Employment and Skills:The Indian Case

Devesh KapurSeptember 27, 2011

Anti Power Point Party

OVERVIEW

• Demographic Reality: 550 million under 25

• Structure and Weaknesses of Indian Higher Education

– College education (“white collar”)

– Mid-level skill Training (“blue collar”)

• Current Reforms and the Road Ahead

India Age Demographics - 1991

Source: US Census Bureau

509 million 15-64 age group

India Age Demographics - 2020

Source: US Census Bureau

888 million 15-64 age group

Population Increases in 15-64 Age Group

1991-2010 249 million

2010-2030 230 million

Public and Private Sector Formal Employment

Casualization of Labour

YearRural Male

Rural Female

Urban Male

Urban Female

Self-Employed

1987-88 58.6 60.8 41.7 47.1

2009-10 53.5 55.7 41.1 41.1Regular

employees

1987-88 10 3.7 43.7 27.5

2009-10 8.5 4.4 41.9 39.3

Casual labour

1987-88 31.4 35.5 14.6 25.4

2009-10 38 39.9 17 19.6Source: NSS Employment Surveys; Subhanil Chowdhury, “Employment in India…”, EPW, Aug. 6, 2011

Labour Force Participation (%)Principal Status

NSS Round Date Range

Rural Male

Rural Female

Urban Male

Urban Female

43(July’87-June’88) 53.2 25.4 52.8 12.9

55(July’99-June’00) 53.3 23.5 53.9 12.6

66(July’09-June’10) 54.8 20.8 55.6 12.8

Source: Himanshu, “Employment Trends in India,” EPW, Sep. 10, 2011

Source: Partha Mukhopadhyay

Labour Force Participation1993-1994 2009-2010

Employment by Occupation (2009-2010)

Source: NSS Employment Surveys; Subhanil Chowdhury, “Employment in India…”, EPW, Aug. 6, 2011

Devesh Kapur, CASI

Rapid growth of student enrolment in India

INDIA

1950/51: 27 Universities, 578 Colleges

2009: 504 Universities , 25,951 Colleges, 14 million students enrolled

Weaknesses in Higher Education and Skills Development in India

• Systemic– Dualism reflecting hierarchical status-conscious society

with no ladders for vertical mobility between high status college education and low status “vocational education”

• Regulation

• Internal Governance

• Faculty

MISMATCHES

• Demand-supply mismatch

• Credentials-Skills mismatch

• Aspirations-Occupations Mismatch

Indian Civil Services ExamName of Examination No. of

PostsNo. of

ApplicantsNo. of

Recommended Candidates

Civil Services 457 3,45,106 425

Engineering Services 262 74,363 229

Medical Services 624 28,878 562

Central Police Forces 256 92,568 224

Indian Economic Service/ Indian Statistical Service

30 5,017 23

Source: Union Public Service Commission

Political Economy of Higher Education

• Higher Education is an important arena of distributional conflicts

• Centralized regulation provides fertile ground for rent-seeking and patronage politics

• Supply of quality institutions is severely lagging demand- Poor quality leading to diminished signaling and degree inflation- The few institutions that signal quality enjoy enormous brand-rents

• Quality: high variance and low mean – Entrenched mediocrity in most faculty– Exceeding weak culture of research

• Access and Equity exacerbated by failures at primary and secondary level

Devesh Kapur, CASI

Structure of Higher Education Regulation

FUNCTION INSTITUTIONUniversities University Grants Commission

(UGC)

All aspects of “Technical Education” including engineering/technology, and management

All India Council for Technical Education (AICTE)

Medical Education Medical Council of India (MCI), Pharmacy Council of India (PCI), Indian Nursing Council (INC), Dentist Council of India (DCI)

Legal Education Bar Council of India (BCI)Teaching National Council for Teacher

Education (NCTE) Architecture Council of Architecture

Structure of Higher Education Regulation

FUNCTION INSTITUTION Heads Indicted in Last two yearsUniversities University Grants Commission

(UGC)

Corruption Investigations

All aspects of “Technical Education” including engineering/technology, and management

All India Council for Technical Education (AICTE)

INDICTED

Medical Education Medical Council of India (MCI), Pharmacy Council of India (PCI), Indian Nursing Council (INC), Dentist Council of India (DCI)

Heads of MCI, DCI INDICTED. Investigations in others

Legal Education Bar Council of India (BCI) INDICTEDTeaching National Council for Teacher

Education (NCTE) INDICTED

Architecture Council of Architecture INDICTED

Obstacles to reform PATRONAGE IN PUBLIC INSTITUTIONS

INCUMBENT BENEFICIARIES

POLITICALLY CONNECTED HIGHER EDUCATION ENTREPRENEURS

ELITE FLIGHT TO OVERSEAS INSTITUTIONS

KEY ARENA FOR DISTRIBUTIONAL CONFLICTS

Formal Government Skill Development Programs

Institute Total Capacity Quantity Governing Ministry Schools (Mainstream education System)

1 million 9,619 schools MHRD

Polytechnics providing diplomas

0.4 million 1,659 AICTE approved institutions

MHRD

Training institutions ITIs (Private) & ITCs (Govt)

1.2 million 2,012 ITIs and 6,788 ITCs

Directorate General of Employment and Training (DGET), under MoL

Source: Megha Aggarwal, “Skill Development in India,” 2011.

Limitations in India’s Skill Development Framework

Constraint Implications

Fragmented Industrial Structure(Dominated by small firms)

Reduces Incentives for in-house training

Limited capacity Less productive national workforce

Limited focus on informal economy Missing target audience

Lack of clear framework defining quality VET fails as signalling mechanism

Lack of flexibility and mobility within VET space

• Perception • Limited access

Lack of industry involvement in VET Unresponsive and static system

Fragmented regulatory landscape Impedes coordinated approach

Mismatch between courses offered and those required by industry

Poor labour market outcomes

Lack of quality trainers Affects quality of instruction

INITIATIVE

• Launched in 2010 as PPP to create 150MM skilled workers by 2022

• Indian Industry: 51%; Government: 49%

• Primary mandate - incentivise private sector participation:

• Developing curriculum; Delivery of training; Quality assurance; Placement

• Other responsibilities – monitoring and evaluation, facilitate “train the trainer” institutes

• Current progress:

• 30 training projects approved to train 55MM people

• Mapping skill gaps for 20 high growth sectors and the unorganized sectors

• 28 autonomous sector specific councils (SSCs)

National Skill Development Corporation

Source: Megha Aggarwal, “Skill Development in India,” 2011

Corporate campuses and workforce training

Private providers increasingly dominant

Overseas higher education (elites)

Non traditional higher education developments

Devesh Kapur, CASI

Future of Higher Education?

The Trilemma: Scale, Cost and Quality

• Scale: 12th Plan targets a GER of 20% (from about 14% currently) ~ 2 million additional students. What will be the quality of this labor force?

• The global hunt for talent: Where are the faculty?

• Is Traditional University Education Oversold?– Skilling vs degrees

• Will there be innovation in Higher Education itself?

Devesh Kapur, CASI

Gender Ratio (15-64 age group)

Year Gender Ratio (M/F)

1991 1.068

2010 1.069

2030 1.090

Source: US Census Bureau