There is a celebrative mood around India's economic growth figures. But what the trumpets may be missing is the awareness of the lack of inclusiveness in India's economic growth. The country's ever-growing informal economy contrasts with the industry's constant desperation for a skilled workforce, indicating the 'jobless' nature of much of the growth and the widening gap in skills for workers.

It is in this context that a National Conference on 'Approaching Inclusive Growth through Skills Development' was held in New Delhi on 12-13 February 2007. The conference was jointly organised by UNESCO (United Nations Education, Scientific and Cultural Organisation) and German Technical Cooperation (GTZ). India has been a priority partner country of Germany's Development Cooperation programme for more than 40 years. GTZ has been active in India on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) for almost all of this period.

Talking Informal Sector at conference. Seen here (from left): Kenneth King, University of Hong Kong and Manfred Haebig, GTZ. Pic: GTZ/UNESCO

Policy makers from New Delhi as well as a few state governments, representatives of industry, researchers, educators, service providers, international development cooperation agencies and civil society organisations came together to deliberate on issues surrounding the informal sector. They gathered together particularly on strengthening and activating the informal sector, to exchange and share information and experiences, and to discuss strategies for coping with the present and future demands of educational, technical and life skills for employment and income generation. Representatives of the State Directorates (for Technical Training/ Employment and Training) of West Bengal, Punjab, Kerala, Maharashtra and Madhya Pradesh were also present.

Context of the discussions

Manfred Haebig (Senior Manager, Sustainable Development, GTZ Germany) considered the contrast of the tremendous growth in the economy on the one hand, and the less than satisfying growth in employment on the other. According to Skill development in India - The Vocational Education and Training System, a 2006 draft report from the World Bank, employment in the formal sector grew by only 0.6 per cent annually from 1994-2000 while in the informal sector it grew by 1.1 per cent annually. The crucial fact here is that 93 per cent of India's workforce is engaged in the informal sector. Haebig stressed the need to deal with the informal economy seriously and systematically and to unlock its potential through skills development.

Leyla Tegmo-Reddy (Director, ILO India) added that public sector training institutions in India tended to cater to the formal sector, though a number of initiatives had been started in recent times, including some in collaboration with the ILO. She stated that last year, the tripartite constituents (Government, employers, workers) and the ILO agreed on key issues for collaboration, with skill development as a major common thread. Concurring with her, Dietmar Hahn (Programme Director, GTZ India) maintained that the initiatives already launched were at a small scale and and to create a wider impact it was crucial that these initiatives contribute to the generation of gainful (self-)employment and improve the competitiveness of the informal sector.

Amit Mitra, an independent researcher, cited figures pertinent to vocational training and informal sector. India has only 5,100 ITIs (Industrial Training Institutes) and 1,745 polytechnics compared to China's 5,00,000 VET (Vocational Education & Training) institutes. While the USA boasts of 1500 VET programmes imparting specific skills, India's programmes covered only 171 trades, imparting low-quality skills. Mitra emphasised that VET institutes in India are characterised by outdated, structurally rigid, centralised syllabi and bored teachers without much sense of market conditions or of imparting multi-skills relevant for life long learning processes. A good part of this was due to the fact that regular (academic) education and vocational training are perceived as separate and alternate categories, not as options of an integrated life skills education.

The audience actively reflected on this (social) divide between formal education and vocational training, and also the fact that the present approach to vocational training was handled by 17 different Ministries without much coordination. They expressed a need for an overall certification system to streamline affiliation and for creation of an umbrella body to coordinate the work of the Ministries involved.

Knowledge, skill and competence required in the informal economy

Globalisation has created a great demand for a skilled workforce that is responsive to emerging market needs and is equipped with knowledge. For people, especially those in the informal sector to get productive employment, it is crucial to acquire skill sets with strong labour market linkages. For instance, if plumbers were trained 10 years ago in working with a particular set of water supply fixtures, they may not be able to repair or replace an advanced flush or faucet system which appeared on the market very recently - unless of course they upgrade their skills. Institutional linkages and the value addition through technical change, skills upgradation and organisational and entrepreneurial abilities will increasingly determine the sustainability of livelihoods and businesses in the informal economy.

It is in the above context that Professor Amitabh Kundu of the Jawaharlal Nehru University, Delhi, began by saying that the manifestation of the informal sector was so diverse that it was not possible to make general statements about it. Data drawn from the 61st National Sample Survey highlights the growth in the informal sector in India, with a clear rise in the employment rate in recent years. This had been interpreted as a happy symptom and it was believed that the informal sector would be able to absorb a large proportion of the growing labour force.

However, paradoxically, the unemployment rate also showed signs of going up during the same period, especially if one looked at the daily unemployment status. With liberalisation and globalisation, a trend had been noticed for 'casualisation' of labour, where the workforce was being nudged out of the formal sector into the informal sector. For instance, if the present construction trends render the skills of a construction worker redundant and inadequate for formal sector employment, this worker could be forced to take up unskilled jobs as a daily wage informal sector worker in the same or other sectors. Factors such as changing skills sets and the presence of a restrictive labour legislation are contributing to this phenomenon. The effect was even more for urban women among the poorer section of people, where even casual employment was becoming scarcer, making them more vulnerable.

However, the fresh challenges posed by globalisation cannot be met without a conducive policy environment. It is on this thematic area that exchanges focused next.

Favourable policies to promote decent work and training

What policy measures need to be implemented to overcome literacy, knowledge and skills gaps in the informal economy? How can existing skills development practices in micro- and small enterprises and other out-of-school settings be utilised in transforming existing systems of education and training? How can a coherent system of recognition and certification of skills and competencies for the informal sector be developed?

