July 19, 2015
Why Modi’s new Skill India mission
will mean nothing for workers
Unless companies start paying wages
corresponding with workers’ skills, the government’s mission
will not have any far-reaching impact.
Anumeha Yadav
Prime Minister Narendra Modi
recently launched the Skill India mission, aiming to train over 40
crore people in different skills over the next seven years through
the National Skill Development Corporation. The flagship scheme
under the mission, the Rs 1,500-crore Pradhan Mantri Kaushal Vikas
Yojana, alone seeks to train 24 lakh youths and certify them
through a portable “skill card” with a quick response code
which can be scanned by prospective employers. Under another
programme, the Skill Loan scheme, loans ranging from Rs 5,000 to
Rs 1.5 lakh will be offered to 34 lakh youths seeking to attend
skill development programmes over the next five years.
The prime minister’s ambitious
skills programmes are being viewed as complementary to the Make in
India mission, the government’s push to boost manufacturing in
the country. At present, manufacturing accounts for 11% of total
employment, much lower than 30% in China.
There is little evidence, however,
that industry in India views lack of skilled workforce as a major
constraint – or that it is willing to pay a premium for skilled
or certified workers. When it comes down to the shop floor, there
are negligible differences in starting wages of workers based on
their qualifications. Whether they have studied up to high school
or are holding certificates from Industrial Training Institutes,
workers get paid low wages.
On the shop floor
This pattern is on clear display
just 30 kilometres from Delhi, in Haryana’s Manesar industrial
model township which houses more than 1,000 industrial units of
automobiles, electronics and consumer goods. Workers here say that
only very large companies, such as Maruti Suzuki or Honda, pay
higher wages to workers trained in ITIs than to high school
graduates. But then, large factories such as Maruti or Honda,
employing over 500 regular workers, make up just 2% of India’s
factories, as per Labour Bureau data.
Santosh Negi, a slender 28-year-old
woman, is one of the 1.5 lakh workers of Manesar’s industrial
township. A political science graduate from MD University in
Rohtak, she works at a factory that employs 400 workers and
manufactures automobile wire harnesses and printed circuit boards
for automobiles and appliances. When Negi joined the company as a
contract worker in 2012, she earned Rs 5,600 per month. She now
earns Rs 6,900.
Narendra Kumar, a 22-year old worker
who trained at ITI Bhiwani, joined the company’s engineering
department the same year as Negi at a wage of Rs 5,800. He now
earns Rs 6,600, he says. “There is no value of education,”
said Negi. “Students of class X, XII, or graduates – all get
same wages here, everyone is a casual worker on a temporary
contract.” The company’s documents show workers receive wages
in cash through labour contractors. On production sheets,
officials ranked contract workers like Negi and Kumar on skill on
a scale of 1 to 4.
Ram Nivas, a 26-year-old working in
the same industrial area, has a contrasting career graph. He left
his home in Rajasthan’s Churu after dropping out of class X,
worked as a security guard for a few years before joining Nifco, a
plastic injection-moulding workshop, as a casual worker. He is now
in his third job at Hi-Lex, a firm manufacturing transmission
cables, earning Rs 12,000, double of what Negi and Kumar make.
“Our company has no preference for class X or XII or ITI,”
said Nivas. “Even if they take someone from ITI, they tell them,
we will pay the same as we pay others.”
Elsewhere, there’s starker gap to
contend with. In Haryana, the industrial wage for workers has
stagnated and is at present fixed at Rs 193 a day for unskilled
workers and Rs 215 a day for skilled workers. But on many days,
the daily wage workers who gather at Gurgaon’s Sector 5 chowk
get paid much higher, Rs 300-350 for a day’s work as
construction labourers and plumbers – although they have to face
the uncertainty of searching for a job every day.
Low value for certification
Prerit Rana, CEO of Agrasar
Foundation, which operates three vocational training centres and
two bridge-schools for dropouts near Gurgaon, says his experience
with placing candidates in jobs mirrors the workers’ experience.
“Industry says that they will train the workers on the shop
floor,” said Rana. “They are not willing to pay even Rs 500 a
month more than the routine starting wage to a worker trained at
an ITI, or even a worker with National Skill Development
Corporation’s certification.” Agrasar Foundation has placed
2,000 trainees in jobs since 2011.
Modi’s skill cards may not be
enough to goad industry into paying a wage commensurate with
certification.
In its earlier avatar under the
Congress-led government, the National Skill Development
Corporation had offered soft loans of over Rs 200 crore to 100
private firms to run vocational training centres. None of the
firms that took loans have been able to break even because of
employers’ reluctance to pay premium for getting formally
certified workers, points out Rana.
Trainee workers
A few industries do provide workers
in-service training. As per a World Bank report, “India’s
Employment Challenge”, 17% of manufacturing establishments and
4% of small firms provided training in their plants in 2010. But
this number was very low by international standards, lower even
than Bangladesh’s 27% and Sri Lanka’s 38%.
Even today, most workers learn their
trade on the job and through informal apprenticeships. To promote
employment through on-the-job training, Modi had launched the
Apprentice Protsahan Yojana last October. Under this, the
government pledged to subsidise half the stipend paid to
apprentices, or on-the-job trainees, during the first two years of
training. Though there are 4.9 lakh seats in the programme,
currently 2.82 lakh apprentices are undergoing training under it.
The government aims to increase this figure to 24 lakh
apprentices.
Ministry data shows that from the
time of the scheme’s launch last year till February 2015, only
288 new apprentices were formally engaged in on-the-job training
by 121 employers, which is too low to even meet the government’s
first stage target to sponsor 1 lakh apprentices till March 2017.
Representatives of the Confederation
of India Industry (CII) say they will partner with the government
to conduct 40 workshops with employers around the country on the
fine print of this scheme. Sougata Roy Choudhury, director
(skills) at CII, said: “We have to demonstrate to industry that
they will have to pay a premium for skills and for skill certified
workers. But ultimately, not everyone will be able to get a job in
the organised sector. The government’s renewed focus on skill
may still help create talent for self-employment.”
In a recent paper of the
International Labour Organization, economists CP Chandrasekhar and
J Ghosh said that self-employment, most of it “highly fragile
and vulnerable”, already accounts for over half of India’s
workforce. Whether those trained under the Centre’s latest
skills mission are able to make the jump from self-employment as
daily wage workers to entrepreneurship will not only depend on
skills but also other factors such as access to credit and
marketing.
The latest 2015 policy is silent on
credit for skilled workers. It only states that the government
will explore the possibility of setting up a National Fund for the
Unorganised Sector.
Prerit Rana of Agrasar Foundation
says that mere focus on skilling, without adequate attention to
helping workers – many of whom are migrants – gain access to
bank loans and marketing services will not markedly change their
lives. “Ultimately, most of the workers making the shift from
rural to urban India lack good public education, which is an
investment in a person over 12 years,” he said. “Just by
giving quick fixes of giving vocational training over 3-6 months
will be acting like the doctors who offer a paracetamol for any
ailment.”
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