
6.67 The prevalent education and training system
reinforce the cumulative disadvantage faced by women
in the labour market. As shown in this report, women in
the unorganised workforce have much lower levels of
educat i on and t rai ni ng t han men. Furt her, i n t he
unorganised segment, existing training is concentrated in
certain gender stereotyped vocations, such as tailoring.
There often a structural bias against women in the existing
training systems. This is because gender stereotyping and
discrimination results in their facing several obstacles such
as lack of time and heavy domestic workload, distance to
classes, male teachers/trainers, opposition from family
members, and poor linkages with other development
inputs, such as income generating programmes. Further,
i n si tuati ons where trai ni ng provi si on i s subject to
minimum educational requirements as in the formal
training system in I ndia, this discriminates against women
even more t han men. I n addi t i on, si nce gender
discrimination in the labour market restricts access to
employment and results in lower remuneration in most
types of employment, women themselves might not be
motivated to enter training programmes. All the issues
that affect workers in the informal sector, therefore, affect
women within it even more intensively.
83
6.68 The Commission believes that the proposed
expansion in training systems should pro-actively foster
gender sensitivity and gender equity in training through
proper design, advocacy, and incentives. Four broad sets
of issues may be addressed here. First, the content of
training programmes for women may need to integrate
component s of l i t eracy, numeracy, busi ness ski l l s,
confidence skills in a bigger way. Second, training for
women is likely to more effective when done in a formal,
participatory way through groups. I n a range of activities
such as street vending, city cleaning services and domestic
servi ces, such i nterventi ons have resulted i n better
remuneration to those who organise in groups and this
should include training. I n fact, in urban areas, these
groups can function as employment exchanges where
women can be encouraged to register to undergo training
and in turn be placed in employment at given terms. The
Kudumbashree initiative in Kerala shows that this can
be coordinated fairly effectively at the district or block
level, without running into difficulties with fraudulent
agencies. Third, programmes should address the special
constraints faced by women in participating in training.
This includes absence of mobility, need for child care
and gender segregation. The training itself should mainly
comprise modular, short-term courses with flexible entry
and exit options and mobile training provision. Fourth,
training women only in gender stereotypes activities has
both specific and general ramifications, since such training
not only would perpetuate gender segmentation, but also
often leads to over saturation of trained women in low
paid work. This does not mean that skills training should
no l onger be provi ded i n areas around women’s
reproductive or conventional care role, but that the main
consideration is for women to gain access to work which
is better paid and with better conditions. Hence, women
must also be encouraged to train for “hard” technical skills
as well in areas such as agriculture, where there role as
producers is far more significant today. Admittedly, NGOs
may have a better niche in doing this.
X. Financing
6.69 The significant expansion in VET will require
a consi derabl e up- scal i ng of f i nanci al resource
commitment by the government and by the private sector
and both these entities have signaled their commitment
to increase their spending on skill training. The present
commitment of the Central government is to increase
expenditure on VET to Rs. 22,800 crores during the
11
th
Plan. I n addition, a sum of Rs. 300 crores has been
committed to the NSDB and Rs. 1000 crores has been
allocated to the NSDC. A large part of this allocation
will go to support strengthening of VET infrastructure
for training of workers for the organised sector through
I TI s and Polytechnics.
6.70 This Commission has advocated that (i) a sum
of Rs. 5000 crores be allocated to the NSDB for a National
Mission for Skill Development in the Unorganised Sector
for supporting the cost of setting up and operating the
proposed institutional infrastructure for expansion of
training initiatives at the district level and, (b) at least a
doubling the existing training schemes under the SDI
and MSME (Rs. 1000 crores; and (iii) Rs. 10,000 crores
for the proposed Employment Assurance Scheme. I n
effect, the Commission’s proposal imply a significant
increase (to about Rs 40,000 crores) in the financial
allocation for VET over the next five years. Given the
strong positive externalities emerging from expansion of
training, especially of the unorganised sector workers,
this increase can be considered necessary. Moreover, if
necessary, the resources can be raised through a levy on
the turnover of companies to help partially meet the cost
of skill development programmes. Tax concessions may
also be extended for maki ng contri buti ons for ski ll
development
XI. Conclusion
6.71 This Report of this Commission has focused on
the formal training of workers who are either employed
i n the unorgani sed sector, or are l i kel y to joi n the
unorganised sector as waged or self-employed workers.
