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Skill Development Status India, Digital Dividend

India is one of the youngest nations in the world with more than 54% of the total population below 25 years of age. India’s workforce is the second largest in the world after China’s. While China’s demographic dividend is expected to start tapering off, India will continue to enjoy it till 2040. However, India’s formally skilled workforce is approximately 2% – which is dismally low compared to China (47%), Japan (80%) or South Korea (96%).

Why India lacks Skill Development?

  • Education – heavily relied on producing clerical work force rather than skill man power (no thrust on practical)
  • Rapidly changing technology – mismatch between the speed of change in technology and speed of changing skill set accordingly
  • Social acceptance – Our society gives lesser acceptance & recognition to vocational trained people
  • Lack of infrastructure and poor quality of courses: infrastructure in most skill training centres is of poor quality + huge gap between the industrial requirement and practical training in vocational institutions.
  • Inefficient trainers: Trainers in institution are following the conventional method of operating the machine, without updating the training methods.
  • Industries prefer the cost cutting measures, by not hiring the trained and skilled labour but prefer to hire an untrained or semi-trained worker at a cheaper pay-out
  • Complexity of labour laws – employers prefer automation & contract labours instead of permanent one


 Why skill development is needed? 

  • To convert its demographic dividend into demographic assets
  • Lack of skill required for specific job among the young graduates
  • To turn the existing skills into entrepreneurship and innovations
  • Ambitious programme like Make in India, Smart Cities and Digital India, require huge skill workforce
  • Slowdown in China and its ageing population is a major opportunity for India to become the manufacturing house of the world


Due to acute shortage of skilled labour force and difficult business conditions, India stand on 92nd rank on a Global Index of Talent Competitiveness (2017)

Government Initiatives 

  • Skill India Initiative – 40 Crore people with employable skills by 2022
  • National Apprentice Promotion Scheme – target for training 50 Lakh apprentices by 2020
  • Pradhan Mantri Kaushal Vikas Yojana – outcome-based skill training
  • Skill certification scheme with recognition of prior learning
  • Indian Institute of skills to adopt various best practices from the country
  • Indian Skill Development Service for dedicated administrators for Skill Development
  • Skill Banks to Train Workers for Global Markets – to make India “human resource capital” of the world
  • Deen Dayal Upadhyaya – Grameen Kaushal Yojana to make demand-led skill training at no cost to the rural poor with mandatory coverage of socially disadvantaged groups


It is estimated that the demographic dividend is expected to last for 25 years. Thus, to reap the benefits of this one-off opportunity India needs to significantly scale up its skill development initiatives. The recommendation of Sharda Prasad Committee of Scrap all existing overlapping skill councils, introduction of an oversight mechanism on the NSDC through Parliamentary oversight, CAG audit & RBI supervision is need of the hour.

World Development Report 2016- Digital dividends

Digital Technologies Dividend – Inclusion, Innovation, Efficiency, Growth – According to the report the broader development benefits from using digital technologies—have lagged behind.

  • Growth, innovation, jobs and services are the most important returns to digital investments
  • By reducing information costs, digital technologies greatly lower the cost of economic and social transactions for firms, individuals, and the public sector
  • Boost efficiency as existing activities and services become cheaper, quicker, or more convenient
  • Increase inclusion as people get access to services that previously were out of reach
  • Indian perspective of Digital technologies – Good governance, Ease of doing business, Create India as knowledge economy & Empower people


“However, the World Bank in its recent report highlighted that digital dividends are not spreading rapidly”
  • Almost 1.063 billion Indians are offline & cannot participate in the digital economy in meaningful way
  • Digital divides across gender, geography, age, and income dimensions
  • 40% population is living BPL, illiteracy rate is more than 25-30% & digital literacy is almost non-existent among more than 90% of India’s population


Not surprisingly, the better educated, well connected, and more capable have received most of the benefits—circumscribing the gains from the digital revolution.

What can be done reap digital dividends? 
  • Making the internet universally accessible, affordable, open & safe
  • Rapidly expand digital infrastructure and ensure its cyber security
  • Develop better understanding of how technology interacts with other factors of development

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