Skill training: An incomplete solution to India’s unemployment crisis

In 2015, with much fanfare, the Union government launched a skill certification scheme to train youngsters with industry-relevant skill sets to make them employable.

Since then, the Union government has implemented three versions of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), training about 1.37 crore individuals in different streams. The Centre had, in the 2023-24 Budget, announced that PMKVY 4.0 would be rolled out very soon.

Yet, eight years on, the core objective of the scheme remains unfulfilled. Placement data available on the PMKVY dashboard paints a bleak picture. Of the 1.37 crore trained in vocational and manufacturing streams, only 24.51 lakh have been placed.

Simply put, the data says that only one out of four persons who underwent the skill training have got jobs in the past eight years, raising a slew of questions on the scheme’s implementation. Is the low placement rate a reflection of the job market in India? Or is it the scheme that has failed to capture the changing requirements and realities of employment today?

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In 2015, the youth unemployment rate stood at 21.74 per cent in India according to International Labour Organisation estimates. The percentage has been climbing over the years and is estimated to have reached 28.26 per cent in 2021, despite efforts like the PMKVY.

The Lok Sabha Parliamentary Standing Committee on Labour, Textiles, and Skill Development had in its 2022 report expressed deep concern over low placement rates, contending that these statistics are the “real barometer” for measuring the success of the scheme.

The report, which is now in the public domain, also asked the Centre to work with all stakeholders to ensure that the placement of the certified candidates is enhanced to an “appreciable extent.”

The Committee also raised concerns over the underutilisation of funds allotted for the scheme by emphasising regular monitoring and strict follow-up.

Industry trackers reason that placement rates are abysmally low not necessarily due to a lack of demand in the job market as several industries, like manufacturing and textiles, still face a huge shortage of skilled workers.

Under PMKVY, training was provided in about 40 streams and placements were good in some and very poor in a few, some insiders noted.

Industry perspective

The high percentage of dropouts, “poor interest levels” among participants, lack of reporting after placements and opting for higher studies are some of the reasons they attribute to the scheme’s poor performance.

Students report that lack of job opportunities in their vicinity and wages that do not match the cost of living are some reasons why skill training fails to address the problem at hand.

From the industry perspective, Srihari Balakrishnan, president of Sri Kannapiran Mills Limited, says youngsters in Tamil Nadu are unwilling to work in factories as they believe the pay is low and aspire towards better jobs. Many trainees go on to pursue college education (the Gross Enrolment Ratio in TN is over 50 per cent) in search of high-paying jobs.

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“The western region alone, which comprises the textile and industrial hubs of Erode, Tirupur and Coimbatore, can provide jobs for at least 3 lakh people immediately. Students here want to get into high-end manufacturing instead,” Balakrishnan adds.

M V Ramesh Babu, an entrepreneur and member of Coimbatore District Small Industries Association, an influential industrial body, puts it bluntly.

“TN students are not interested in manufacturing and are even ready to go to the service sector and work as gig workers,” he adds. This mismatch between student expectations and the requirements of the job sphere has not been bridged by skilling courses, leading to poor interest among the youth.

Dropout proportions

Another reason that training centre heads from Karnataka, Tamil Nadu and Kerala to West Bengal and Gujarat cite for the low placement rates is significant dropout proportions — which stands at 20 per cent according to the Parliamentary Committee report. Low interest and lack of incentives to continue are among the chief reasons students discontinue their training.

Anbuthambi Bhojarajan, Educationist, Author and Skill Development expert, says, “People do not stick around and the interest level is poor. The aspiration for some courses is very low. Skill centres should start looking at the complete value chain and should take ownership of the system.”

Contending that PMKVY’s poor placement rate does not necessarily mean that there are no jobs, Thambi says that skill sets are not being valued.

“The problem is some sectors treat both the trained and skilled and unskilled workers equally. A person who has completed a certificate course in a particular skill set expects better pay than one who is unskilled. But the industry does see them as one. So, skilled candidates go for jobs that will pay them more. Ultimately it is about money and aspirations,” he adds.

Jayanth V, who has been running a training centre in Karnataka since 2008, told DH that students changing their goals or aspirations could be one reason for low placement rates.

“Many students return to higher education at the end of the training. We have always seen a lack of interest among a few trainees in each batch as the course is free of cost. They show interest in the start, but their attitude changes as the course progresses,” he says.

In Ajeesh V’s centre in Kerala, 80 per cent of trainees in vocational courses were placed. “The success rate was high in a few courses and low in some, and I believe that is how things are,” he adds.

