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With a headcount of around 1.4 billion in 2015, India is expected to become one of the most populous nations by 2025. The country’s population pyramid is expected to “bulge” across the 15–64 age bracket over the next decade, increasing the working age population from approximately 761 million to 869 million during 2011–2023. Consequently, until 2020, India will experience a period of “demographic bonus”. India needs to poise itself to take advantage of this “demographic bonus”. Today, India has to focus on increasing the skilled workforce in the country, which is a dismal 2 per cent compared to 96 per cent in South Korea, 80 per cent in Japan and 75 per cent in Germany. Given the thrust on landmark reforms like “Make in India”, both Government and industry have endorsed that the focus on Skill Development has to take priority. Given the structural changes and the industry friendly policy changes, the January issue of the Policy Watch is a sincere endeavor to get sectoral industry views on skill development through the voices of the Chairmen of National Committees and Regional Chairmen of the various skill Sub-Committees.
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  • 1. 1policy watch this IssueInside Message From the Director General............ 1 Chandrajit Banerjee, Director General, CII Perspective��������������������������������������������������������������������������������������������12 Policy Barometer�����������������������������������������������������������������������������������15 Fact File..................... 22 Special Report........... 19 Industry Voices........... 20 CEO Speak����������������������������������������������������������������������������������������������2 December 2014, Volume 3, Issue 6 Policy T oday, India is poised at a stage where its status as a break-through economy depends on its focus and attention on building its human capital. For our economy to grow at 8-9 per cent, secondary/tertiary sectors will need to grow at 10-11 per cent with agriculture sector at 4 per cent. Large migration from agriculture (primary) to secondary/tertiary is imminent. Hence a large skill gap will exist requiring skilling development. The projected incremental demand is 240 million by 2022 in 20 high growth sectors, with 150 million required in the manufacturing and services sector alone. If this issue is not addressed effectively, the economic and social implications will be drastic.  The role of the Government, private sector, skill training providers and society cannot be overemphasised as it is mandated to imparting the necessary skills to the workforce. It is equally important for the business sector to engage in the dialogue on skill enhancement to make the ‘Make in India’ mission a reality. The last six months has seen a positive move from the Government with the creation of a dedicated Ministry of Skill Development Entrepreneurship. In support, we, at CII, have been working towards a demand-responsive eco-system for skill development with a multi-pronged approach. First, we have recognised the need to create awareness on vocational training through policy advocacy and competitions such as WorkSkills and WorldSkills International. CII believes that there is a need for a framework to ensure career progression. The National Skill Qualification Framework (NSQF) has been meticulously planned to ensure seamless mobility between the education and technical training system. Second, we believe it is necessary to utilise the existing training institutions and ensure that they can scale themselves to match demand. CII has made a conscious effort towards creation of PPPs to rejuvenate institutions such as the Industrial Training Institutes (ITIs) with CII members adopting and upgrading 390 of them. A blue book to guide the members of the Institute Management Committee (IMCs) has been brought out.An impact study of 100 ITIs has been conducted to assess their performance with suggestions for improvements.We have initiated pilot projects to create appropriate standards for these Institutes. Industry has embarked on flexi MoUs with the Ministry of Labour Employment giving companies the flexibility to design training programmes at ITIs, tailored to industry needs. Third, quality assurance has to be emphasised when delivering and assessing trainees. CII is a National Assessing Body for the Modular Employable Skills Scheme (MES) and the Sector Skill Councils. Fourth, creation of additional Sector Skill Councils (SSC): providing industry participation in setting standards and certification approach, CII has promoted SSCs in Healthcare; Tourism Hospitality; Logistics; Life Sciences; Beauty Wellness; Infrastructure Equipment and Banking Finance Services and Insurance (BFSI). Sector Skill Councils on Coating, Furniture Fittings and Strategic Manufacturing are in progress. Fifth, the policy level recommendations submitted by CII have been instrumental in the creation ofAmendedApprenticeshipAct 2014. The industry needs to realize the benefits of bringing in a robust apprenticeship regime as this will enable lifelong learning and ensure generations of trained and skilled labour. Sixth, we need to promote more skill development Institutions. CII is one