At the conference, representatives from the Ministries attempted to provide a few answers. Ashok Kumar (Deputy Director General, DGET, Ministry of Labour and Employment, New Delhi) introduced the proposed Modular Employable Skills (MES) Programme, planned to be implemented in the immediate future. The Directorate General for Employment and Training (DGET) in the Ministry of Labour and Employment, Government of India, is the nodal organisation for vocational education in India, with a massive target of training 20 million people by 2020.

The MES programme plans to provide the minimum level of skills that could lead to gainful employment. MES proposes to provide a step by step opportunity for skill development, with the possibility of entry at various levels and help in getting appropriate certification. The overall process of developing MES would include identifying employable areas, preparing course curricula in consultation with relevant employers, organising training, testing by professional bodies, certification by NCVT, and post training support where needed.

MES would also provide for a monitoring system to track the trainees after training, including state/district/taluk-wise listing of candidates, job opportunities and matching the two. Initially, the focus would be on traditional sectors like khadi-spinning and weaving, carpet making, construction, brassware and glassware, fragrance and flavour etc. Course curricula for 156 courses have been developed until now. But the funds being provisioned for MES appear to be too low. For 2007-08, a provisional budget of Rs.5 million (or Rs.50 lakhs) has been reserved. This is pending the formal budget position being conveyed by the Planning Commission for this year and also for the 11th Five Year Plan.

The Ministry of Human Resource Development also runs a parallel programme for vocational education – Jan Shiksha Sansthan (JSS). The JSS is not just about imparting literacy but also about developing awareness on vocational opportunities, later translated into skills development, said V Mohankumar, Director, Directorate of Adult Education, Ministry of HRD, New Delhi. The programme was initiated to meet the vocational needs of people migrating to urban areas, and catered mainly to neo-literates, but included illiterates as well.

Tracing the history of JSS, Mohankumar said that starting from one institute in 1967, JSS had reached 194 locations at present. A large number of courses (351 at present) were offered, based on curricula developed by the Directorate and standardised with the aim of self-employment rather than employment. In first four years of the Tenth Five Year Plan, 62.07 lakh people (6.2 million) benefited from JSS, out of which 13.94 lakh were in vocational courses alone, according to government figures.

A few instances – among many – of training initiatives being spearheaded by the government, are not an indication that everything is all right on the front of skills development. It is because much needs to be done that a national conference was even held. With equal certainty one could say that no single stakeholder can bear the responsibility exclusively – neither the government, nor the private sector and the training providers, nor the trainees themselves.

Is there a panacea? Perhaps only a better, complementary integration of all involved with a greater focus on their respective roles in the demand, supply and management of vocational training delivery can work. The conference ended with a number of conclusions and recommendations denoting key areas in need of efforts.

Vocational education and training systems

 •  Participants strongly emphasised the need for a thorough revamp of the vocational education and training system, integrating the two streams of general education and vocational training and offering easy vertical and horizontal mobility. It is important to increase the opportunities for skills training and improve the awareness and acceptability of vocational training as an option for employability.

 •  With a number of Central and State Ministries as well as numerous other stakeholders (NGOs, chambers and associations, and industry) involved in skills development, it was strongly suggested to establish an umbrella organisation at national level, which can look into better coordination to complement efforts from all the sectors and create synergies.

 •  Strong recommendation came in for decentralisation of the government skills training institutions. The current system, especially Industrial Training Institutes (ITIs), was described as highly centralised with no place for operative autonomy and flexibility to respond quickly to local skills training needs. Greater autonomy of the training institutes would reduce the skills gap and make training more market oriented.

 •  A strong need has been felt for a common platform for providing a uniform certification and accreditation system for informal workers, which could also serve as a quality assurance mechanism. Such a system should ensure greater focus on 'performance' based accreditation, i.e. based on actual skills or competencies performable by the person. In addition, this system would also contribute in recognising prior learning and skills training through informal means; and can provide motivation for employability and skill upgradation.

Joining forces for a large-scale implementation

 •  It was suggested that government, NGOs and private organisations shall join forces in order to enable large-scale replication of successful skills development programmes.

 •  It was agreed that there are numerous good practices among many NGO and private training providers - many of them have been presented during the conference - but that the outreach is small. It was recommended that the government should support the large-scale replications of successful programmes, e.g. :

  1. Opening ITIs for non-formal training. It is already happening, but only in a few places.
  2. Partnering with selected NGOs having large scale-operations or which can be upscaled (for e.g., Don Bosco Tech India)
  3. Partnerships with the private sector – Public-Private Partnerships.

Skills development strategies

 • Training on life skills, meta skills and business skills should become an essential part of all training programmes in the informal sector, and the integration of life coping skills should preferably start in elementary school.

 •  A suggestion was to develop trainers from within the informal sector by training the master-craftsmen in training delivery and job role. This would need systems for skills validation and certification of trainers who themselves are not formally trained, but have requisite sets of skills in specific vocational areas.

 •  It is important to look at needs of collective enterprises for training – either a cluster approach or training of members of collectives – e.g. Self Help Groups (SHGs), product-based clusters (cane and bamboo, various artisan clusters etc.) so that interventions can be focussed.

 •  Specific groups (adivasis, dalits or the disabled) often face special difficulties. Programmes need additional flexibility to ensure meeting the special needs of such groups. A major issue is to tailor programmes to overcome the difficulties faced by people with little or no literacy.

 •  It is equally important to look at women participation in technical and vocational training. Special gender strategies are essential, and might also need extended linkages to ensure effective placements of these women in the industries.

The Finance Minister declared Budget 2007-08 to be based on principles of inclusive growth, equity and social justice. For that to mean more than words, the time is perhaps most crucial to perceive the issue of skills development in the informal sector for what it is – the single most important instrument to strike the balance between growth figures and their uneven distribution, between high unemployment rates and the industry's call for a skilled workforce.