Human resources from the point of view of a country refers to people who contribute to the growth and economic development. Some examples are

  • People who are employed in an organized sector contributes to the direct taxes
  • People who are employed in unorganized sector also indirectly contributes to the economy
  • People who are involved in public service are needed for the smooth functioning of Government
  • Students who are getting educated form the future of Human Resources that the country would require

In general socio economic upliftment of people through poverty alleviation, urban slum development, rural development etc., also contributes to improvement in human resources.

Human Resources in India

  • India has a population of 1.3 billion. Its huge population is a great advantage for India. Another notable feature of Indian population is its Demographic Dividend. It refers to people in the age group of 15-59 years.
  • More than 64% of Indian population lies within this age group and hence India has a tremendous potential for providing education and creating additional employment and thus improve its economic growth.

India needs to utilize its potential of demographic dividend. The following are some ways in which we can do it

  1. Creating Entrepreneurs
  2. Creation of more jobs
  3. Skilling our population
  4. Focus on creating rural employment opportunities
Basic Facts
  • Demographic dividend – 65% of total population in working age (15-59 years).
  • Labour force projections – By 2030, 1/3rd of world’s working population will be from India.
  • 27.5% of total population is youth (15-29 years).
  • By 2022, 109 Million skilled workers will be needed for 24 key sectors in India.
  • Dilapidated present situation:
    • Only 2.3% of Indians have formal skill training.
    • 58% of employers in India find hard to find suitable candidates.
    • 47% of graduates in India are not employable.

Creating Entrepreneurs

Creating more entrepreneurs is important for the following reasons

  • It the short run it reduces unemployment to an extent
  • In the long run it creates more jobs and reduces unemployment significantly

Government has launched its ambitious Startup India and Standup India programmes to achieve this

Startup India and Standup India programmes: 

  • Startup India scheme was launched for promoting entrepreneurship. They aim at creating more number of startups by providing easier access to funding and lesser government regulations to encourage them.
  • Standup India scheme was launched to encourage entrepreneurship among women, Scheduled Castes (SC) and Scheduled Tribes (ST) 
  • Rural India is also aimed to be covered through Deen Dayal Upadhyay Swaniyojan Yojana 

What is a Startup?

  • An entity which is less than 5 years old and
  • whose turnover is less than 25 crores in the last 5 years and
  • is concerned with research, innovation and technology

Core Features of this Scheme:

Startup India

Creation of more jobs

India has achieved a tremendous economic growth in the past decade. However this growth has not created more jobs for its population. This is called Jobless Growth.

The manufacturing sector has huge potential to create additional employment. But the government needs more investments to improve this sector. Thus the Government announced its flagship Make in India Program.

Make in India

  • Make in India program was launched to encourage both foreign and domestic companies to manufacture their products in India. It aims at making India a global manufacturing hub. The following flowchart explains the major focus areas of Make in India.
Make in India

Followup to this Scheme:

  1. India emerged as the top global destination for Foreign investment after the launch of this scheme
  2. Make in India focuses on 25 major sectors of the economy
  3. As a policy measure 100% FDI is allowed in most of these major sectors
  4. Ease of doing business was also improved to facilitate the companies to set up their businesses easily

Potential For Jobs:

Make in India initiative covers all important sectors of the economy and hence it has the potential to create more jobs. Some examples are as follows

  • Sectors like textiles, garments and leather are labour intensive
  • Food Processing sector can become a boon to farmers and rural employment
  • Sectors like electrical and electronics are in a nascent stage and thus there is a huge scope

Improving Skill Development

Skill development refers to imparting employable skills to the people. The requirements of the industries for employment are not met by the conventional education system. It is estimated that only 2.3% of the workforce in India has undergone formal skill training as compared to 75% in Germany and 68% in the UK.

