Upbeat about India

Upbeat about India
Indian Prime Minister Narendra Modi (R) talks with Minister of State Skill Development & Entrepreneurship (Independent Charge) Rajiv Pratap Rudy during the launch of the 'Skill India' initiative in New Delhi on July 15, 2015.
PHOTO: AFP

IN MAY 2014, Mr Narendra Modi's Bharatiya Janata Party (BJP) won a landslide victory in India's election for its pro-growth election promises.

Immediately, hopes rose that the new government would adopt economic reforms that would be in sharp contrast to the policy paralysis that had plagued the United Progressive Alliance rule.

The last one year or so witnessed the prime minister making significant decisions on the economic front.

Mr Modi liberalised foreign direct investment in defence, railways, real estate and insurance which was cheered by the corporate community.

Further evidence of the effort towards economic transformation was the "Make in India" campaign, launched in September 2014 to encourage companies to manufacture their products in India.

The focus on 25 key sectors is aimed at creating jobs and enhancing skills.

The other key initiatives include the commitment to build 100 smart cities and industrial corridors, Digital India, Adarsh Gram Yojana (Rural Development Programme) and labour reforms.

The government also opened the cash-strapped railway infrastructure segment, such as high-speed trains, to foreign investment.

In addition to the promise to eventually deliver electricity 24 hours a day, Mr Modi has promised to build 30km of roads a day two years from now.

The Swachh Bharat (Clean India) campaign has also been hailed as a well-meaning exercise at waste management.

Launch of Skill India Campaign

Perhaps the Indian prime minister's most ambitious reform initiative is the launch of the Skill India Campaign last month.

This project aims to train over 400 million people in India in different skills in the next seven years. According to the Indian National Sample Survey, more than 100 million new workers will join the labour market and require skills training by 2022.

In addition, close to 300 million of the existing workforce will require additional skills training over the same period.

Data released by the Indian government shows that only an estimated 2.3 per cent of the Indian workforce has undergone formal skills training.

This pales in comparison to 68 per cent in the UK, 75 per cent in Germany, 52 per cent in the US and 80 per cent in Japan, and 96 per cent in the workforce have little or no job skills, making them largely unemployable.

There are several key issues that the Modi government must address in this area. Firstly, India suffers from a shortage of training institutions.

An estimated 13 million Indians enter the workforce every year and the country only has a training capacity of less than five million people.

The current government has indicated that it has under its charge some 12,000 industrial training institutes in the country and it aims to set up a skill university in every state. These are initiatives in the right direction.

However, there are other critical challenges.

These include a demand-supply mismatch. Linked to this is the issue of low industry interface.

It is important for the Indian government to bridge qualitative, quantitative and systemic gaps for the initiative to enjoy success in the long run.

"Skills Development in India" Initiative

Several of these challenges were also highlighted in a workshop organised by Singapore Management University (SMU), in partnership with London School of Business, in Mumbai earlier this year.

Twenty-six participants, comprising practitioners, academics, policymakers and corporate representatives, attended the two-day workshop.

So what are the first steps towards addressing these challenges? Beyond developing the hardware, India needs to deal with three key pre-requisites.

Firstly, it must remove the fear of failure that afflicts people from pursuing entrepreneurship. In this regard, support structures should be set up for those keen to pursue the entrepreneurial path.

A change of mindset is also needed from eulogising mere success to embracing failures and extracting valuable lessons from them.

Secondly, the Indian education system needs some re-conditioning to ensure that there is more stress on practice and less on theory.

Simply put, there must be greater "touch and feel" rather than abstraction. Lastly, greater emphasis should be placed on apprenticeships so that Indians have the opportunity to learn on the job - they need not worry about their livelihood while they learn a skill.

IN MAY 2014, Mr Narendra Modi's Bharatiya Janata Party (BJP) won a landslide victory in India's election for its pro-growth election promises. Immediately, hopes rose that the new government would adopt economic reforms that would be in sharp contrast to the policy paralysis that had plagued the United Progressive Alliance rule.

The last one year or so witnessed the prime minister making significant decisions on the economic front. Mr Modi liberalised foreign direct investment in defence, railways, real estate and insurance which was cheered by the corporate community.

Further evidence of the effort towards economic transformation was the "Make in India" campaign, launched in September 2014 to encourage companies to manufacture their products in India. The focus on 25 key sectors is aimed at creating jobs and enhancing skills.

