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Data: How Does Employment From Skill Development Schemes Compare With EPFO Payroll Data?

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Government implements multiple skill development schemes through MSDE and other ministries. Some of these schemes mandate employment as an outcome. Data indicates that about 20.75 lakh persons gained employment through PMKVY & DDU-GKY between 2018-19 & 2021-22. This is about 4.7% of the new EPFO subscribers during this period.

Our lives are undeniably intertwined with the way we are paid. In a society that is marked by rapid advancements in technology, skill development remains the most appropriate way to remain relevant in the labour market. Hence, being in harmony with the market requirements becomes of utmost importance. “Skills don’t die, only people do,’ said Anas Hamshari, establishing the importance of skilling in life.

Skill development perpetuates a virtuous cycle, wherein highly skilled labour enables a boost in productivity thereby enhancing economic growth. Countries are beginning to realize the potential of a highly skilled workforce in achieving social, economic, and developmental goals. With a greater proportion of the population in the younger age bracket, India needs to have a workforce that is ‘employable’ and industry ready. That emphasis is clearly reflected in the steps taken by successive governments towards bridging the gap between the required and acquired skills. 

In today’s story, we look into various skill development initiatives, and the outcomes achieved, and how these skill development programs add up to the overall formal employment figures in India.

The story so far

The National Policy for Skill Development & Entrepreneurship (NPSDE) was introduced in July 2015 with the goal of building an ecosystem of empowerment through large-scale rapid, and high-quality skilling. A new ministry, the Ministry of Skill Development and Entrepreneurship, was established and is responsible for coordinating all skill development initiatives across the nation, bridging the gap between demand and supply of skilled labour, and developing a framework for vocational and technical training.

The Ministry of Skill Development and Entrepreneurship (MSDE) provides skill training to youth across the country through a comprehensive network of skill development centres under various schemes such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Jan Shikshan Sansthan (JSS), National Apprenticeship Promotion Scheme (NAPS), and Craftsman Training Scheme (CTS) through Industrial Training Institutes (ITIs) under the Skill India Mission. 

Apart from these, the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) under the Ministry of Rural Development, is a flagship scheme aimed at transforming rural youth into a globally relevant and economically independent workforce. It came into being in September 2014.

Progress made under these schemes.

Pradhan Mantri Kaushal Vikas Yojana: Pradhan Mantri Kaushal Vikas Yojana (PMKVY) provides youth throughout the nation with skill development training through Short-Term Training (STT) and Recognition of Prior Learning (RPL). Launched in 2015 as a pilot, PMKVY had been extended thrice. PMKVY 1.0 was launched in 2015, while PMKVY 2.0 was launched on 02 October 2016, with an aim to impart skilling to 1 crore youth by 2020. PMKVY 3.0 was launched in January 2021. Since its inception in 2015, a total of 137.17 Lakh people have imparted training under all three phases of PMKVY till September 2022. The details of phase-wise training, certification, and placement is as below.

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Jan Shikshan Sansthan: The Jan Shikshan Sansthan (JSS) Program intends to provide vocational training to nonliterates, neo-literates, and people with minimal education up to the eighth grade as well as school dropouts up to the 12th grade who are between the ages of 15 and 45. 

286 JSSs are currently operational in 26 States and 7 Union Territories as of September 2022. Around 4 lakh people are covered annually, and 85% of them are women. A total of 14.65 lakh candidates are trained under JSS from 2018-19 till September 2022. 

National Apprenticeship Promotion Scheme: The National Apprenticeship Promotion Scheme (NAPS) offers financial assistance to industrial establishments that are implementing apprenticeship programs in accordance with the Apprentices Act of 1961, to promote apprenticeship training and increase the engagement of apprentices. The total number of candidates trained under NAPS from 2018-19 till September 2022 stands at 16.73 lakh

Craftsmen Training Scheme: The Craftsmen Training Scheme (CTS) uses Industrial Training Institutes (ITIs) all throughout the nation to deliver long-term training. With a goal of providing trained workers to the industry as well as young self-employment, the ITIs offers a variety of vocational/skill training courses across a wide range of economic sectors. 

A total of 3841 ITIs have been established in India since 2016 under the CTS scheme. Including the private ITIs, the total number of ITIs in India stands at 14,953. A total of 54.12 lakh candidates have been trained under CTS scheme from 2018 till September 2022, and if data from 2015 is added, the trained candidates add up to 88.41 lakh (2015 to 2021). 

Under this Scheme, placement details are not tracked. However, according to the Tracer Study of ITI Graduates report (released in January 2018 by the Ministry of Skill Development & Entrepreneurship, GoI), 63.5% of all ITI pass-outs were employed.

Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY): Launched as a part of the National Rural Livelihoods Mission (NRLM), the DDU-GKY aims to skill the rural youth and provide them with jobs that give regular monthly wages. The scheme is also socially inclusive, with mandatory coverage of socially disadvantaged groups. 50% of the funds would be earmarked for SCs and STs, 15% for minorities and 3% for persons with disabilities. One-third of the persons covered should be women.

From the inception of this scheme till 10 October 2022, around 12.69 lakh candidates have been trained, out of which 7.60 lakh candidates have been placed. If the latest figures are to be added, the trained candidates stand at 14.67 lakhs, while those placed stand at 7.85 lahks.

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Placements under Skill Development Schemes as a % of total employment

The Ministry of Statistics & Programme Implementation (MoSPI) releases Payroll Reporting in India every month. This gives us employment-related statistics in the formal sector, using information from subscribers under three major schemes, namely the Employees’ Provident Fund (EPF), the Employees’ State Insurance (ESI) and the National Pension Scheme (NPS). 

Of the four major schemes under the Ministry of Skill Development and Entrepreneurship, only PMKVY has the mandate to ensure placements. Rest three schemes do not have any such mandate. As a result, data on the candidates receiving placements under such schemes is not available. For DDU-GKY, the placement data is available. Accordingly, the mapping of placement figures from these schemes is done with the numbers from EPFO payroll data. Since the EPFO started publishing payroll data from September 2017 onwards, analysis takes into consideration numbers from 2018-19. 

One assumption here is that most of the job placements through these schemes are entry-level and fall under the threshold of the EPFO scheme. One must exercise caution in analysing these figures as this is just an estimation and is not foolproof. This is not an exercise to estimate job creation, but to get an idea of the share of employment through skill development programs.

The number of candidates trained under PMKVY and DDU-GKY from 2018-19 to 2021-22 stood at 98,06,541 out of which 20,75,513 received job placements as per the government’s data. The number of new EPFO subscribers during the same corresponding period is 4,43,98,993. In effect, the placements from PMKVY and DDU-GKY account for 4.67% of the total new EPFO additions during this period, assuming each new employee is enrolled under EPFO. 

Even for those who received training under these schemes, the conversion percentage towards successful job placement is only 23%. This rather low percentage raises serious concerns about the effectiveness of the skilling programs in providing gainful employment. It is well established that there is a mismatch between the demand and supply of skilled labour in India. Yet, such low conversions point out gaps in the entire process flow from education to employment. 

Need for a unified, real-time integrated data portal

In a bid to capitalize on the demographic dividend, governments across the states as well as the Central Government have been introducing a plethora of skill-development schemes targeting different sections of the population. As a result, there is a proliferation of skilling schemes with multiple agencies overseeing them, leading to a lack of synergy between them.

It is highly recommended that a new, unified, and real-time data portal be developed to seamlessly navigate through the web of skill development programs and employment generation. Such a system would also be useful in avoiding duplication of candidate data when analysing the performance of skilling programs.

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