of the founding members of the National Skill Development Corporation, which finances promising skill development institutions. In addition, CII has created Skill Gurukuls in remote districts of India. Lastly, there is a need to create employment exchanges to link training to employment and to create a skill repository to link trainees to jobs. CII is working closely with the Ministry of Labour Employment to convert the existing employment exchanges to modern Career Centres. CII strongly believes that Recognition of Prior Learning (RPL) is imperative to engage the large skilled uncertified labour force. CII supports the RPL initiative by the Government which will train workers in the construction sector and utilise construction sites as training centres. To ensure that the economy grows at a sustainable rate with rise in industrial growth, industry has to create an enormous pool of skilled workforce.CII,which has witnessed the power of training to create an industry,believes that this timely focus on skill development is critical and highly welcome.  n Chandrajit Banerjee Director General Confederation of Indian Industry Focus: Skill Development
  • 2. 2 policy watch CEOSpeak We are running into an increasingly complex paradox related to skilling our work force across the country. As a million people join the workforce each month, their aspirations for a better life should get reflected in a desire for further training and building skills that gets them better careers. And as industry strives to become more competitive, they should be willing to make the necessary investment in terms of training people to increase their productivity and paying for trained staff. Our normal expectations are that wherever there is a great demand (for jobs) there will be a major demand for the means to get there. And wherever there is a great demand for skilled people, there will be a willingness to pay differentials for the right capabilities. But neither of these are happening today at the scale required to make an impact on our demographic dividend. The other major outlier in all these plans is the fact that organized labour represents such a small percentage of our total workforce. Most current efforts are focused on placing people into the organized sector which, therefore, ignores the unorganized sector, which by some estimates accounts for 90 percent of the labour force. If that is the case, how do we impart skills to them, how do they get counted, and what industries will they eventually join? Many of these do in fact serve the organized industry as contract labour, in construction, or agriculture, or factories, and of course the Government is a large employer of such contract labour. Apart from that there are self-employed entrepreneurs – what skills should we, and can we, teach them? The Government has made some strong moves towards fulfilling this mission. Awareness of the need for skilling has increased dramatically and is being discussed in every Board room and every conference. Setting up a Skills Ministry, the earlier setting up of NSDC and Sector Skill Council as well as national frameworks for qualifications and vocational skills are critical building blocks. Recent changes to the Apprenticeship Act have been very good and industry must leverage these to their advantage. But beyond that, as we all know, there is so much left to do.Today 22 different Ministries are running their own skill development programmes – and many States have also embarked on such programmes. What we still lack, therefore, is an overall strategic framework for effectively skilling millions of people, in skills that can help them get better careers and job prospects, and that make our industries more competitive and give real teeth to the ambitions of Make in India, the Digital Literacy Mission and the dreams of a 100 Smart Cities. CII and all its members will play a critical role working in partnership with the Government to build this strategic framework and to implement it.We have to address the critical questions around who will pay for this skilling, how do we reach the unorganized sector, how do we set standards and ensure that the quality of training is excellent, how do we convince industry that skilled people need to be paid a differential, failing which the demand for skills training will never rise in any noticeable manner. The Paradox of Skilling in India Pramod Bhasin Chairman, CII National Committee on Skill Development and Non-Executive VC Former President, Genpact
