India is home to approximately 67 per cent of the population living under $ 2 a day. Poverty is widespread in India and is a predominantly a rural phenomena. However, people migrate from the rural areas to the urban in search of livelihood opportunities and it becomes important to provide them skill development trainings to uplift them out of poverty.
Innovative Financial Advisors Pvt. Ltd. understands for a developing country, skill and knowledge are drivers of economic and social growth. India is expected to be home of 500 million skill workers by 2022 which seems to be a difficult task. In order to achieve both the targets of economic growth and inclusive development, India needs to grow at more than 8 per cent. This means the secondary and tertiary sectors grows at 10 to 11 per cent, assuming agriculture grows at 4 per cent. Therefore, the demand for skilled workers in the secondary and tertiary sector will continue to rise in the coming years. This is good sign when every year 12 million people is expected to join the existing workforce.
Considering the fact that 12 million people are expected to join makes skill development in India an uphill task. This large workforce needs to be adequately skilled. This also means people migrating from primary to secondary or tertiary sector when the required set of skills is different from that of agriculture. This leaves a skill gap. Despite the ITIs and other govt. institutions, there is lack of infrastructure to formally train the workforce. Out of the present workforce of more than 450 million only 8 to 9 per cent are engaged in organized sector. In India, only about 5 per cent of the workforce has marketable skills, as compared to 50 per cent to 60 per cent in other countries.
India needs to take advantage of its demographic dividend and that can only happen when we achieve the target of 25 per cent of the work force with formal skills by the end of 2017. It is estimated that 50 -70 million jobs will be created in India over the next five years and about 75 per cent – 90 per cent of these additional employment avenues will require some vocational training. Looking at the demand of skilled man power there is a need to facilitate skill development trainings to the marginalized people in urban clusters. Innovative Financial Advisors Pvt. Ltd. suggests this will reduce the skill gap and match the demand of workforce with adequate skills for employment in SMEs. Enhancement in skill development will ensure more income flows to the local economy which will in return ensure increase in consumption levels and boost the growth rate of secondary and tertiary sectors.