These are typically workers with low levels of education
and economic wherewithal, a proportion of whom have
acquired skills through informal training. We have shown
in this report, that formal training has focused so far on
those with better educational attainments (at least higher
secondary education), coming from better-off segments
of society. Although a majority of these trained persons
are not absorbed in the organised sector, they would still
tend to constitute an upper stratum of workers in the
unorganised sector. Due to perceived skill shortages in
the organi sed sector (for formal as well as i nformal
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
workers), most recent proposals have focused on higher
end formal trai ni ng, whi le recogni si ng the need for
training of unorganised sector workers. This Report, on
the other hand, has based itself on the premise that there
is also a very significant developmental need to improve
the skill level of unorganised sector workers (both self-
employed and waged) who are at the lower segment. We
further showed that the characteristics and training needs
of this segment of the workforce are quite different from
the upper segment requiring significant differences in
approach – in terms of content, institutional delivery etc.
6.72 Expanding the training for such workers would
requi re act i ve part i ci pat i on of di f f erent t ypes of
stakeholders – government departments, trainers, private
training providers, NGOs and employers. The financing
and cost recovery models for such training would also be
quite different. The Commission is of the view that if its
recommendati ons, i ncludi ng the proposed Nati onal
Mi ssi on, a f resh i nst i ut i onal approach and t he
Employment Assurance Programme are adopted, it would
be possible to expand training to cover 50 per cent of the
labour force within a reasonable time frame. This, in
turn, would not only provide a firm anchor to the growth
process, it would also help in spreading the benefits of
growth to a much wider cross-section of the workforce.
85
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I LO, 2000 “Resolution Concerning Human Resources
Training and Development”, adopted by the General
Conference of the I LO, 88th Session.
I LO, 2003a. “Employment of Peoplewith disabilities: the
Impact of legislation”, I LO, Geneva.
I LO, 2003b. “Industrial Training Institutesof India: the
efficiency study report”, I LO sub regional office for South
Asia, New Delhi
I LO, 2008. “Fifth Itemon theAgenda: Skillsfor Improved
Productivity, Employment Growth and Development”,
General Discussion, International labour Conference, 97
th
Session, Provisional Record 16, Geneva.
Johanson, R. K. and Arvil V. A. 2004. “SkillsDevelopment
in Sub-Saharan Africa”, Regional and Sectoral Studies,
World Bank, Washington D.C. pp.17-18.
National Commission for Enterprises in the Unorganised
Sector, 2007. Report on Condi ti ons of Work and
Promotion of Livelihoods in the Unorganised Sector
Pillay, Gerald F. 2005a. “Technical and Vocational education
(TVET) Systemsof Selected East Asian countries: Singapore”,
World Bank, Washington D.C.
Pillay, Gerald F., 2005b. “Technical and Vocational education
(TVET) Systemsof Selected East Asian countries: Malaysia”,
World Bank, Washington D.C.
Pillay, Gerald F., 2005c. “Technical and Vocational education
(TVET) Systems of Selected East Asian countries: South
Korea”, World Bank, Washington D.C.
Planning Commission, 2001a. “Report of theWorking
Group on Skill Development and Training for theTenth Five
Year Plan (2002-2007)”, Government of India, New Delhi.
Planning Commission, 2001b. “Task Forceon Employment
Opportunities”, Government of I ndia, New Delhi.
Planning Commission, 2002a. “Special Group on Targeting
Ten Million Employment OpportunitiesPer Year over the
Tenth Plan Period”, Government of I ndia, New Delhi.
86
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Planning Commission, 2002b. “Report of theCommittee
on Indian Vision 2020”, Government of I ndia, New Delhi.
Planning Commission, 2006a. “Working Group on Skill
Development and Vocational Training for theXI FiveYear
Plan”, Government of I ndia, New Delhi.
Pl anni ng Commi ssi on, 2006b. “Working Group on
Secondary and Vocational Education for theXI FiveYear
Plan”, Government of I ndia, New Delhi.
Planning Commission, 2006c. “TowardsFaster and More
InclusiveGrowth, An Approach to theEleventh FiveYear
Plan”, Government of I ndia, New Delhi.
Pl anni ng Commi ssi on, 2007. “Task Force on Skill
Development”, Government of I ndia, New Delhi.
Planning Commission, “FiveYear Plan documents”various
years, Government of I ndia, New Delhi.
TLS, 2007. “The Youth Unemployability Crisis: I ndian
Labour Report ”, Team Lease Services.
UN Country Team Chi na, 2005. “Advancing social
development in china contribution to the11th fiveyear plan”,
Occasional Paper Vol.1.
World Bank, 2002a. “World Bank Study on: Vocational Skills
Development in Sub-Saharan Africa- a Working Group
Review”, Working Group for I nternational Cooperation
in Skills Development, World Bank, ,, ,, Edinburgh.
