Prof. D. Mukherjee
For over more than two decades, the phrase ‘Demographic Dividend’ has been a significant topic in the Indian labour market. Researchers agree that India could benefit from a demographic dividend due to her growing working-age population until 2040 and it may continue to derive benefits till say 2060. However, to capitalize on this potential, the young workforce entering the labour market must be adequately trained and technologically proficient. This highlights the need for proper education and skill development to bridge the gap between academic qualifications and practical employer needs. In response, the government has launched various projects and established skill development institutions to enhance and update the workforce’s skills. These initiatives aim to position India as a competitive global player, producing goods and services that meet international standards. Despite abundant labour supply, questions remain about the effectiveness of these policies since their inception in 2007-2008. Concerns arise as companies like L&T resort to hiring skilled workers internationally due to local shortages, indicating that the desired demographic dividend may not be fully realized.
The 21st-century industrial landscape demands a skilled and tech-savvy workforce to support innovation-driven production processes over manual labour. This raises the question of how effectively India could harness her young demographic ratio over the past two decades to develop a skilled workforce aligned with industry needs. Employers argue that the skill level and quality of Indian blue-collar workers fall short of international standards. To address this, the Government of India launched various skilling programs, such as Pradhan Mantri Kaushal Vikas Yojana, National Skill Development Mission, National Policy for Skill Development and Entrepreneurship, and the Skill Loan scheme.
These initiatives aimed to provide skill-based training to the youth, supporting anti-poverty efforts and improving job opportunities. Despite these efforts, the results remain underwhelming. India’s demographic dividend initiative began around 2005 and is expected to last until the sixth decade of the present century marked by a significant rise in the working-age population, say 15-65 years, supporting both the elderly and the young. Historically, countries like Japan, Hong Kong, and Singapore leveraged their demographic dividends in the 1960s for rapid economic growth. Brazil experienced a growth spurt in the 1960s but failed to sustain it, resulting in a middle-income trap. Similarly, the Arab world’s demographic dividend in the 1990s did not translate into economic growth, leading to the Arab Spring due to widespread youth frustration. Again, China’s demographic dividend coincided with economic reforms in the 1980s, leading to prolonged growth. India, having utilized about a third of her demographic dividend period, saw explosive growth from 2003 to 2012 but has since struggled to sustain it. Growth has produced fewer employment opportunities since 2010, failing to significantly benefit the working-age population. Efficiently combining capital, labour, and land to generate income and employment is crucial for realizing a demographic dividend, with urbanization often leading to unplanned settlements and slums
Although ‘India Employment Report 2024: Youth Employment, Education and Skills’, a seminal research publication of Institute of Human Development, International Labour Organization (ILO) has exhibited improvements in the initiatives of the government in imparting education and skill development yet the said study observed that ‘educated youth have higher rates of unemployment, reflecting a mismatch with their aspirations and available jobs. Beyond a narrow view of the unemployed, there is a large proportion of youths, particularly young women, not in education, employment or training.
Technological change and digitalization are rapidly affecting the demand for skills, which would continue to impact young people in the Indian labour market’. Moreover, the said investigation also reflected that blue-collars workforce are continuously flocking to the avenues of white-collars workforce because of disparity and inconsistency in benefits in this employment avenues.
It is obvious that everyone is free to choose his or her profession and vocation in accordance with his or her skillsets and expertise and it is also acommon human urge to improving the standard of living by earning more income. But the blue-collars work force is sifting to other avenues because their job and benefits are not compatible each other and there is not tenure-based security of employment compared to what-collars employment profiles. Working conditions and environments are observed to be non-conducive and adversely odd. This kind of adverse phenomena are acting as the deterrent for entry of new generation blue-collar workforce. As a result, there is trend of setting growing vacuum in the flow of skilled and trained work force. Consequently, the existing and potential employers are having no options other than constantly switching over adopting the production and operations model eitherautomation or outsourcing widening and inflating the figure of artificial demand for labour. This ultimately causes loss to the economy and foments the trend of unemployment and underemployment of the available workforce. The proximate causes of non-availability of blue-collars workforce are not far to seek, as such, unfavourable terms and conditions of employment, disparity in wages or earning, non transparency in surety of continuity of employment, lack of proper skilling, absence of incentives including health and sanitary conditions for healthy living and dearth of opportunities for upgradation of the existing skills and training are some of the glaring reasons owing to which no new blue-collar generation workers is being attracted to this avenue unless situation is blatantly compulsive.
It is worth mentioning that workforce ready to enter job market with the low or not up to the mark skills andtraining, the problem of the supply-demand gap and the mismatches in training would obviously persist and this scenario is quite likely to grow in those sectors where there is an increased demand for skills due to technological disruption. Despite the plethora of recent changes, the present curricula and teaching-learning system of education, training and skills development is observed not adequate and sufficiently equipped to respond to the trend and pattern of demand for various kinds of skills needed in the process of globalization and technology driven model economic development and growth.This is worth observing that the supply-demand skills and trainings’ inconsistency is not just owing tothe gap between the skills and training imparted to the workforce and the requirements of hiring organizations but quality of education, training and skills of workforce is questionable as they bare far below the international standard. As mentioned elsewhere currently educated youth are facing severe unemployment problem, due to lack of skills and technical knowledge. The irony is that most of workforce and employment seekers are unaware about the developments taking place in the modern technology savvy world besides the training institutes are also subject to various shortcomings in terms of availability of competent resource persons, experienced trainers and state of art infrastructure.A skill development training program is normally said to be effective when training outcome matches with its objective that is enhancement of trainees or workforce’s productivity and performance outcomes.
Trainees and workforce’s productivity and performance directly depends upon the training attributes in terms of contemporariness, relevance, result orientation, competitiveness, and global comparability. Summarily, L & T like situation can be attributed to the factors such as poor education and learning, insignificant incentives to the trainers and experts who opt to train blue-collars workers, apprentices and trainees and the limited number of jobs that are made to have exposure of deep and meaningful training.
To make India’s blue-collar workers in particular and workforce in general productive and employable, several strategic measures are essential. First, enhancing vocational training programs tailored to industry needs is crucial. Collaborating with companies like TATA, L & T, Reliance, WIPRO, ONGC, NTPC, COAL India, GAIL, IOL, SAIL, G-MAR, National Highway Authority, BRO etc. can ensure these programs align with current job requirements. Introducing apprenticeships and on-the-job training would provide practical experience, bridging the gap between education and employment. Next, improving the quality of education, particularly in STEM fields, can create a technically skilled workforce. Upgrading infrastructure in technical institutes and fostering public-private partnerships can further enhance the learning environment.
Further, labour reforms to ensure flexibility, safety, and fair wages are necessary to attract and retain talent in the blue-collar sector and manual workforce. Creating a robust labour market information system can help match skills with job opportunities more effectively.Additionally, encouraging entrepreneurship and small business development can generate employment opportunities and reduce reliance on large corporations for job creation. Promoting digital literacy and technological adoption among the workforce can also increase productivity and efficiency.Finally, fostering an inclusive economic environment that supports continuous learning and skill upgrading will ensure that the blue-collar workforce remains adaptable and competitive. By implementing these measures, India can maximize her demographic dividend and reduce the need for companies like L&T to outsource labour internationally and demographic dividend may come into reality.
The author is a Bangalore based
Educationist and Management Scientist
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