India, with a population of more than one billion and a workforce of 500 million, has maintained a remarkable gross domestic product (GDP) growth rate of around 9% during the last four years. The unprecedented economic growth accompanied by widespread urbanization along with foreign direct investment has fueled a demand for skilled workers in India. A severe shortage of skills is apparent in the organized and unorganized sectors of the country’s economy.

The task of workforce development in India faces the changing realities of globalization and competitiveness, on one hand, and the need for inclusive growth on the other. The low literacy rate and lack of skill training of the vast majority of the Indian populace poses a major hurdle for its journey towards a knowledge economy.

Therefore, policies to ensure higher quality education and the expansion of vocational education and skill training for the poor and underprivileged are needed in order to produce a new generation of educated and skilled employees who are flexible, analytical, and can serve as driving forces for innovation and growth.

India does, however, enjoy the demographic advantage of an increasing young population, in comparison to the aging societies in most advanced countries. Nearly 12 million youth join the workforce every year. In order for India to exploit this demographic advantage in the future, there is a need to create a model to impart vocational education and training that is flexible, sustainable, inclusive, and creative. The challenge therefore facing the country is how to train and equip this young population with ways and means of gaining productive and meaningful employment.

The report begins with an overview of the current labor market conditions in India—acute skill shortages, skill mismatches between demand and supply, low productivity of workers in the informal sector, unemployment and under-employment and a growing demand for knowledge workers in the emerging fields of the economy.

The following sections discuss the education system in India in general and the issues and challenges facing vocational, polytechnic, and engineering and professional education and training systems, in particular. The final section identifies the current priority issues for workforce development that need to be addressed and recommends subsequent policy interventions as cornerstones for action.

The major data sources of the report are government reports and statistics including the Report of the Task Force on Skill Development by the Planning Commission of the Government of India and reports of the Ministry of Labor, development partners’ reports, institutional annual reports, and best practices of other countries.

Data on the Education System of India and its components were gathered from both internal and external records. Some texts were also adapted from a number of data from previous studies and publications. Though the report covers mainly general recommendations and policy directions for workforce development, the author hopes that this will contribute to the literature by providing background on the TVET system in India as a whole and its role in developing a skilled workforce for gainful employment.

I would like to convey my sincere appreciation to Dr. Rakha Majumdar for helping me to compile the report and to Ms. Kenneth Barrientos for helping me in editing. My thanks also to Ms. Patricia Decker for editorial and production assistance.

Shyamal Majumdar
Director General
Colombo Plan Staff College for Technician Education

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Shyamal Majumdar
Asian Development Bank Institute

CONCLUSION
The rapid development of India’s economy has brought forth new challenges for workforce development. Workforce development in India confronts the changing realities of globalization and competitiveness, on the one hand and the need for inclusive growth on the other. Despite its booming economic growth and huge population, India is suffering from a big shortage of skills.

India’s transition to a knowledge-based economy will require a new generation of educated and skilled people. Its competitive edge will be determined by its people’s ability to create, share and use knowledge effectively. In order to transform itself into a knowledge economy, India needs to develop knowledge workers with flexibility and analytical powers; these workers can be the driving force for innovation and growth.

The low literacy rate and lack of skill training of the vast majority of the Indian populace poses a major hurdle in its journey towards a knowledge economy. Policies to ensure high-quality education and the expansion of vocational education and skill training for the poor and underprivileged will mark the beginning of this journey. This will enable them to become active contributors in the process of India’s economic growth.

Attuning the education system as a whole and TVET in particular to the new global environment by promoting flexibility, creativity and lifelong learning opportunities and attaining excellence in all levels of institutions are therefore the basic requirements for maintaining high levels of productivity of the workforce, which is itself a prerequisite for competitiveness in a highly competitive global market.

Repositioning TVET to achieve the simultaneous tasks of building Centers of Excellence for developing high-quality skilled workers and knowledge workers and at the same time facilitating the process of encompassing the unorganized and informal sector within its folds therefore have assumed great importance in the process of India’s workforce development.

India’s future lies in a knowledge economy, which may be brought about by harnessing the youth of the country with proper skills, competencies, and knowledge.

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