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Future of India Could Hinge on Skills Training for Youth

According to Intellecap, in the next 20 years, India will add "250 million people to its working age population, compared to 18 million in Brazil and 10 million in China" (in the same time period).

India has the "highest number of young people in the world at 84.5 million (44% of the global youth population)who live in 'extreme poverty.' Further, 44 million (23% of world youth population)... are under-nourished."

Both the private and public sector, and sometimes the two in collaboration with one another, see opportunity to give these youth skills.

"Bhubaneswar Municipal Corporation announced... an initiative to train underprivileged urban youth... in a host of areas, including industrial sewing, electrical maintenance and welding and plumbing. Once the training is finished the youth will get a minimum monthly salary of INT 5,000... compared to INR 1,200 the average... for unskilled workers... Institutes will ensure 70% of trainees find employment."

Finance Minister of India announced in 08-09 budget speech that youth training was a priority, since then, the Ministry launched "the National Skill Development Corporation (NDSC), an innovative public-private partnership program... private sector has a 51% stake and the Government of India has 49%. [The Corporation states a goal of] 'foster private sector and industry participatoin in skill training and development.' It's approved 29 projects that, collectively, propose to train, or upgrade the skills of, 500 million... by 2022."

According to the Economic Times, skills training has become a major business trend, drawing "corporate hotshots" who compete for share in the "skills training market."

"Empower, a porfolio company of the NDSC... promises to 'provide enduring opportunities' in the private sector for 200,000 disadvantage youth by 2011. It will focus on classroom and on-the-job training for IT/BPO, tourism, hospitality and travel and organized retail segments, and plans to reach scale through a franchise model that will open nearly 600 centers around the country... The NDSC will extend a loan of INR 18.91 crore and, in return, has the right to a 10% equity stake in Empower with an additional 16% later."

"TalentSpirit [also NDSC-funded]... provides a 90-­‐day module to train and place graduates in banks and IT companies. Last year, the company\ trained\ 1,500 students and took in INR 6.5 crore (~US$4.21m) in revenues. While trainees pay INR\ 40,000 (~US$890) and increase access for poor youth, banks have agreed to provide loans of up to 90% to students... The government fell short of its target numbers last year, and hopes loan programs such as these, as well
as new marketing campaigns, will boost interest and participation among the emerging workforce.

Implications from Intellecap:

Intellecap asserts that the "training centers are operating with viable financial models and developing infrastructure to meet large scale objectives."

"Increasing access to jobs will improve their prospects for financial security. The positive economic and social value of this will have ripple effects throughout society. Financial security will increase, children will remain in school longer, families will improve nutrition and overall health, and future generations will continue\ to build on employment empowerment and choice."

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Sources:

Intellecap May 2011 page 4, 5, 6:
http://newsletters.clearsignals.org/Intellecap_May2011.pdf#page=4