India faces worker skill crisis with 73% lacking advanced education
What's the story
India's workforce is facing a major challenge, as revealed by the data presented at the recently concluded 5th National Conference of Chief Secretaries (NCS). The conference found that around 73% of employed Indians have only basic education. This raises concerns about whether the country's workforce is prepared for future job demands. The conference was chaired by Prime Minister Narendra Modi from December 26-28 and focused on developing 'Human Capital for Viksit Bharat.'
Sectoral challenges
IT and engineering sectors face severe talent shortage
The NCS also highlighted that the employability rate among youngsters is stuck at 54.8%. At the same time, IT and engineering companies are facing a massive 63% talent shortage. This stark contrast between education levels and sector-specific requirements further underscores the need for skill development initiatives to make India's workforce job-ready for future demands.
Productivity link
Years of schooling directly impact productivity
A presentation by the Ministry of School Education at the conference revealed a direct correlation between years of schooling and productivity. India currently has an average of 13.87 years of schooling, resulting in a labor productivity rate of 10.68 GDP per hour worked. This is lower than countries like Russia (14.91 years, 25.85 GDP/hour), the US (15.92 years, 81.8 GDP/hour), and Brazil (15.79 years, 23.68 GDP/hour).
Economic impact
Each additional year of schooling boosts GDP by 0.37%
The conference also noted that each additional year of schooling is estimated to boost India's GDP by 0.37%. Over the past two decades, India has improved its average years of schooling from 9.05 years in 2000 to today's figure of 13.87 years. However, basic education still dominates with a large percentage (47.7%) at the basic level and only a small fraction (13.8%) at an advanced level in terms of worker skill levels across various sectors.
Employment distribution
Agriculture employs largest share of workforce
The conference also highlighted that agriculture employs the largest share of India's workforce at 45.5%, followed by trade/hotels/restaurants (12%) and construction (11.5%). To make India's vast population an asset rather than a challenge, officials stressed on shifting labor from agriculture to formal-sector jobs through skill training and policies aimed at boosting female workforce participation, which currently stands at just 31%.