World Bank, 2002b. “World Development Report”, World
Bank, Washington. D.C.
World Bank, 2002c. “Globalization, Growth and Poverty”,
World Bank and Oxford University Press, Washington,
D.C.
Worl d Bank, 2006. “I ndia’s Employment Challenge:
Creating jobs, helping workers”, World Bank. Washington
D.C.
World Bank, 2007. “Skill Development in India: The
Vocational Education and Training System”, World Bank,
Washington D.C.
Websites:
1.http://labour.kar.nic.in/eandt/etiindex.htm
2.http://dget.nic.in/schemes/cts/nvts.pdf
87
Ab b re viatio n s & Acro n ym s
ACF Ambuja Cement Foundation
ADB Asian Development Bank
AEPC Apparel Export Promotion Council
AI CTE All I ndia Council of Technical Education
AI TT All I ndia Trade Tests
APEDA Agricultural and Processed Food Products Export Development Authority
ASHA Accredited Social Health Activist
ATI Advanced Training I nstitutes
ATS Apprenticeship Training Scheme
AVI Accredited Vocational I nstitutes
BPL Below Poverty Line
CFQC&TI Central Fertiliser Quality Control & Training I nstitute
CIDC Construction I ndustry Development Council
CII Confederation of I ndian I ndustries
CI TS Craft I nstructor Training Scheme
CL Casual Labour
CPSEs Central Public Sector Enteprises
CSR Corporate Social Responsibility
CTI Central Training I nstitute
CTS Craftsmen Training Scheme
DES Directorate of Economics & Statistics
DGE&T Directorate General of Employment & Training
DIC District I ndustries Centre
DOEACC Department of Electronics Accreditation for Computer Courses
DRDA District Rural development Agency
DSDC District Skill Development Council
DSDCs District Skill Development Centres
DTP Desk Top Publishing
DWCUA Development of Women and Children in the Urban Areas
EDC / EDP Entrepreneurship Development Centres / Programme
ESDP Entrepreneurship Skill Development Programmes
FPTC Food Processing & Training Centres
GOI Government of I ndia
HHDC Handicrafts & Handlooms Exports Corporation
HRD Human Resource Development
HS Higher Secondary
HUDCO Housing and Urban Development Corporation
ICT I nformation and Communication Technologies
88
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
IDA I nternational Development Asociation
IIT I ndian I nstitute of Technology
I L&FS I nfrastructure Leasing and Financial Services
ILO I nternational Labour Organisation
I TC / I TI I ndustrial Training Centres / I nstitute
JSS Jan Shikshan Sansthan
KVIC Khadi and Village I ndustries Commission
LABS Livelihood Advancement Business School
LMI S Labour Market I nformation System
MAYA Movement for Alternatives and Youth Awareness
MES Modular Employable Skills
MHRD Ministry of Human Resource Development
MI S Management I nformation System
MI TI / MTI Model I ndustrial Training I nstitutes / Model Training I nstitutes
MoLE Ministry of Labour and Employment
MOU Memorandum of Understanding
MSME Ministry of Micro, Small and Medium Enterprises
MSME-DI Micro, Small and Medium Enterprises-Development I nstitute
NABARD National Bank for Agriculture and Rural Development
NAC National Apprenticeship Certificate
NCEUS National Commission for Enterprises in the Unorganised Sector
NCSD National Council on Skill Development
NCVT National Council for Vocational Training
NDDB National Dairy development Board
NGO Non-Governmental Organisation
NID National I nstitute of Design
NI ESBUD National I nstitute for Entrepreneurship and Small Business Development
NIFT National I nstitute of Fashion Technology
NIOS National I nstitute of Open Schooling
NI RD National I nstitute of Rural Development
NMCC National Manufacturing Competitiveness Council
NOAS National Open Apprenticeship Scheme
NORAD Norwegian Agency for Development Cooperation
NPPTI National Plant Protection Training I nstitute
NREGA National Rual Employment Gurantee Act
NRF National Renewal Fund
NSDCB National Skill Development Coordination Board
NSDP National Skill Development Policy
NSS / NSSO National Sample Survey / Organisation
NTC National Trade Certificate
NVTI National Vocational Training I nstitute
89
NYKS Nehru Yuvak Kendra Sangathan
OBC Other Backward Class
OECD Organisation for Economic Co-operation and Development