The other key initiatives include the commitment to build 100 smart cities and industrial corridors, Digital India, Adarsh Gram Yojana (Rural Development Programme) and labour reforms.

The government also opened the cash-strapped railway infrastructure segment, such as high-speed trains, to foreign investment.

In addition to the promise to eventually deliver electricity 24 hours a day, Mr Modi has promised to build 30km of roads a day two years from now. The Swachh Bharat (Clean India) campaign has also been hailed as a well-meaning exercise at waste management.

Launch of Skill India Campaign

Perhaps the Indian prime minister's most ambitious reform initiative is the launch of the Skill India Campaign last month.

This project aims to train over 400 million people in India in different skills in the next seven years. According to the Indian National Sample Survey, more than 100 million new workers will join the labour market and require skills training by 2022.

In addition, close to 300 million of the existing workforce will require additional skills training over the same period. Data released by the Indian government shows that only an estimated 2.3 per cent of the Indian workforce has undergone formal skills training.

This pales in comparison to 68 per cent in the UK, 75 per cent in Germany, 52 per cent in the US and 80 per cent in Japan, and 96 per cent in the workforce have little or no job skills, making them largely unemployable.

There are several key issues that the Modi government must address in this area. Firstly, India suffers from a shortage of training institutions.

An estimated 13 million Indians enter the workforce every year and the country only has a training capacity of less than five million people.

The current government has indicated that it has under its charge some 12,000 industrial training institutes in the country and it aims to set up a skill university in every state.

These are initiatives in the right direction.

However, there are other critical challenges. These include a demand-supply mismatch. Linked to this is the issue of low industry interface.

It is important for the Indian government to bridge qualitative, quantitative and systemic gaps for the initiative to enjoy success in the long run.

"Skills Development in India" Initiative

Several of these challenges were also highlighted in a workshop organised by Singapore Management University (SMU), in partnership with London School of Business, in Mumbai earlier this year.

Twenty-six participants, comprising practitioners, academics, policymakers and corporate representatives, attended the two-day workshop.

So what are the first steps towards addressing these challenges? Beyond developing the hardware, India needs to deal with three key pre-requisites.

Firstly, it must remove the fear of failure that afflicts people from pursuing entrepreneurship. In this regard, support structures should be set up for those keen to pursue the entrepreneurial path.

A change of mindset is also needed from eulogising mere success to embracing failures and extracting valuable lessons from them.

Secondly, the Indian education system needs some re-conditioning to ensure that there is more stress on practice and less on theory.

Simply put, there must be greater "touch and feel" rather than abstraction. Lastly, greater emphasis should be placed on apprenticeships so that Indians have the opportunity to learn on the job - they need not worry about their livelihood while they learn a skill.

Arising from the workshop, SMU and Mahindra & Mahindra have teamed up to focus on collaborative research on the skilling ecosystem in India with specific reference to the automotive industry.

The relevant actors from the automotive ecosystem have been roped in for the study - they are drawn from a diverse set of organisations representing the government, industry, academia and organisations and agencies which can contribute to the study due to their knowledge of the automotive industry and India's skilling needs.

The finalised paper will be during the Society of Indian Automobile Manufacturers Conclave in India in December. Thereafter, the finalised recommendations are likely to be presented to the Indian government.

In May, 27 key members, representing SMU management, all six schools and various offices, were part of SMU's most significant study visit to India in its 15-year history.

The delegates participated in diverse interactive platforms, ranging from dialogues, panel discussions and presentations to corporate visits and networking receptions. All in all, they met more than 25 Indian organisations.

A recurrent theme that emanated from meetings and discussions was that India enjoys immense demographic dividend and there is a need to harness it.

Indian businesses also point to opportunities arising largely from political stability, a well-established legal system, a fast-growing economy, a huge internal market, reform agenda in motion and an entrepreneurial mindset.

India has the capacity to become only the fourth economy in the world to hit the US$5 trillion mark after the US, Japan and China.

Skilling the country will be an important determinant in this regards.

The reform announcements in the last 14 months are reflective of the Modi government's seriousness in transforming India's economy.

There is no better time for India to realise its true economic potential.

It certainly can!

Hernaikh Singh is head of India Initiatives, International Office, at Singapore Management University.

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