Published On: Wed, Jan 4th, 2012
Articles | By Surekha Sridhar, Director - Academic Skill Builders

Vocational Education & the year passed by…

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National Council for Vocational Training

Surekha Sridhar

Surekha Sridhar is Director – India Operations at Academic Skill Builders and an analyst on Vocational Education in India.

She holds fifteen years of experience in the fields of education, training, content development, animation and eLearning. Prior to Academic Skill Builders, she headed eLearning business for a media company. She carries entrepreneurship experience of starting an animation company focused on education sector.

She believes, she got an opportunity to be associated with better people with the passing of every year and experience adding on. She expresses her view on vocational education in her blog.

Indians spend $600 billion, yearly on education. With $600 billion yearly overall education spend at comparable prices; India’s education sector is bigger than that of the US. India is the 9th highest in the world. India’s yearly growth in overall education spend, at 15%, is also one of the fastest in the world.

The estimated CAGR of private revenue in Indian education, at 19% during ’11-’15, is also one of the fastest in the world. Skill and vocational training are emerging as big opportunities for private players. High growth, scarcity of investable opportunities and the recession-proof nature of the sector are likely to keep valuations high.

From $30 billion in 2012, private education revenue is set to reach $45 billion by 2015.  K-12 ($20 billion), technical education ($12billion), coaching ($8 billion) and pre-school ($3 billion)

Urban affluent spend 10.4% of the total consumer spend towards private education. The rural poorest spends just 1.4% of wallet on education. With the median income elasticity of demand for education at near 2, a 1% rise in per capita income leads to a 2% jump in education spend, mostly on private education. This is the key driver of the sector.

“India will account for 20 per cent of the world’s global workforce in 2020s. The average age of Indian workforce will be 29 years as compared to 37 for the US and China and 45 years for Europe”, Kapil Sibal, minister for human resource development, communications and IT said at the India Economic Summit 2011 in Mumbai.

Never before in the history of any country has human capital development been such a key focus area as 2011 was for India, marking the beginning of better times.

The huge demographic dividend India can for sure reap from its large young population, with 250 mn to 400mn people joining the employment market between now and 2025 to fuel its growth. This is a staggering number by any standards.  However, to become productive these huge numbers have to be suitably trained to avoid large scale unemployment, which needs greater emphasis than rejoicing the fact that we have the largest youngest population in comparison to other countries.

To be more specific, 109 million persons will attain working age during the period of 2007-2012. The net addition to workforce is, therefore, expected to grow to 89 million of which around 13 million are likely to be graduates/post graduates and about 57 million are likely to be school drop outs or illiterates. A significant share of incremental demand is likely to be for skilled labour – graduates and vocationally trained people are expected to account for 23% of incremental demand by 2012. The study further estimates that India is likely to increase deficit of 5.25 million employable graduates and vocationally trained workforce by 2012.

Vocational education could be a great way to counter this challenge guised opportunity. India’s current capacity for vocational training is just about 4 to 5 mn per anum against a requirement of 10 times that. Hence focusing on vocational education is of primary importance.

The National Mission on Skill Development, under the Chairmanship of Prime Minister of India, had set a target of preparing 500 million skilled persons by 2022. On the other hand, it is expected out of approximately 75 to 80 million jobs created in India over the next 5 years, 75 per cent will require vocational training to enhance the employability prospects.

But, there is a huge ‘skill gap’ both in terms of quality and quantity – At present, only 2 per cent of the work force in the age group 15-29 has undergone formal vocational training and eight per cent have had non-formal vocational training.

In 2006, a World Bank report on skill development and vocational training in India spelt it out for all – “The relative supply of workers with technical/vocational skills has declined. This may be due to the fact that workers with technical/vocational qualifications do not have the skills that meet the labour market needs – often because of the poor quality of training provided.”

Why is it so? How can we change this scenario?

Vocational education is still considered as the poor cousin of university education, by the urban middle class in this country. This is largely because it is directly linked to the perceived low-status manual work. As it exists today…