PI Partner I nstitutes
PMEGP Prime Minister Employment Generation Programme
PMRY Prime Minister’s Rojgar Yojana
PPP Public Private Partnership
PSU Public Sector Units
RDAT Regional Directorates of Apprenticeship Training
REGP Rural Employment Generation Programme
RS Regular Salaried
RUDESETI Rural Development and Self Employed Training I nstitute
RVTI Regional Vocational Training I nstitutes
SAI ED Special Accredited I nstitution for Education of the Disadvantaged
SC Schedule Caste
SCVT State Council for Vocational Training
SDC Skill Development Centre
SDF Skill Development Fund
SDI Skill Development I nitiative
SE Self Employed
SEWA Self Employment Women’s Association
SGSY Swaranjaynati Gram Swarozgar Yojana
SHG Self Help Group
SI RD State I nstitute of Rural Development
SJSRY Swarna Jayanti Shahari Rozgar Yojana
SOE State Owned Enterprise
SPV Special Purpose Vehicle
SSC Sector Skills Council
ST Schedule Tribe
STEP Support to Training and Employment Programme for Women
TVET / VET Technical and Vocational Education and Training
UCEP Underprivileged Children’s Education Programme
UGC University Grants Commission
UNDP United Nations Development Programme
UNIDO United Nations I ndustrial Development Organisation
UPSS Usual Principal and Subsidiary Status
USEP Urban Self Employment Programme
UT Union Territory
UWEP Urban Wage Employment Programme
VE Vocational Education
VoTEG Vocational Training for Employment Generation
VTP Vocational Training Provider
Ab b re vi a ti o n s & Acro n ym s
90
S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
An n e xu re 1 An n e xu re 1 An n e xu re 1 An n e xu re 1 An n e xu re 1
T TT TTer er er er erms of Ref ms of Ref ms of Ref ms of Ref ms of Refer er er er erence of the Commission ence of the Commission ence of the Commission ence of the Commission ence of the Commission
The Government of I ndia, constituted the National
Commission for Enterprises in the Unorganised Sector
(NCEUS) vi de Mi ni stry of Smal l Scal e I ndustri es
Resolution No. 5(2)/2004-I CC dated 20
th
September,
2004, under the Chai rmanshi p of Professor Arjun
Sengupta. The Terms of Reference of the Commission
are as follows:
i. Revi ew the status of unorgani zed/ i nformal
sect or i n I ndi a i ncl udi ng t he nat ure of
enterprises, their size, spread and scope, and
magnitude of employment;
ii. I dentify constraints faced by small enterprises
wi th regard to freedom of carryi ng out the
enterprise, access to raw materials, finance, skills,
entrepreneurship development, infrastructure,
technology and markets and suggest measures
to provide institutional support and linkages to
facilitate easy access to them;
iii. Suggest the legal and policy environment that
should govern the informal/unorganized sector
f or growt h, empl oyment , export s and
promotion;
iv. Examine the range of existing programmes that
relate to employment generation in the informal/
unorganized sector and suggest improvement
for their redesign;
v. I dent i f y i nnovat i ve l egal and f i nanci ng
i nstruments to promote the growth of the
informal sector;
vi. Review the existing arrangements for estimating
empl oyment and unempl oyment i n t he
informal sector, and examine why the rate of
growth in employment has stagnated in the
1990s;
vii. Suggest elements of an employment strategy
focussing on the informal sector;
viii. Revi ew I ndi an labour laws, consi stent wi th
labour rights, and with the requirements of
expandi ng growth of i ndustry and servi ces,
part i cul arl y i n t he i nf ormal sect or, and
improving productivity and competitiveness;
and
ix. Review the social security system available for
l abour i n t he i nf ormal sect or, and make
recommendations for expanding their coverage
91
An n e xu re 2 An n e xu re 2 An n e xu re 2 An n e xu re 2 An n e xu re 2
P PP PPast and P ast and P ast and P ast and P ast and Pr rr rresent Composit esent Composit esent Composit esent Composit esent Composition of the Commission ion of the Commission ion of the Commission ion of the Commission ion of the Commission
The composition of the Commission is as follows:
D DD DDr rr rr. .. .. Arjun S Arjun S Arjun S Arjun S Arjun Sengupta engupta engupta engupta engupta Chai rman Chai rman Chai rman Chai rman Chai rman
Chairman, [ From 20.09.2004 to 01.07.2005
Centre for Development and Human Rights, and from 17.11.2005 till date]
New Delhi
P PP PPr rr rrof of of of ofessor K. essor K. essor K. essor K. essor K. P PP PP. .. .. K KK KKannan annan annan annan annan Full-time Member Full-time Member Full-time Member Full-time Member Full-time Member
Fellow, [ From 01.11.2004 till date]
Centre for Development Studies,
Ulloor, Thiruvananthapuram 695011, Kerala
Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Professor Ravi S. Srivastava Full-time Member Full-time Member Full-time Member Full-time Member Full-time Member
Professor, [ From 01.05.2006 till date]
Centre for Studies in Regional Development,
Jawaharlal Nehru University, New Delhi 110067
S SS SShr hr hr hr hri i i i i V VV VV.K. .K. .K. .K. .K. Malhotr Malhotr Malhotr Malhotr Malhotra, a, a, a, a, I AS (Retd.) I AS (Retd.) I AS (Retd.) I AS (Retd.) I AS (Retd.) Member S Member S Member S Member S Member Secr ecr ecr ecr ecretar etar etar etar etary yy yy
[ From 01. 03.2006 till date]
S SS SShr hr hr hr hri B i B i B i B i B.N. .N. .N. .N. .N. Y YY YYugandhar ugandhar ugandhar ugandhar ugandhar Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Member Member Member Member Member, ,, ,, [ From 05.11.2004 till date]
Planning Commission,
New Delhi 110001
P PP PPr rr rrof of of of ofessor essor essor essor essor T TT TT.S .S .S .S .S. .. .. P PP PPapola apola apola apola apola Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Director, [ From 06.04.2005 ti ll date]
I nstitute for Studies in I ndustrial Development,
Vasant Kunj I nstitutional Area, New Delhi.110070
D DD DDr rr rr. .. .. K. K. K. K. K. Jai shankar Jai shankar Jai shankar Jai shankar Jai shankar Full-ti me Member Full-ti me Member Full-ti me Member Full-ti me Member Full-ti me Member
Former Vice Chancellor, Warangal University, [From 01.12.2004 to 9.03.2006]
Andhra Pradesh
S SS SShr hr hr hr hri Bibek Debr i Bibek Debr i Bibek Debr i Bibek Debr i Bibek Debro oo ooy yy yy, ,, ,, Part-time Member Part-time Member Part-time Member Part-time Member Part-time Member
Director, [ From 27.10.2004 to 20.12.2005]
Rajiv Gandhi I nstitute for Contemporary Studies,
New Delhi 110001.
Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Shri K.K. Jaswal, I AS (Retd.) Member S Member S Member S Member S Member Secr ecr ecr ecr ecretar etar etar etar etary yy yy
[ From 01.11.2004 to 18.02.2006]
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An n e xu re 3 An n e xu re 3 An n e xu re 3 An n e xu re 3 An n e xu re 3
Composit Composit Composit Composit Composition of the Advisor ion of the Advisor ion of the Advisor ion of the Advisor ion of the Advisory Boar y Boar y Boar y Boar y Board dd dd
1. 1. 1. 1. 1. P PP PPr rr rrof of of of ofessor Bhal c essor Bhal c essor Bhal c essor Bhal c essor Bhal chandr handr handr handr handra Mungekar a Mungekar a Mungekar a Mungekar a Mungekar, ,, ,,
Member, Planning Commission,
Yojana Bhavan, New Delhi.
2. 2. 2. 2. 2. Swami Agnivesh, Swami Agnivesh, Swami Agnivesh, Swami Agnivesh, Swami Agnivesh,
President, Bonded Labour Liberation Front,
13, South Avenue, New Delhi.
3. 3. 3. 3. 3. Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla, Professor Shei la Bhalla,
(Formerly Professsor of Economics,
Jawaharlal Nehru University, New Delhi)
I nstitute of Human Development,
Old I AMI Building (3rd Floor).
I .P.Estate, Mahatma Gandhi Marg,
New Delhi-110002.
4. 4. 4. 4. 4. P PP PPr rr rrof of of of ofessor Mahendr essor Mahendr essor Mahendr essor Mahendr essor Mahendra De a De a De a De a Dev vv vv, ,, ,,
Director, Centre for Economic and Social Studies,
Begumpet, Hyderabad.
5. 5. 5. 5. 5. Ms. Ms. Ms. Ms. Ms. Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar Madhu Ki shwar, ,, ,,
Editor, Manushi
C-1/3 Sangam Estate, 1, Underhill Road, Civil Lines,
Delhi -110054.
6. 6. 6. 6. 6. Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee, Ms. Mi rai Chatterjee,
Self-Employed Women’s Association (SEWA)
Opposite Victoria Garden, Bhadra, Ahmedabad-380001.