Some trainees also view such courses as an avenue towards entrepreneurship. R Selvaraj, who has been contracted to train people in the textile sector, explains that many who came were unwilling to go through the placement process. They had availed of the course as they were curious whether the certificate would help them qualify for business. “A few people we trained did get loans and now run small businesses, but we are not sure about others,” he says.

Probal Dey, an arts student from Dakshin Dinajpur district in West Bengal, explains his motive for participating in the training, “I considered the course as it offers scope for employment, which is not always possible with a college degree. In the long run, I intend to run my own lab,” says Dey, who is studying medical lab courses.

Proximity to jobs

Sumit Kumar, chief business officer, TeamLease Degree Apprenticeship, tells DH that individuals may be hesitant to migrate to areas where jobs are available, as it is a function of the compensation offered.

Vimal, who manages training centres in Dharwad, says many students end up rejecting job offers as they are unwilling to relocate from their hometowns as they feel the skills they possess will yield a salary that will not sustain them in a city where the cost of living is higher.

“In a batch of 60 retail associate trainees, only 12 students were able to continue. After one to two years, their salaries increased. But some are reluctant to stay for that period of time,” Vimal says.

Satheesh*, a 20-year-old retail associate trainee from Dharwad, for instance, says he did not opt for placement opportunities as the salary he was offered was low. “In Hubballi, there are limited options. If we are to travel to bigger cities, then we will have to pay rent, manage groceries and more, which the starting salary will not cover. So, we look for other opportunities,” he says.

“Additionally, the wage premium for skill remains distant, leading to the possibility of employment in the informal sector instead of the organised sector. Furthermore, as the world of work evolves at a rapid pace, the required skill set is also changing quickly, resulting in faster redundancy,” Kumar adds. Skill training courses seldom take into account such rapid changes in the job sphere.

Funding pattern

While the Parliamentary Committee flagged underutilisation of funds, those who are on the ground said the funding pattern was such that 20 per cent of the amount is credited to the centres when they enroll candidates, 50 per cent after the completion of training, and the remaining 20 per cent only after placement.

“After a point, many training centres decided to forego the 20 per cent money (that is released after placements) as they found it difficult to follow up with students. When a training centre decides not to update the placement column, obviously the rate of placement will be low. But this is not the only reason,” a training centre head in TN says on the condition of anonymity.

Will changing the funding model help? Thambi says risks will be much higher if the government makes the full payment only when placement is done. “Centres will not invest in students without knowing whether they will continue. Continuing the scheme is the only way. Another way of looking at it is that at least some percentage of individuals are getting skilled and landing jobs,” he adds.

Kumar says pedagogy, relevance and employability are three factors that one should consider while designing training programmes with an emphasis not just on soft skills but also on cognitive skills. Developing digital skills is an added advantage in today’s world.

“Furthermore, having qualified trainers from the industry is crucial to ensure that the training is effective. While many industry players are involved in implementing training programmes, the scale of their involvement must increase significantly,” Kumar adds.

Among other reasons, reluctance to relocate may indicate high costs of living in towns and cities and low starting salaries. In Dharwad for instance, Vimal, who manages training centres explains that it is the proximity to hometowns that many trainees prefer. “Many students who complete the course and are placed end up rejecting job offers since they are unwilling to relocate,” he says.

Curriculum

There are also complaints about the training course and curriculum under the PMKVY. The Parliamentary Committee and experts alike point out that the revamp should be aligned with actual industry requirements.

However, Balakrishnan and Prabhu Damodaran, (one person? Or two) secretary, Indian Texpreneurs Federation (ITF), says one positive impact of PMKVY was that it gave a specific structure to the training programmes that were being conducted by companies in different formats.

“It gave the industry a standard training format which helped. Standardisation and uniformisation of curriculum is helpful as the skill level and methodology are the same,” he says.

Kumar opines that PMKVY 4.0 should be aligned to the National Credit framework, which should allow the trainee to pursue further education, which helps in vertical mobility. “The scheme’s integration with higher education courses will make the programme more attractive,” he adds.

However, Rajeev Menon, a Kochi-based social entrepreneur, feels that skill development is not the real solution to address unemployment.

“The government should instead come out with a policy that would open up more job opportunities. Making available skilled personnel without adequate job opportunities would not help in addressing unemployment,” he says.

(With inputs from Arjun Raghunath in Thiruvananthapuram, Sweekruthi K and Varsha Gowda in Bengaluru, Mohammed Safi Shamsi in Kolkata, and Sathish Jha in Ahmedabad)