Skill India: 

Skill India initiative aims to provide skill training to 40 crore people in India. The broad components of the scheme are given in the chart below

Skill India

Need for Skill Development

  • GDP Structure: Growth in GDP has been accompanied with decreasing agricultural share and increasing manufacturing/services share. Need of well trained workers to meet the skill deficit in these rapidly growing sectors.
  • Employment trend: The employment elasticity of agriculture has turned negative. But even the alternate employment in secondary/tertiary sectors is in informal sector due to skill mismatch. Thus, all efforts to increase gainful employment will fail if skills are not upgraded.
  • Demographic necessity: With 65% of population under 35 years, India’s demographic dividend will turn into demographic disaster if their productive energies are not channelized in desirable direction. The demographic advantage is predicted to last only till 2040, thus there is a very narrow window to harness demographic dividend. Need to capitalize the youth bulge through skill, education, health, employment etc.
  • Industry-skill mismatch need to be plugged which is leading to lower industrial output on one hand and high rate of unemployment on another. Only 46 % of youth coming out of higher educational institutes are employable (India Skills Report 2018).
  • Big ticket reforms: The Make in India vision can only succeed if our skilled local labour force join hands with foreign and domestic manufacturers to provide low cost, high quality products.
  • High productivity: Skilled labour help in transforming the economy from low technology based manual/ mechanical technique to more skill oriented, high end technology and knowledge based economy.
  • Harsh reality: Only 2.3% of India’s workforce has undergone formal skill training as compared to UK 68%, Germany 75%, USA 52%, Japan 80%, S Korea 96%.


Structural Deficiencies
  • Insufficient training capacity: The training was insufficient to ensure a job for those who got the skill training- and this is why the employability rate remains very low.
  • Lack of entrepreneurship skills: While the government expected that some of the PMKVY-trainees would create their own enterprise, only 24% of the trainees started their business.
Operational Difficulties
  • Low industry interface: Most of the training institutes have low industry interface as a result of which the performance of the skill development sector is poor in terms of placement records and salaries offered.
  • Low student mobilization: The enrolment in skill institutes like ITIs, and polytechnics, remains low as compared to their enrolment capacity. This is due to low awareness level among youths about the skill development programmes.
  • Employers’ unwillingness: India’s joblessness issue is not only a skills problem, it is representative of the lack of appetite of industrialists and SMEs for recruiting.
  • Lack of credible Data: There is outdated and restricted official data with respect to employment opportunities, type of skills needed and also there is unreliable and conflicting private estimates.

Recent Initiatives

  • In 2014, Ministry of Skill Development and Entrepreneurship was created to harmonise training processes, assessments, certification and outcomes, and crucially to develop Industrial Training Institutions (ITIs) — the building blocks of this endeavour.
  • Skill India: Launched in 2015 with an aim to train over 40 crore people in India in different skills by 2022. The initiatives include National Skill Development Mission, National Policy for Skill Development and Entrepreneurship 2015, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme and the Skill Loan scheme.
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY) , a dimension of skill Indiamission, under which the training fees were paid by the government. Its main tool was the “short-term training”, which could last between 150 and 300 hours, and which included some placement assistance by Training Partners upon successful completion of their assessment by the candidates.
  • National Skill Development Mission: A three-tiered, high powered decision making structure:
    • At its apex, the Mission’s Governing Council, chaired by the Prime Minister, provide overall guidance and policy direction.
    • The Steering Committee, chaired by Minister in Charge of Skill Development, review the Mission’s activities in line with the direction set by the Governing Council.
    • The Mission Directorate, with Secretary, Skill Development as Mission Director, ensures implementation, coordination and convergence of skilling activities across Central Ministries/ Departments and State Governments.
  • Skill Loan Scheme: To disburse loans from Rs 5,000-1.5 lakhs to whom who seek to attend skill development programmes, over the next five years. The idea is to remove financial constraints as a hindrance to accessing skill training programmes.
  • Skills Build platform:
    • A two-year advanced diploma in IT, networking and cloud computing, co-created and designed by IBM will be offered at the ITIs & National Skill Training Institutes (NSTIs).
    • The platform will be extended to train ITI & NSTI faculty on building skills in Artificial Intelligence (Al).
  • National Apprenticeship Promotion Scheme to promote apprenticeship training and to increase the engagement of apprentices from present 2.3 lakh to 50 lakh cumulatively by 2020. The focus is upon creation of industry-ready workforce.
  • Deen Dayal Upadhyaya Grameen Kaushalya Yojana – (By Ministry of Rural Development):
    • Empowering Poor and Marginalized: Demand-led skill training at no cost to the rural poor.
    • Mandatory coverage of socially disadvantaged groups (SC/ST 50%; Minority 15%; Women 33%).
    • Shifting Emphasis from Training to Career Progression: Providing incentives for job retention, career progression and placements.
    • Recognition of Prior learning of existing workers.
  • USTTAD (Upgrading Skills and Training in Traditional Arts/Crafts for Development) to conserve traditional arts/crafts and build capacity of traditional artisans and craftsmen belonging to minority communities.
  • Nai Roshni: A leadership training programme for minority women; and MANAS (Maulana Azad National Academy for Skills) for upgrading entrepreneurial skills of minority youth.