  • 3. 3policy watch CEOSpeak We believe a lot could be done by leveraging existing infrastructure, creating substantial awareness and respect for skills training to create a ‘pull’ factor from potential students, working closely with industry to ensure relevant curriculums are taught, as well as encourage differentiated pay for trained employees, improve the overall quality of the training being delivered, and most importantly, achieve scale through allowing sustainable business models to evolve, and through innovative techniques to leverage technology and master trainers. Let me touch on some of these points briefly. We have an enormous under-utilized infrastructure of schools, colleges, ITIs, CSCs, Government offices, district administration buildings, all across the country. Is there a way, State by State, we can leverage this infrastructure to allow training and education, through a PPP model? It would save resources in terms of money; it might even, perhaps, improve the quality of the training and the experience of the students. Every State has capacity and if we can use flexible models for training (2 or 3 or 5 hours a day) we can spend the money for infrastructure, elsewhere – on better teachers, content and technology. But the most critical issue we face is how to achieve scalability. How do you train millions of people each year, not just hundreds of thousands? That's what our population demands and what we need to make ourselves truly competitive. We have to be able to experiment with technology, distance learning, hybrid models for imparting training ( vs one trainer for each classroom) , self-learning modules, and of course using bandwidth and every and all other mediums to reach the population where they live. Doing it in a binary manner - one center, one teacher, and one group of students at a time - will take far too long. We have to find new ways to reach people – and this will only happen when we encourage viable business models which can invest in such experimentation. This is a huge challenge and a huge opportunity. The Government's and CII's focus on this area will yield dividends – we just need to ensure that all the participants – Government, industry, students, potential employees and training organizations  – are well coordinated to deliver efficiently, effectively and with speed. n We also know that there is an enormous amount of mis-information regarding jobs (which one is good or bad, which one provides better careers?) and what it takes to get a job that is aspirational. We are often told when we do our surveys that people want an ‘office’ job, without much explanation of what kind of job this might represent. The reason is very rational and reasonable – working conditions in many other jobs can be brutal and unforgiving – and even if they pay more, they are not worth it. If we can help clear the confusion, and show examples of great successes through TV and media and newspapers, we may inspire many others to get trained to build careers. In many cases their parents don't understand these issues and cannot provide the guidance to a young person out of college and so we have to find alternatives. The Sector Skills Councils provide standards for training and a curriculum designed by industry. CII has many of these Councils and if we ensure these remain relevant we can make sure we train people in ways that get them real skills and jobs, not just theoretical training – and that the quality of this training is good.
  • 4. 4 policy watch CEOSpeak As advanced economies look to compete in a globalized world, there is an increasing movement towards a sectoral approach - to engage both industry and education more effectively in upgrading skills and preparing the new generation workforce. India is faced with a unique situation where a large part of the labour force is engaged in the unorganized sector. For India to bring in internationally benchmarked Indian standards, it is most important to engage the unorganized sector. So, in India, it goes beyond the demand supply mismatch. It is about creating an ecosystem wherein the sectors are brought in on a common platform. The common platform that has been created is the Sector Skill Councils (SSCs), which will ensure homogeneous growth of the economy through stakeholder participation and standardized training in each sector. The National Skill Development Corporation (NSDC) has been mandated by the National Policy on Skill Development 2009 to spearhead the SSCs. As we envisage it, the SSCs will be the evangelists who will take the economy forward by ensuring productivity and competitiveness through its various roles of uniform standard setting, robust assessment systems and certification. SSCs are for the industry, by the industry and with the industry. SSCs are employer-driven national partnership organizations that would bring together all stakeholders – industry, labour, and academia included – to achieve the common goal of creating a skilled workforce for the segments they represent. SSCs are inclusive and attempt to bring in large and small players in the industry. These industry-led autonomous organizations will, therefore, develop labour market information to allow businesses to plan human resources and project investments, develop national occupational standards to facilitate labour mobility (including apprenticeship), influence college curricula and promote health and safety in the workplace. Through the policy directive India has started progress on SSCs and most surprisingly in a record span of 4 years. To spell facts, 40 SSCs are in the NSDC mandate, of which 31 have been approved. 