7. 7. 7. 7. 7. S SS SShr hr hr hr hri Jogi nder K i Jogi nder K i Jogi nder K i Jogi nder K i Jogi nder Kumar umar umar umar umar, ,, ,,
President,
Federation of Tiny & Small Scale I ndustries of I ndia (FTSSI ),
General Metal I ndustries, B-189, I ndustrial Estate,
Ludhiana, Punjab.
8. 8. 8. 8. 8. Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze, Professor Jean Dreze,
Delhi School of Economics, Department of Economics,
Delhi University, Delhi-110007.
9. 9. 9. 9. 9. Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri , Professor Ami t Bhaduri ,
Council for Social Development,
53, Lodhi Estate, New Delhi - 110003
93
An n e xu re 4 An n e xu re 4 An n e xu re 4 An n e xu re 4 An n e xu re 4
Composit Composit Composit Composit Composition and ion and ion and ion and ion and T TT TTer er er er erms of Ref ms of Ref ms of Ref ms of Ref ms of Refer er er er erence of the ence of the ence of the ence of the ence of the
T TT TTask F ask F ask F ask F ask For or or or orce on S ce on S ce on S ce on S ce on Skil kil kil kil kill F l F l F l F l For or or or ormat mat mat mat mation in the Unorg ion in the Unorg ion in the Unorg ion in the Unorg ion in the Unorganised S anised S anised S anised S anised Sector ector ector ector ector
A-25024/9/2005-NCEUS
Government of I ndia
National Commission for Enterprises in the Unorganized Sector
16
th
/19
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Dated the 9
th
June, 2005
ORDER ORDER ORDER ORDER ORDER
Subject: Constitution of Task Force on Skill Formation in the Unorganised Sector.
I t has been decided to set up a Task force on Skill Formation in the Unorganised Sector.
2. The composition of the Task Force shall be as follows:
Shri K.K.Jaswal, Member Secretary, NCEUS Chairman
Shri B.N.Yugandhar, Part Time Member, NCEUS Member
Dr.Madhav Chavan, Director, PRATHAM Member
Lt.General (Retd.) S.S.Mehta, Principal Adviser,CI I Member
Ms.Nalini Gangadharan, Executive Director, Member
Dr.Reddy’s Foundation
Shri K.K.Mittal, DGE&T, M/o Labour & Employment Member
Dr.S.D.Awale, Joint Education Adviser (Technical), Member
D/o Secondary & Higher Education
Shri Sharda Prasad, Labour Commissioner, Member
Government of Uttar Pradesh
Smt.Neelam Nath, Joint Secretary, NCEUS Member Secretary
Shri J.D.Hajela, Director, NCEUS will provide administrative and secretarial support to the Task Force.
3. The Terms of Reference of the Task Force shall be as follows:
3.1 I dentify the characteristics and specificities of skill formation in the Unorganised Sector.
An n e xu re
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
3.2 Review the existing arrangements for skill formation in the Unorganised Sector at the Central and
State levels.
3.3 Examine the adequacy of the training and skill development component of the current programmes
of wage employment and self-employment and recommend measures for improving their
effectiveness.
3.4 Recommend measures for optimally utilizing the existing infrastructure for training and skill
formation for addressing the needs of the Unorganized Sector.
3.5 I dentify the unmet as well as emerging demand for skill sets in an expanding and globalising
economy and devise an institutional framework to rectify the mismatch between demand and
supply of skills.
3.6 Study the characteristics of urban employment and under employment and assess the potential of
programmes of skill development as a strategy of employment generation in urban areas.
3.7 I dentify the best practices in the programmes of skill formation in the Unorganised Sector operated
by Government and Non-government organizations.
3.8 Design a National Skill Development I nitiative for the Unorganised Sector and suggest a strategy
for its implementation.
3.9 To consider any other matter related with or incidental to the above Terms of Reference.
4. The Chairman of the Task Force may co-opt any other person as Member of the Group.
5. The Chairman may invite specialists to particular meetings of the Task Force.
6. The Task Force shall submit its draft report within six months of the issue of the Order and its final
report within eight months.
7. The expenses towards TA/DA of the official members of the Task Force shall be met by the Government
Departments/I nstitutions to which they belong. The TA/DA of non-official Members and invitees to
meetings will be paid by NCEUS as admissible to Grade I Officers of the Government of I ndia.