  • The present annual skilling capacity is not more than 7 million. This is much less than 12 million workforce entering labour market annually.
  • Multiple schemes, run by multiple ministries – no coordination, duplicity and wastage of resources.
  • No independent regulator to oversee various skill initiatives. Ministry of Skill Development & Entrepreneurship act as both policy making and regulating body.
  • Dismal quality of training: Proliferation in number of training institutes without any mechanism to check quality of training/trainer/trainee. Trainees with substandard skill are unable to find employment.
  • No practical training as ITIs, higher education lack practical training internships, apprenticeship facilities.
  • Poor industry participation – only 16% firms carry inhouse training as majority are MSME (China 80% firms carry out in-house training), no collaboration in course development, laggard apprenticeship program.
  • Placement rate below 50% – those who graduate are unable to find jobs.
  • Social stigma: Vocational education still seen as secondary to conventional education – hence less admissions (only 3% students at senior secondary level opted for vocational courses).

State of ITIs in India

  • Industrial Training Institutes are post-secondary schools in India constituted under Directorate General of Employment & Training (DGET), Ministry of Skill Development and Entrepreneurship, Union Government to provide training in various trades.
  • The ITIs were initiated in the 1950s.
  • In a span of 60 years, until 2007, around 1,896 public and 2,000 private ITIs were set up.
  • However, in a 10-year period from 2007, more than 9,000 additional private ITIs were accredited. Risks are:
    • Kirit Somaiya committee says that it is not efficient and disregard for norms and standards.
    • Future of 13.8 lakh students (on an average, 206 students per ITI) studying in these substandard ITIs is at risk, as these institutes can be closed any time.
Sharda Prasad Committee
  • There is need for better oversight, with a national board for all skill development programmes.
  • There should be mandatory rating systems for the ITIs that are published periodically.
  • Like every other education board (such as the CBSE), a board is required in vocational training that is accountable.
  • The core work (accreditation, assessment, certification and course standards) should not be outsourced.
  • There should be one system, with one law and one national vocational education and training system. The silos approach in which present vocational training happening in India should be curbed.
  • A ranking of the ITIs on several parameters such as the one done by the National Assessment and Accreditation Council (NAAC) in tertiary education can be replicated.
  • A unified legal framework can facilitate unification of various regulatory institutions. The absence of a law has only weakened regulation and monitoring.
  • There is need for national vocational act that replaces all scattered regulations — recommended in the 12th Five Year Plan.