18 SSCs have received grants. Sector Skill Councils have led by example and tapped the informal sector which comprises 90 per cent of the economy.The progress has been remarkable and industry standards developed for about 750 job roles have already been developed by SSCs. These standards, along with the direction provided by the National Skill Qualification Framework (NSQF), are envisaged to provide standardization, mobility, lifelong learning and outcome- based skill assessments. This, to my mind, is an extremely positive trend. CII supports the NSDC in the philosophy of Sector Skill Councils and CII has promoted 7 SSCs namely on Healthcare, BFSI, Logistics, LifeSciences, Beauty Wellness, Tourism Hospitality and Infrastructure Equipment. Manufacturing, Furniture Fittings and Coating are on the anvil. Benchmarked Indian Standards Through SSCs The need for industry-led SSCs has arisen due to the persistent challenges of education to employment. Based on our experience, if we prioritize the root causes for the skill development landscape not attracting the Quality Imperative: Sector Skill Councils S Mahalingam Chairman, CII National Committee on Sector Skill Councils and Former CFO ED, Tata Consultancy Services Limited
  • 5. 5policy watch CEOSpeak right talent, they would probably be the following: One, employers are unable to bank on a reliable employability standard which is the result of the absence of pan Indian training standards. Defining vocational and educational qualifications and quality frameworks like the NSQF and corresponding National Occupation Standards (NOS) so that there is a single set of standards that define quality and occupation standards, from the basic to the advanced levels, will strengthen the confidence levels for both - the employer and employee. Second, the lack of an affiliation and accreditation process does not give employers the freedom of choice in terms of hiring. This creates a deficit of trust as every training institute delivers a different standard and there is no quality check. However, with the advent of the SSCs, only accredited centers will be recognized to points are well managed. The Apprenticeship Act 2014 has given industry a high degree of freedom to develop standards to best meet the needs of their occupations. SSCs will play a pivotal role in setting industry standards and bringing in new job roles in the Apprenticeship scheme. CII Sector Skill Councils The Sector Skill Councils are well funded entities which have the sound backing of the industry. Funding for the establishment of SSCs in India is initially done by the National Skill Development Corporation (NSDC). As it grows, each SSC can become a self-funded, for-profit organization. The NSDC Board has approved funding of 31 SSC proposals till the end of November 2014, which range from Agriculture to Beauty Wellness. Through the mandate from the National Policy on Skill Development, CII has taken deliver SSC certified training, hence assuring quality delivery. Third is the absence of a uniform testing and certification system. Employers are willing to pay more for skills when they are assured of a quality resource and this can happen only when there is a way to test for and recognize relevant skills. The SSCs have understood this pressing concern and is building well-structured collaborations among industry players within their sectors in developing standards and certification processes, as well as in generating sufficient number of assessors. SSCs being the certifying agency for skills through a network of partners, both vocational and academic, ensure that the industry hires only certified professionals, again at the vocational and academic levels. The SSCs will measure and monitor demand and supply in various categories of skills and proficiency, thus ensuring the balanced growth of this industry so that the price Functional Flow Chart Stakeholders
  • 6. 6 policy watch CEOSpeak up the responsibility of setting up SSCs with the understanding that it is a crucial need for the economy, to give an example of the healthcare sector which has the mandate to facilitate skilling of 4.8 million workforce in the Allied Healthcare and Paramedics over the next 10 years. Logic tells us that this will be achieved only through training and industry related standards. CII aims to have every segment of the sector represented in the SSCs. Initial skill requirement and preparation of the proposal with industry inputs and vetting is submitted to the National Skill Development Corporation / National Skill Development Authority by CII. Having taken up the responsibility, CII ensures the appropriate industry representative for chairing the governing council and its members and getting the secretariat in place. The work does not stop here - there is continuous hand holding of the secretariat as well as building awareness with the aim of garnering maximum support from industry. CII ensures the formation of robust Governing Boards, led by stalwarts. Dr Naresh Trehan has been appointed Chairman for the Healthcare SSC; Mr. Vikram Oberoi leads the Tourism Hospitality SSC; Ms. Vandana Luthra is the Chairperson for the Beauty Wellness SSC.; Mr. M B N Rao leads the Banking Financial Services and Insurance SSC; Mr. R Dinesh heads the Logistics SSC; Mr. Satish Reddy takes charge of the Lifesciences SSC and Mr. Glenville D’Silva heads the Infrastructure Equipment Skill Council. CII has constituted the National Committee on SSCs which will be a forum where we all work as a community to improve the status of SSCs in India and overseas. Under the aegis of the National Committee on Skill Development, CII
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