( J.D.HAJELA)
Director (NCEUS)
To
1. Shri K.K.Jaswal, Member Secretary, NCEUS
19
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Telfax 011- 23701234
E mail : [email protected]
2. Shri B.N.Yugandhar, Part Time Member,NCEUS
Member, Planning Commission,
Yojana Bhawan, Sansad Marg,
New Delhi 110001
Ph:011- 23096566, Fax:011- 23096567
Email : [email protected]
95
3. Dr.Madhav Chavan, Director, PRATHAM
B3/3, Safdarjung Enclave, 1
st
Floor,
New Delhi 110029
Ph :011-26716083/84, Email: [email protected]
4. Lt.General (Retd.) S.S.Mehta, Principal Adviser,CI I
I ndia Development Foundation
249F, Sector 18, Udyog Vihar,
Phase I V, Gurgaon 122015
Tel :95124- 5014055/ 4535
5. Ms.Nalini Gangadharan, Executive Director,
Dr.Reddy’s Foundation
6-3-668/10/77&78, Durganagar Colony
Punjagutta, Hyderabad-82
Tel :040- 23414603/ 3186
Fax :040-23404607
Email : [email protected]
6. Shri K.K.Mittal, DGE&T, M/o Labour & Employment
108, Shram Shakti Bhawan,
Rafi Marg, New Delhi 110001
Tel: 011-23710446, E mail : [email protected]
7. Dr.S.D.Awale, Joint Education Advisor (Technical), D/o Secondary
& Higher Education, Ministry of Human Resource Development,
Shastri Bhawan, New Delhi 110 001
8. Shri Sharda Prasad, Labour Commissioner,
Government of Uttar Pradesh, G.T.Road, Kanpur
9. Smt.Neelam Nath, Joint Secretary, NCEUS
16
th
Floor, Jawahar Vyapar Bhawan,
1 Tolstoy Marg, New Delhi 110001
Telefax 011-23701069, E mail : [email protected]
Copy to: Copy to: Copy to: Copy to: Copy to:
1. Secretary, Ministry of Labour and Employment
Shram Shakti Bhawan,Rafi Marg, New Delhi 110001
2. Secretary, Department of Secondary & Higher Education,
Ministry of Human Resource Development,
Shastri Bhawan, New Delhi 110001
3. Chief Secretary, Govt. of Uttar Pradesh
Lucknow, Uttar Pradesh.
Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to: Copy for i nformati on to:
1. PPS to Chairman
2. PPS to Member Secretary
3. PPS to Member (K)
4. PPS to Member ( J)
5. Director (MS)
6. Director ( JDH)
7. Director (MK)
8. Deputy Secretary (SVRM)
An n e xu re
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs, Summary of Comments by Central Ministries, State Governments, NGOs,
Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment Academia and others on the Draft Report on Skill Formation & Employment
Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector Assurance in the Unorganised Sector
S.No. S.No. S.No. S.No. S.No. Organi sati on Organi sati on Organi sati on Organi sati on Organi sati on Comments Comments Comments Comments Comments
An n e xu re 5 An n e xu re 5 An n e xu re 5 An n e xu re 5 An n e xu re 5
I. Central Ministries Central Ministries Central Ministries Central Ministries Central Ministries
1. Ministry of Micro, Small and Medium Enterprises
1. The Ministry is in agreement with the Commission's view that
formal systems of skill imparting are essential for the growth of
the informal sector.
2. Commission may explore the possible avenues/models through
which skills development could be imparted in the informal sector
and provide a framework for such programmes in the report.
2. Ministry of Communications and Technology,
Department of Technology
No specific comments.
3. CMinistry of Tourism 1. The Ministry of Tourism is alive to the need of upgrading the
skills and building capacities of service providers of the industry.
To this end, the Ministry has commenced the scheme of Capacity
Building for Service Providers under which training are undertaken
to cover a wide range of services. For the promotion of rural
tourism, the Ministry extends assistance for capacity building in
selected villages.
4. Ministry of Youth Affairs and Sports 1. The Ministry has formulated a new scheme of National Programme
for Youth and Adolescent Development. One component of this
scheme is Youth Leadership and Personality Development which
prescribes various skill development programmes for adolescent
youth through NGOs. Nehru Yuvak Kendra Sangathan also
conducts various personality development programmes to guide
and empower the village community.
II. State Governments State Governments State Governments State Governments State Governments
1. Madhya Pradesh
1. Employment Exchanges, by virtue of having a very systematic and
classified database available with them, can function with close
collaboration with proposed district level link of informal skill
development plan. They can very well take up the role of a
sponsoring agency in the scheme proposed by the Commission.2.
Though Employment Exchanges have their own employment
market information system which works reasonably well with public
sector but is not very effective as far as private and unorganized
sector is concerned. The present system will have to be modified,
strengthened and revamped to enable it to take up additional
responsibilities.