Reforms Required

Government Commitment
  • Educational reforms (Structure and processes):
    • Education Policy and laws, real universalisation of primary education, vocational training both within (beginning class 9) and outside the formal education system. Important to leverage secondary school platform to overcome capacity deficit of it is (e.g., China, Germany).
    • National Skill Qualification Framework horizontal and vertical mobility between courses and between vocational and general education.
    • Infrastructure – establishing world class schools/ universities.
    • Improving learning outcomes – quality/updated course material, training the vocational teachers, course end evaluation, industry/government recognized certification, vocational education research institutions, combine classroom training with workplace training.
    • Linking trained persons to industry through placements in gainful employment.
  • Inter ministerial coordination – vocational training provided by multiple ministries which have their specific targets under National Skill development policy 2009 (20 ministries handling 73 different skill programs).
  • Coordination with states – education is in concurrent list, so coordination with states is needed.
  • Committed finances, effective monitoring, outcome orientation to primary, secondary, higher and vocational training each.
  • Expansion of outreach – 90% of work age population have no vocational training, only 2% have received formal training, emerging fields need to be introduced.
  • Quality of trainers – proliferation in number of trainers without any mechanism to check quality of training/ trainer.
  • Incentive to industry, students, States, Local Self government, civil society to develop strong partnership.

Industry involvement to overcome industry-skill mismatch through PPP, industry – institution interface, quality course formulation, industry specific training, assured placement, effective apprenticeship courses, in house training, laws mandating industry participation like China.

Role of Local Self Government (LSG)

  • Currently vocational education comes within domain of state government:
    • Need for greater functional, financial decentralization.
    • Must be involved in planning, implementation, monitoring and evaluation process.
    • Course curriculum must be aligned to needs of local industries in the area which can be ascertained by LSGs though consultative process.
  • Setting up of Skill Assessment Board as an independent regulator.
  • Target placement rate of 80% or more till 2020 (NITI Action Agenda).

Setting performance based indicators for NSDC (based on S Ramadorai Committee):

  • Percent of Certified Candidates employed.
  • Longevity of certified candidates in their chosen field job.
  • Wage differential between certified and unskilled candidates.

International Collaborations

  • Need to setup National level Overseas Employment Promotion Agency, under Ministry of External Affairs, as nodal agency for international collaboration through various global agreements and partnership for skill training, skill certification and labour mobility.
  • Agency to help streamline the efforts of various India

International Skill Centres (IISCs).

  • Separate focus on skills offered by foreign immigrants in India to harness their global experience and perspective.
  • Identification of transferable skills – and making technological and vocational skills, that are transferable across occupations, an integral part of basic skill development curricula across sectors.

Promoting Skills in Traditional & Cultural Sectors

  • Need for dedicated Sector Skill Council for Skill Development in cultural sector.
  • Select appropriate experts in these sub sectors, eg. Archeology, Archival Studies, Conservation, handicrafts, gems & jewellery.
  • USTTAD scheme is a step in right direction.

S Ramadorai Panel Recommendations:

  • Define ‘skill development’: Freshers training, Reskilling/ upskilling, formal college based training etc.
  • Outcome based funding to improve efficiency, cost savings, reduced deficit.
  • Motivate both trainer and trainee: Trainer to get bonus on achievement of certain predetermined targets. Trainee should give Rs 1000 as security deposit, which should be refunded after successful completion of training program.

Focus on Creating Rural Employment Opportunities

Rural employment opportunities can be created by improving the skills of rural population and creating manufacturing bases in the villages. For Example, low skilled food processing, manufacturing and hand loom weaving are some labour intensive sectors in rural areas.

Wage employment programs

Wage employment programs are primarily aimed at alleviation of poverty by providing a job for a fixed minimum wage. The wage earners in turn work on building community assets or other works that arise as per needs. For Example: relief works during and after calamities.

Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) 

MGNREGS serves the following twin purposes

  1. creating employment
  2. building community assets

The works generally taken up under MGNREGS are constructing rural roads, toilets in schools, providing water for agriculture through digging of open wells, renovating traditional water bodies


  • It provided a wage for the employees to meet their basic necessities and thus improving their nutritional standards
  • It resulted in better bargaining power for individuals to demand more salaries from other employers
  • It reduced rural-urban migration in search of jobs


  • It was not a fixed income as the employment is seasonal in nature
  • It resulted in the casualisation of labour, i.e., the nature of work is inferior to a skill based or a self employment
  • It did not impart skills and thus the experience of workers in these programs did not count when they seek new jobs
  • It has not encourage the poor, weaker sections to take up entrepreneurship

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