India’s demographic advantage illusion
March.22 : The observation of a National HRD Network board member that due to the acute shortage of skilled manpower in the infrastructure sector infrastructure companies are unable to take advantage of the immense opportunities thrown up by the government impetus to this sector is alarming. Further, a report by a consultancy firm and the Project Management Institute says that around 53 per cent of the companies they surveyed agreed that non-availability of experienced labour was the root cause of delays in projects.
It is estimated that the total loss due to project delays is around Rs 54,000 crores and, between April 1999 and March 2009, a massive 82 per cent of projects failed to meet their deadlines while 41 per cent faced cost overruns. The shortage is more alarming when it comes to project managers, quality supervisors and planning engineers. This should ring alarm bells throughout the country as it could derail the economy in a way that could threaten India’s development and progress on the road to becoming a superpower. It is an irony that whilst India is one of the few countries on a growth trajectory of nine per cent, it has a shortage of skilled personnel. There are various estimates of the shortage of skilled manpower. A leading businessman has said that half-a-billion Indians are without any skills. This punches a major hole in the much touted demographic advantage that India has. A recent study has said that 75 per cent of engineers and 85 per cent of students graduating in the arts, science and commerce streams are unemployable.
The silver lining is that Prime Minister Manmohan Singh is aware of this gaping, dangerous shortfall in the supply-demand equation in the employment sector. India has seen an explosion in economic growth, particularly in the services and infrastructure sectors, since economic liberalisation, but training in the requisite skills has not kept pace to meet the requirements of growth. The Indian Technical Institutes (ITIs) had been badly mismanaged all these years and now a business chamber has adopted some 240 of them under the private-public participation initiative. This shortage of skilled labour is also a cultural problem. Most parents want their children to get a college education and go for degrees rather than diplomas. The mindset of this generation, and even earlier generations, was to go for comfortable government and office jobs, particularly in the IT sector where you sit and work in air-conditioned comfort. Here is where the Malaysians, Chinese and Vietnamese score over us. In Communist regimes education and health were two programmes that were universal. They believe in the dignity of labour whereas in India working with your hands is considered infra-dig. The Southeast Asians are more Westernised in their thought processes and are now starting to flood the Indian infrastructure sector, be it steel, refineries or roads. The government will require a nationwide programme to attract youth to vocational training. India is lucky to have an HRD minister like Kapil Sibal pushing this idea and introducing vocational courses in the last two years of schooling so that students can get a job as soon as they finish Class 10. The shortage of labour has also been attributed to the National Rural Employment Guarantee Scheme which gives workers Rs 100-Rs 120 per day for 90 days a year. So a family of five earning Rs 45,000 a year might feel it is good enough for survival. It has also made labour more expensive as companies are forced to increase payments to Rs 200 and more per day. The boom in the building construction industry has also taken a large chunk of labour and supervisors out of the system. Keeping all this in mind, the urgency of training the youth of India in skills required for infrastructure cannot be understated.
It is estimated that the total loss due to project delays is around Rs 54,000 crores and, between April 1999 and March 2009, a massive 82 per cent of projects failed to meet their deadlines while 41 per cent faced cost overruns. The shortage is more alarming when it comes to project managers, quality supervisors and planning engineers. This should ring alarm bells throughout the country as it could derail the economy in a way that could threaten India’s development and progress on the road to becoming a superpower. It is an irony that whilst India is one of the few countries on a growth trajectory of nine per cent, it has a shortage of skilled personnel. There are various estimates of the shortage of skilled manpower. A leading businessman has said that half-a-billion Indians are without any skills. This punches a major hole in the much touted demographic advantage that India has. A recent study has said that 75 per cent of engineers and 85 per cent of students graduating in the arts, science and commerce streams are unemployable.
The silver lining is that Prime Minister Manmohan Singh is aware of this gaping, dangerous shortfall in the supply-demand equation in the employment sector. India has seen an explosion in economic growth, particularly in the services and infrastructure sectors, since economic liberalisation, but training in the requisite skills has not kept pace to meet the requirements of growth. The Indian Technical Institutes (ITIs) had been badly mismanaged all these years and now a business chamber has adopted some 240 of them under the private-public participation initiative. This shortage of skilled labour is also a cultural problem. Most parents want their children to get a college education and go for degrees rather than diplomas. The mindset of this generation, and even earlier generations, was to go for comfortable government and office jobs, particularly in the IT sector where you sit and work in air-conditioned comfort. Here is where the Malaysians, Chinese and Vietnamese score over us. In Communist regimes education and health were two programmes that were universal. They believe in the dignity of labour whereas in India working with your hands is considered infra-dig. The Southeast Asians are more Westernised in their thought processes and are now starting to flood the Indian infrastructure sector, be it steel, refineries or roads. The government will require a nationwide programme to attract youth to vocational training. India is lucky to have an HRD minister like Kapil Sibal pushing this idea and introducing vocational courses in the last two years of schooling so that students can get a job as soon as they finish Class 10. The shortage of labour has also been attributed to the National Rural Employment Guarantee Scheme which gives workers Rs 100-Rs 120 per day for 90 days a year. So a family of five earning Rs 45,000 a year might feel it is good enough for survival. It has also made labour more expensive as companies are forced to increase payments to Rs 200 and more per day. The boom in the building construction industry has also taken a large chunk of labour and supervisors out of the system. Keeping all this in mind, the urgency of training the youth of India in skills required for infrastructure cannot be understated.