2, Punjab Programme for Employment Assurance and Skill Development
1. I ncentive of wage subsidy is attractive
2. On-job training/employment should be post certification under
SDI
97
S.No. S.No. S.No. S.No. S.No. Organi sati on Organi sati on Organi sati on Organi sati on Organi sati on Comments Comments Comments Comments Comments
3. Pre-certification on job training/employment may be allowed where
the VTP and the employer are the same unit.
4. Monitoring of the training programme needs to be worked out
5. Provision for certification need not be made under the scheme as
it is already provided for under the SDI .
3. Uttar Pradesh 1. The unorganized sector hasto be provided with basic education, skill
development, vocational training and credit facilities for its
development, as has been correctly identified by the Commission in
itsreport. The machinery responsible for thisat the central, State and
district levels needs to be effectively mobilised with the cooperation
of the central and State Governmentsand the banking system. SHGs,
and micro finance institutions should also be made a part of it.
2. The unorganized sector is not the responsibility of a single Ministry
but i s the col l ecti ve responsi bi l i ty of al l the Mi ni stri es/
Departments.
3. I n UP the I ndustries department is implementing a number of
schemes for skill upgradation and employment generation in the
unorganized sector.
III. NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others NGOs, Academia and Others
1. Ms. Swaminathan, MI DS, Chennai 1. While the report has brought out very well the complex character
of the unorganized sector, the recommendations do not reflect
this complex understanding of the sector. The skill development
programme to be i nsti tuted and operati onali sed has to be
organically linked to the findings of the NCEUS.
2. The Commission should do a minute scanning, scheme by scheme,
of the GOI programmes to decipher whether, how far and which
segment/category of the unorganized sector the GOI programmes,
when operationalised , will address.
3. NCEUS's recommendations should explicitly engage with the
theme of monitoring, supervision and accountability of all skill
development programmes that it recommends for the unorganized
sector.
4. The Chapter on I nternational Experiences would have been more
enriching if it had stressed in particular the authority structure,
delivery mechanism, systems of incentive /disincentives, etc. that
countries such as Germany, Japan and South Korea have put in
place to operationalise their vocational education programmes.
5. The report has very little to say on the issue of certification. Since,
very rightly, the report stresses the need for formal certification of
training for the unorganized sector, the operationalisation of the
theme and scheme of certification merits elaboration.
6. The report has very little to say, explicitly, on the role of the private
sector in vocational training.
An n e xu re
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S k i ll F o rm a ti o n a n d E m p lo ym e n t Assu ra n ce i n th e U n o rg a n i se d S e cto r
S.No. S.No. S.No. S.No. S.No. Organisation Organisation Organisation Organisation Organisation Comments Comments Comments Comments Comments
2. Ms Jeemol Unni 1. Good report. However, the overall flavour in the recommendations
is that the Commission accepts the broad contours of the Skill
Policy and organizational structure which is being set up by the
Govt.]
2. The only new thing about Commission's recommendations is the
Programme for Employment Assurance and Skill Formation.
This is an innovative idea. However, the very bureaucratic emphasis
on defining the employers and beneficiaries/trainees and the modus
operandi of the programme is not likely to let this system bloom.
3. I t might be useful to scatter the report with examples of women's
work and how would women fare in the new scheme.
4. To get over the excessive emphasis on bureaucratic control it may
be useful to give some specific role to NGOs, informal trade
unions etc in the setting up or in helping the system reach the
backward areas, poor, disadvantaged, women, etc.
3. Dr. Sandra Rothboek, I LO, Delhi 1. The report could add a few things, particularly in the context of
the informal and how learning within such a framework and with
these groups is distinct from the typical root learning of other
educational systems.
2. Skills cannot be isolated from a) health, b) livelihood/income and
c) literacy and numeracy and d) empowerment. This framework
is important to be added.
3. Capability approach is crucial. The key to learning is to make use
of the learning acquired for a) productive purposes and b) life by
itself. This might be important also in the context of poor
enterprises and unorganized sector per se.
4. The Lifelong learning concept, policy and overall framework of
Philippines may be studied in the context of the report
4. Federation of Tiny & Small I ndustries of I ndia 1. The Distance Education Programmes are very useful as the
students can learn while they earn.
2. Skill Development Programmes of Department of Science and
Technology needs to be strengthened.
3. The outcome of the scheme of training of retrenched workers
should be examined. The scheme needs to be strengthened and
coverage extended to more areas.
4. The National Board may launch the mission for expansion of skill
not only in the unorganized sector but also in the micro/small
enterprise sector.
5. A National level body should be created for accreditation of skill
development training centres.6. Concrete steps may be taken for
upgradation of skills of the micro-enterprise sector.
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