India, with its rapidly growing population and a significant proportion of its citizens under the age of 35, faces a pressing need to address the demand for a skilled workforce. However, despite this urgency, a mere 5% of the population is formally recognized as skilled, with a staggering 75% having received non-formal training (Agrawal and Agrawal, 2017). In this article, we explore the reasons behind the need for skilling in India and delve into the challenges faced by its workforce. Additionally, we discuss the significance of gender parity in the workforce and the potential economic benefits of empowering women. Finally, we examine the critical junction at which India finds itself, where the success of its young workforce holds the key to either economic prosperity or widespread unemployment.
Growing Workforce, Limited Skilled Labor
The Workforce Landscape in India
India witnesses the addition of approximately 12 million individuals to its workforce each year, presenting a substantial challenge for employment (Government of India, 2016). While the workforce continues to expand, the demand for skilled labor intensifies. Unfortunately, the current scenario reveals that the uptake of vocational training in India falls short of meeting this demand.
Unemployment and Employment Patterns
Recent employment statistics in India paint a challenging picture, with an overall unemployment rate of 7.4% as of December 2019 (CMIE, 2019). It is noteworthy that the majority of the working population falls into categories other than salaried employment, with 51.4% identifying as self-employed and 30.2% engaged in casual employment (ILO, 2018a). Despite significant progress in reducing poverty levels, India still harbors the largest population living in multidimensional poverty, numbering at approximately 354 million (University of Oxford, 2018).
Informal Sector Dominance and Limited Manufacturing Focus
The agricultural sector remains the largest employer in most Indian states, with 81% of employed individuals working in the informal sector, of which 64% are involved in non-agricultural employment (ILO, 2018b). This concentration of employment in farming and the informal sector underscores the limited emphasis on the manufacturing sector. While India has made strides towards transitioning from an agrarian population to an industrial one, this progress has been primarily centered in urban areas.
Gender Parity and Female Workforce Participation
Declining Female Labor Force Participation
India has witnessed a decline in female labor force participation since 2005, with the current rate recorded at a mere 23% for women above the age of 15 (World Bank, 2019). Notably, women with limited education are more likely to participate in the labor force compared to those with secondary education, highlighting a U-curve relationship (Fletcher, Pande, & Moore, 2018). Furthermore, women in India spend significantly more time on unpaid care work compared to men, with an average of 297 minutes per day versus 139 minutes per day (ILO, n.d.).
Unlocking the Potential: Advancing Gender Parity
Advancing gender parity in work and society has immense potential for India. A report by McKinsey suggests that by achieving gender parity, India could boost its GDP by up to $770 billion, an increase of over 18% (Woetzel et al., 2018). The resistance to women entering the workforce stems from social and individual beliefs, impacting higher education, skilling, employment, entrepreneurship, and income generation opportunities.
The Critical Juncture: Skilling for Economic Progress
The Choice at Hand
India finds itself at a pivotal juncture, where the youth workforce can either serve as a powerful demographic dividend propelling the country’s economy forward or face the consequences of widespread unemployment and economic struggle. Although certain sectors have job vacancies, there exists a significant gap between the skills required and those possessed by the potential labor force. While formal skilling, such as pursuing an advanced degree from an accredited university, is a viable option in many countries, Indian youth often face high opportunity costs associated with spending years out of work to pursue such degrees. Short-term training programs present a feasible pathway for skill development and livelihood enhancement.
Bridging the gap between the growing workforce and the demand for skilled labor in India is an imperative task. By investing in comprehensive skilling initiatives, addressing gender disparities, and aligning the workforce with evolving job market requirements, India can unlock its tremendous potential for economic growth and prosperity. Empowering the youth with relevant skills and providing equal opportunities for women will not only benefit individuals but also contribute to the overall development of the nation.