Introduction: The Premise of a New Political Narrative
India is at a critical juncture, navigating the
paradox of being the world's fastest-growing major economy while facing
persistent pressures on employment, wage growth, and, consequently, domestic
savings. The political narrative of the past decade, focused on "Digital
India" and "Make in India," is evolving into a more profound,
outcome-oriented strategy: "Skill India 2.0 - A Catalyst for Real Economic
Empowerment."
This narrative argues that India’s vast demographic
dividend—with 65% of its population under 35—is not just a statistic, but a
potential economic miracle that can only be unlocked by converting
employability into high-quality, high-wage jobs. The pressure to build real
wages (wages adjusted for inflation) and increase household savings is now the
focal point of India's political economy, shifting from mere job creation to
the creation of productive, sustainable livelihoods.
This political shift highlights that true economic
growth is driven by a virtuous cycle: skill development leads to higher
productivity, which in turn leads to higher wages and increased savings,
ultimately driving investment and long-term GDP growth.
I. The Core Challenge: Bridging the Employability Gap
The central challenge in India’s labor market is not
merely a lack of jobs, but a significant mismatch between the skills demanded
by modern industries and the skills possessed by the workforce.
The Skill Mismatch: Despite substantial investments in
education, only 50–55% of Indian graduates are considered employable. The
remaining workforce, particularly youth, faces a "hidden
unemployment" crisis, working in low-paying or temporary jobs far below
their qualifications.
The Productivity Link: The low productivity of the
informal sector, where over 90% of the workforce resides, is a key driver of
stagnant real wages. The political narrative is now firmly focused on
"formalization"—moving workers from low-productivity, informal roles
into high-productivity, formal jobs, supported by technology.
The Role of Education: The New Education Policy (NEP)
2020 and the Skill India Digital Hub (SIDH) are being positioned as the
foundational tools to bridge this gap, integrating vocational training with
academic learning at a young age.
II. Skill Development as a Strategy for Real Wages
A crucial aspect of this narrative is that "skill
development" is not just about certification; it is about enhancing
earning potential. The government is focusing on:
Industry-Aligned Skilling (The Flexi-MoU Model): Moving
away from generic training, the government is partnering with industries to
co-create curricula, ensuring that trainees are immediately employable upon
completion. This, for instance, includes training for Industry 4.0—AI,
robotics, IoT, and drones.
Revisiting "Make in India": The success of
manufacturing initiatives is now directly tied to the success of "Skill
India." The narrative emphasizes that for India to become a global
manufacturing hub, it needs to train a workforce capable of advanced manufacturing,
which commands higher wages.
Women-Led Development: A key, untapped potential in
the labor force is women's participation. The narrative promotes women's
empowerment through targeted skills training (e.g., the Swavalambini program)
and encourages female participation in high-skill sectors, recognizing that
increased female workforce participation significantly boosts household income
and savings.
III. The Architecture of Savings and Investment
The political goal is not just a higher GDP figure but
a higher quality of economic growth, one that increases household savings (the
backbone of domestic investment) and creates a robust middle class.
The "Earn While You Learn" Model: The
National Apprenticeship Promotion Scheme (NAPS) has been strengthened to provide
hands-on experience, allowing learners to earn a stipend while acquiring
skills, thus providing immediate income and encouraging early financial
independence.
Empowering the Informal Sector (PM Vishwakarma): The
PM Vishwakarma Scheme is a cornerstone of this initiative, designed to provide
traditional artisans and craftsmen with modern skills, financial assistance,
and, crucially, access to modern credit, allowing them to scale their
businesses and improve their income.
Financial Literacy and Savings: The narrative includes
mandatory financial literacy programs for first-time employees in new
employment schemes, encouraging them to invest their savings in financial
instruments, which in turn provides capital for long-term investment.
IV. The Political Economy of "Viksit Bharat"
The ultimate aim of this strategy is Viksit
Bharat@2047 (Developed India). The political discourse framing this is
"Growth, Stability, Confidence".
Regional Focus: The narrative decentralizes growth by
focusing on Tier-II and Tier-III cities, which are becoming new engines of
growth by attracting Global Capability Centers (GCCs) and manufacturing
clusters.
Digital Public Infrastructure (DPI): The Skill India
Digital Hub (SIDH) is being promoted as a "digital public good" that
provides easy, equitable access to training, certification, and, crucial to the
narrative, direct matching with job opportunities, reducing the cost of job
seeking.
Global Mobility: Recognizing the international demand
for skilled workers, the "Skill India International" initiative is
training workers for jobs in countries like Japan, UAE, and Australia, allowing
them to earn higher incomes, which often results in remittances that increase
national foreign exchange reserves.
V. The Shift from Welfare to Empowerment
The political narrative is moving away from purely
entitlement-based welfare to an "empowerment-based" approach. This is
characterized by:
Outcome-Based Training: The government is changing the
funding model for training providers to focus on placement rates, ensuring that
the training actually results in employment.
Decriminalization and Compliance: The new labor codes
and the "Jan Vishwas 2.0" initiative aim to reduce the compliance
burden on companies, encouraging them to hire more, thus reducing unemployment.
The 2025 "Rozgar" (Job) Focus: The 2025
Budget and subsequent policy initiatives are heavily focused on
"Employment Linked Incentives" (ELI), which incentivize companies for
hiring, particularly for first-time employees.
Conclusion: A Sustainable Growth Story
The political narrative around skills and development
in India is no longer just about filling classrooms; it is a calculated, strategic,
and proactive approach to economic, social, and technological transformation.
By addressing the skill gap, India is creating a more resilient and productive
workforce, which is the most effective way to address the pressures of
unemployment, raise real wages, and increase savings and investment.
This narrative of "Skill India 2.0" offers a
promising path toward a Viksit Bharat, where every citizen is a stakeholder in
the country’s growth, and the demographic dividend is finally transformed into
a permanent, sustainable competitive advantage. The success of this vision
depends on a cohesive, collaborative effort from the government, the private
sector, and the youth of India, aligning their skills with the future-ready
demands of a rapidly changing global economy.
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